China has two most known e-commerce platforms. Alibaba‘s JD and Tencent‘s T-Mall. The 80% domination of the two giants makes it difficult for other e-commerce startup to develop in the country. Yet, Beidian made it with $129 M raised in its first ever funding round, led by Sequoia and Hillhouse Capital.
Beidian is a subsidiary from mom and baby focused e-commerce, BeiBei. Alen Zhang, a former Alibaba product manager in Hangzhou founded it. Though Beibei has previously had few series of funding rounds, the May 9th funding round is a first for Beidian.
Not just e-commerce, Beidian is a social commerce site
After its’ first launch in 2017, the company did have a different virtue in e-commerce.Instead of just a usual e-commerce, it used the concept of social commerce. Meaning it collaborates both social media and e-commerce in the platform.
The company does not rely heavily on advertisements. Usually, customers buy their goods through searching a specific words. Then based on it, e-commerce sites would recommend goods related to the previous search. And showing ads related to that goods.
But in Beidian, customers can buy goods based on their friends’ recommendation. This is a smart strategy relying on human’s instinct to trust friends more than some unknown ads.
Not just buying, customers can also sell goods. They can recommend or introduce their goods or others’ to their friends. And for every goods, there is a small commission for those who recommends it.
It is a perfect platform for new startup to advertise their brands without any advertisement. Mouth to mouth ads are the most effective one, anyway.
The system attracts many customers for Beidian. Within two years, it recorded more than 50 million registered users. Ten million are monthly active users and there are more than 100 million purchases per business quarter.
According to QuestMobile, Beidian’s monthly users in March increased almost 550% per year, up to 13.3 million. And most of the users are housewives or mothers.