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More Chinese e-commerce startups attract capital

February 16, 2016 03:55 PM
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The 2015 slowdown in the Chinese economy didn’t stop investors from putting money into e-commerce startups in China.

The number of such deals increased 78% to 627 in 2015 from 353 a year earlier, according to a report by IT Orange, a Chinese market research firm. The report did not disclose the value of the deals.

Entrepreneurs and investors have strong faith in the fast-growing e-commerce section. Cross-border e-commerce and mobile-commerce also act as a strong drivers to this sector, according to the report. 

Among the segments that drew the biggest investments were fresh food sales via the web, logistics and cross-border e-commerce.

High-value deals include Beibei.com, a flash-sale retail site of children’s products based in Hangzhou, which raised $100 million in a series C financing round led by China-based venture capital firms Capital Today and New Horizon Capital. Two previous investors, China-based Banyan Capital and U.S.-based IDG Capital Partners, also participated.

Venture capitalists concluded more deals involving fresh food e-retailers and shipping companies in 2015 than a year earlier, while the share of deals in e-commerce companies selling general merchandise and apparel remain unchanged, the report says.

The fresh food category attracted 133 investments in 2015, a 217% increase from 2014. The report says it shows this market has entered a period of rapid growth and that investors recognize its potential for big growth.   

There were 83 deals involving e-commerce logistics and shipping in 2015, nearly double the number from a year earlier. This sector has grown explosively over the past several years and will keep growing steadily, the report says.

The report says there were 34 deals involving cross-border e-commerce startups, 36% more than a year earlier. Cross-border online retailing is a hot business sector in China, however, the dominant players are large companies and investors seem leery of investing in startups in this segment, according to the report. 

For a fuller report on the openings for foreign companies to sell online in China, see  “Open Door Policy” in the November 2015 issue of Internet Retailer magazine.

For more Chinese e-commerce data, please click here for Internet Retailer 2015 China 500.

 

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