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Billion Dollar Unicorns: Beibei the Baby of the Club

Posted on Thursday, Dec 3rd 2015

According to a Euromonitor report, the baby and child-specific products market has seen double digit growth in China due to the comparatively big number of newborns and rising disposable incomes. Over the period 2009 through 2014, China’s annual childbirths have reached an average of 15-17 million. The recent relaxation of the country’s One-Child Policy is only going to add to that number. Niche commerce player Beibei is already leveraging this high-growth market along with the rising Internet adoption in the country to achieve the Billion Dollar Unicorn status.

Beibei’s Offerings

Hangzhou, China-based Beibei was founded in 2014 by serial web-based entrepreneur Lianglun Zhang. Zhang began his career at Alibaba where he began as a product planner before rising to product manager and director of Win Port, Alibaba’s business directory site. He then quit Alibaba to start his own retail firm Husor. Under Husor, Zhang released his first e-commerce offering in the form of Mizhe.com – an online shopping site focused on women. In 2014, under the Husor umbrella, Zhang released his next website Beibei.com. Beibei is an affectionate term for baby in Chinese. The site was focused on providing Chinese young, middle-class parents with access to infant products. It began as a discount mall for apparel, shoes, and toys, and it has since then graduated to other products such as maternal apparel, diapers, infant formula, and skincare products. The company sells these products at as much as 25% discount over standard retail price.

Beibei prides itself in offering a guarantee of authenticity on products sold through its website. It does not offer ads on the website and instead has a dedicated team that reviews and promotes goods based on consumer demand and feedback. It also keeps a tight control on the vendor quality by continuing to churn them based on feedback from a dedicated quality control group that purchases products anonymously for inspection.

It is these quality focused features that have helped Beibei accumulate a following of 10 million registered users as of March this year. The company offers products from over 5,000 brands including international names of Adidas and Disney along with several other local brands.

Beibei’s Financials

Beibei does not deal with fulfillment on its site. The goods sold are shipped directly by the vendors. Instead, Beibei is a platform for promotion, page design, and customer service for these vendors. In return, Beibei charges them a 5% commission. Beibei does not disclose its detailed financials, but news reports suggest that it is bringing in nearly $32 million in monthly sales.

The company is venture funded with $124.4 million in investments from Banyan Capital Partners, Capital Today, IDG Capital Partners, and New Horizon Capital. Its last round of funding was held in January this year when it raised $100 million from in a round led by Capital Today and New Horizon. The round valued it at $1 billion.

It is a rapid rise to the club for Beibei and by the looks of recent reports, the growth in the Chinese baby and mother product market is not going to stop soon. According to iResearch, China’s mother and child market is expected to be worth 2 trillion yuan (~$313 billion) in 2015. The market is estimated to grow 15% annually with online sales accounting for 30% of sales by the year 2017. BeiBei is just an infant in this rapidly growing market.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

 

This segment is a part in the series : Billion Dollar Unicorns


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