Ushopal seeks to charm Chinese beauty lovers with niche Western brands – TechCrunch
What will China’s response to EstÃ©e Lauder look like in the digital age?
According to Ushopal, it will provide a seamless online and offline shopping experience, where savvy beauty shoppers in China can discover niche and tasteful brands and learn their stories.
Ushopal was founded in 2017 by J&J veteran Lu Guo as an âomnichannelâ partner for luxury beauty brands at a time when online and offline consumption was increasingly merging in China. Unlike traditional import distributors, who simply put merchandise on the shelves, Ushopal offers a holistic solution that helps brands grow their digital and physical retail channels as well as marketing content through its network of 2,500 influencers.
Ushopal felt that partnerships were not enough, so in 2019 it went one step further by adding a strategic investment arm to seek deeper operational influence over brands. Check sizes range from $ 10 million to $ 100 million, and for larger rounds Ushopal says it can leverage its own investors such as Cathay Capital, a private equity firm focused on global companies.
For example, Cathay Capital bought a minority stake in Parisian high-end fragrance brand Juliette Has A Gun. As an investor and partner, Ushopal has helped the brand, which was founded by the grandson of legendary fashion designer Nina Ricci, to increase the gross value of its merchandise in China from zero to over 70 million yuan in a year.
To increase its capital, Ushopal raised $ 100 million in March, bringing its total funding to $ 200 million. In addition to Cathay Capital, its former investors also include FountainVest Partners, a Chinese private equity firm that recently acquired the Canadian high-end outerwear brand Arc’teryx, and Chinaccelerator, the Chinese SOSV-focused accelerator. cross-border businesses.
Chinese consumers are addicted to e-commerce today, but there is still much of the shopping experience that Alibaba’s Marketplace and WeChat mini-stores cannot deliver. As such, Ushopal last year opened its first multi-brand store in an upscale shopping center in Shanghai, offering brands normally found in Neiman Marcus in the US and Bon MarchÃ© in Paris. The aim is to showcase treasures from around the world, an idea that is captured by the chain’s name – Bonnie & Clyde – the names of a couple of Depression-era criminals who are often described as chic and rebel in popular culture.
Customers do not pay at the B&C brick and mortar store; instead, they order through its app and can have the order delivered to their door within four hours if they live in Shanghai. The delivery time is much shorter than the standard e-commerce import practice in China, which normally takes three to seven days for goods to arrive from their overseas distribution centers.
B&C, on the other hand, stores in its own warehouse in a free trade zone in Shanghai, which allows for much faster delivery. And because he owns the exclusive and selective distribution rights to the brands he works with, he has a good understanding of how much inventory to keep.
In Chinese beauty stores targeting the mass market, shoppers are often seen moving from one busy shelf to another while their eyes are fixed on their phones., browsing product reviews on content commerce apps like Xiaohongshu. B&C wants all the attention of its customers by limiting its product number in store and by setting up a team of beauty advisers. The demographics it targets are also very different.
âWhen they travel to the United States, they go to Barneys, Saxs Fifth Avenue and whey that they are in the UK, they go to Harrods,â said Lau, vice president of brands at Ushopal, in an interview with TechCrunch. “They know the experience and they are not there to line up.”
Last year, B&C generated more than $ 200 million in gross merchandise from products it bought from a dozen brands and subsequently sold in China. The average ticket size sold was over 5,000 yuan ($ 770), with buyers often spending more than 10,000 yuan per order, according to Lau. Many of the clients were what he called “rich second generation,” roughly the Chinese equivalent of children in trust funds, as well as “well-to-do wives.”
Ushopal does not limit its portfolio to foreign products. It doesn’t distinguish the origin of a brand, Lau said, whether Chinese, Japanese or European. Although the company mainly works with Western brands at the moment, Lau said Chinese brands are becoming more sophisticated and often have a better understanding of the local market.
âFor us, it’s just about creating great brands. It’s like EstÃ©e Lauder, who has brands all over the world. We are a China based company, but a global luxury company. “