The Wisdom Store Said To Raise 15.5 Million USD In A-Round Financing
摘要： On March, 24th, some media revealed that the latest financing of The Wisdon Store was led by Amoeba Capital, and followed by SinoWisdom Capital, QF Capital, CITIC Capital, FZ Capital, Mr. Wang Yawei and Yan Qi(former COO of Alibaba).
The Wisdom Store, the leading e-commerce platform in rural China, demonstrated its potential by raising 300 million RMB in A-round financing.
On March, 24th, some media revealed that the latest financing of The Wisdon Store was led by Amoeba Capital, and followed by SinoWisdom Capital, QF Capital, CITIC Capital, FZ Capital, Mr. Wang Yawei and Yan Qi(former COO of Alibaba).
Rural China has become a rising e-commerce market. Statistics from E-Commerce suggest that the acceptance rate of e-commerce in rural China has reached 84.41% in 2015, and the average consumption volume ranges from 500 RMB to 2,000 RMB. It is expected that the transaction volume of the e-commerce market in rural China will hit 460 billion RMB in 2016.
Obviously, there is huge potential in this market. Internet giants such as Alibaba, Suning and JD have all entered this burgeoning market. But how did The Wisdom Store manage to stand out and receive so large sum of investment? Previously, Business Value and TMTpost have already issued a report on the operation model of TWS, titled “An E-Commerce Revolution in Rural China”. On March, 18th, we got in touch with Chen Wei, founder of TWS, again and conducted this interview.
The rapid development of TWS
Throughout 2015, Chen Wei and Sun Wei, founder and CEO of TWS respectively, travelled back and forth between urban and rural China. Up till now, they have already set up over 10,000 outlets in 185 counties across China. This wouldn’t have been possible without the endeavor of them.
Mr. Chen did go to Beijing for several times, but he only chose to stay in chain hotels such as Home Inn. Born in 1977, Mr. Chen was recognized by angel capital investors with his business negotiation ability.
At the same time, TWS’s CEO Mr. Sun had a decade experience in the traditional chain store retailing industry. For him, TWS was more a like a traditional company that’s integrating to the Internet. Huang Yang, another co-founder of TWS, was also a veteran in the e-commerce business. As the former general manager of Huaqiang E-Commerce, he had rich experience in e-commerce platform operation and supply chain management. On March, 1st, Gong Tao, former vice president of SF Express’s Storage Division, joined TWS, so that five of the core members of TWS are from Alibaba.
It is reported that Amoeba Capital and QF Capital are two of the major angel investors of TWS at first. Amoeba Capital’s partner Zhao Hong, former vice president of Alibaba Group, was the very person who founded Alibaba Group’s Investment Division and Financing Division and took part in various round of negotiations, such as the public listing of Alibaba, financing from Yahoo, etc. QF Capital’s board chairman Fu Zhekuan, former vice president of Fortune Capital, established it in 2011 on his own, and focused mainly on “immature” startup projects. The company has already invested in various Internet companies, including genshuixue.com and 91160.com.
Around two years ago, Mr. Zhao and Mr. Chen met each other for the first time, but decided to launch angel-round financing soon after 3-hour talk. At that time, TWS was still not mature enough: while Mr. Chen was in charge of e-commerce channel distribution based on his rich experience and deep understanding in the industry, Mr. Huang was very professional in e-commerce platform operation and supply chain management. The startup project seemed to be quite promising due to the appropriate arrangement of different core members’ strengths.
Mr. Fu Zhekuan, however, didn’t think TWS promising at first. Nevertheless, he chose to invest in it since he saw great potential in individuals such as the product manager Mr. Chen Wei as well as an excellent team in TWS. His judgment proved to be accurate at last. Mr. Chen and his team members seized the opportunity and managed to carry out the best business model in terms of e-commerce channel distribution and rural e-commerce. He admitted that he was confident to benefit 1,000 times more than what he invested in TWS.
It is only on March 24th that the media released news about TWS’s financing, yet the deal has already been signed at the end of 2015. As a matter of fact, many investors even sent “secret” inspection team to monitor the traffic, transaction volume, return rate in some outlets in order to the get prepare for possible risks.
As a matter of fact, angel investors also need to be cautious about which startup project to invest in or not. It is reported that Amoeba Capital invested 150 million RMB at first in TWS and managed to achieve a return rate of 1~3%. “We chose 30 out of over 3,000 startup projects, and TWS was one of the only few lucky dogs,” Mr. Zhao explained. Later on, Amoeba Capital also invested in Kuaidi (merged with Didi in 2015) and mogujie.com. We can tell from Amoeba Capital’s experience that “unicorns” didn’t stand out by sheer coincidence.
A digital revolution in rural China
TWS’s ambition is to reach every corner of rural China. But how? Since there must be snack shops in every village or town, all TWS needs to do is set up a one-meter-high electric screen in these snack shops, so that villagers will be able to shop online. All the products on TWS’s platform are quality-guaranteed, and the products vary from domestics, food to fertilizers and cars. In addition, TWS would also provide a series of services such as goods purchasing, produce selling, logistics, charging for the convenience of villagers.
TWS’s spokesman told the media that TWS’s electric screens added over 1,000 RMB on average to the annual revenue of over 8,000 snack shops across China. A tiny snack shop based in WeiChang, Hebei province, benefited the most from TWS’s electric screens. Statistics suggest that the shop earn 30,000 RMB more one month.
“If the electric screens do help these snack shops make extra money, then owners of these shops will be more than willing to continue setting these screens in their shops. In combination with offline operation and education, our business model has already been widely recognized by owners of these snack shops,” Mr. Chen said with pride.
Since TWS couldn’t compete with e-commerce giants such as JD and Alibaba as purchase agents, it chose instead to the stir up the rural Chinese ecommerce market with over 6 million potential users by inviting one “dream partner” at each village or county who are resourceful and well-connected enough locally. Every “dream partner” could put local produce online, so that “dream partners” from other villages or counties could sell them across regions. In this case, all the villages and counties will be linked together. Such down-to-earth business model won support from local governments.
While villagers want to sell their produce, TWS met such demand and help them sell produce to other villages across China though this dynamic. In addition, if one type of produce becomes unsalable in one region, “dream partners” might as well sell it via TWS to other regions.
Different from owners of traditional offline snack shops, “dream partners” are able to purchase produce, allocate them with the help of big data technologies, place orders and track them simply through their smartphones, and then send packages in a unified manner. While villagers are able to buy things more easily, fake products are also driven out of the market. Thus, the entire e-commerce ecosystem in rural China was stirred up.
At present, there are altogether 3,000 members in TWS’s operation team, over 300 staff in the headquarter, as well as “dream partners” across China. These people can not only make a fortune through such business model, but also help keep both talents and tax in villages. Furthermore, TWS can help Chinese villages to transform themselves and better adapt to the Internet age. It is reported that the transaction volume of one village reaches 30 million RMB during 2016 Spring Festival Food Festival/, Lin County of Shanxi Province sold 25 tons of dates within 6 days, while Chen Zifang, a young villager from Badong, Hubei province, set up his own store on TWS and earned over 10,000 RMB within 10 days.
“A great deal more efforts need to be made to further improve the details and really help e-commerce business take root in rural China. Our ambition is improve TWS’s market value to over a trillion in the future”, Mr. Chen Wei told TMTpost.
[The article is published and edited with authorization from the author @Guo Juan, please note source and hyperlink when reproduce.]
Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.