PUPUMALL raised a second round of funding in 2019 and will focus on expanding to Guangdong
Fremont, CA: PUPUMALL, the front warehouse fresh grocery brand, obtained a new round of funding worth USD 100 million, out of which USD 30 million is already made available to the company. These funds will assist in enhancing the brand's supply chain construction in the southeast China region.
Earlier in 2019, the company closed its Series B1 funding round of USD 55 million. The latest funding round is said to be the second investment injected to PUPUMALL in the same year.
PUPUMALL, conceptualized and founded in 2016, is an online shopping platform that offers fresh groceries as its focus products. The online vendor also provides items that are categorized as daily necessities with over 3,600 SKUs. The highlight of the service is the guarantee of offering delivery in 30 minutes for the customers who order from within a 1.5 km range of its warehouses.
At present, the company's primary business penetration area covers Fujian, with the number of employees reaching almost 10,000. PUPUMALL entered the Shenzhen market area in 2019, and it also plans to extend to Guanzhou by March 2020. The outreach is designed to extend in the eastern, central, and western regions as well.
"The founder of the company, Chen Xingwen, has positioned PUPU as a tech company. The move to enter Shenzhen also shows how much he values its strong technology atmosphere and talent supply," explained one of PUPU's suppliers.
Many competitors of Fujian's PUPUMALL, such as Beijing's Miss fresh and Shanghai's Dingdong Maicai, have experienced a rapid roll-out in the past couple of years. All these brands have adopted the collective label "front warehouse" and "delivery within 30 minutes” plan. This game strategy is due to its design, is a model considered to be regarded as a substantial capital investment. The investors of the latest fund round include Sequoia China, Tiger Fund, Sequoia China, and Capital today and also meituam.
Some giant players in the fresh produce and grocery market, such as Freshippo under Alibaba, have also expressed concerns over the same model of front warehouses in a public speech recently. It was stated that the customer unit price, the razor-thin gross profit, and the high loss rate are the problems that yet to overcome.
Wang Jun, CFO of Miss Fresh, has also stated that there are complexities in lowering customers acquiring cost, rent, and labor cost to generate a profit. As one of the major players in the market, the daily delivery orders rate of Miss Fresh is four times that of conventional logistics delivery efficiency. The operation is algorithm-based and order volume has assisted the company in approach to profit. Presently, 10 percent of Miss Fresh's front warehouses have generated profit and expects more to pass the BEP next year.
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