It seems that Alibaba Group and Tencent Group are always in the news, talking about their latest investments into the US market e-commerce companies. But, who is investing in those Chinese companies who are looking to start on the e-commerce market? That falls to US firms who are looking to invest into the next big thing. Namely, Sequoia capital and IDG Capital Partners are making the news with the investments that they are making.
IDG Invests into 18 Start-Up’s
Yes, that is right, IDG has invested into 18 startups that are looking to enter into the Chinese e-commerce market. IDG has made a name for itself with investing into businesses, however, the e-commerce sector of their business makes up the largest part of their investments. In fact, of the 73 investments they have made in the past year, 25% of these were in the e-commerce market.
IDG’s investment manager, Xie Wenzheng stated:
“We regret that we didn’t invest in some e-commerce Chinese giants in the past, but we have enhanced our portfolios in the e-commerce industry.”
One of the biggest start up’s that has attracted the attention of IDG is Weishang. This means micro-commerce and it is all about trying to use social media in order to recruit individuals to sell products to their friends on the social network. With the popularity of Weibo and WeChat, IDG saw an area that did need help in getting everything up and running.
Learn more about social media in China here
“In China, about 10 million people are working as sellers of Weishang. It’s a totally different business model compared with traditional online retailing.”
Behind Weishang is the Qingcong Media group, which is where IDG has invested their money. Qingcong is there to help people develop their profiles and learn how to use Weishang effectively in their goals.
The Success of Weishang
According to Xie:
“Some Chinese brands, such as cosmetics brand Kans, have topped 100 million yuan [$16 million US] per month in sales from Weishang.”
The success that Weishang is seeing is due to the fact that this is using social media channels for advertising products to those whom a person already has some form of trust with. This is vital to success, as people are more likely to purchase products from someone that they are already familiar with, as they feel this person would not do them wrong.
See how social media is affecting consumers, here
It is a remarkable platform, and one that already seems to be paying off for several brands. It seems that IDG made a smart investment with Weishang.