Upmarket Retail Store KK Guan Completes 400 Million Series C Funding
KK Guan, a Chinese-based retail brand mainly selling imported skin care products and snacks, announced today that it has completed a series C funding round of CNY 400 million (USD 60 million).
KK Guan (KK馆), a Chinese-based retail brand mainly selling imported skin care products and snacks, announced today that it has completed a series C funding round of CNY 400 million (USD 60 million), reported by iYiou. This round of funding was led by Alibaba's eWTP Science Technology Innovation Fund with participation from Heizao Capial (黑枣资本), Shenzhen Capital Group (深创投), Matrix China (经纬中国), Hongtai Capital (洪泰资本), Bright Venture Capital (璀璨资本).
This round is arguably the first large financing round in the retail sector in 2019.
Shenzhen Capital Group, Matrix China, and Bright Venture Capital are the existing investors.
The capital raised from this financing round will be used to 1) improve its supply chain, 2) expand offline winning more market shares, 3) upgrade its product line and brand image balancing users satisfaction and price ranges.
KK Guan offers both online and offline options, while offline stores are more valued. For the online part, it displays products by popularity and has an online community for its users to share their reviews and be friends with each other (to maintain user activation and boost sales).
According to 36kr, it now has more than 100 stores in tier 1 to 3 cities, usually located in the first or the ground floor of shopping malls. It usually takes 12 to 24 months for a store to break even. Ten percent of its stores generate monthly revenue of more than CNY 1 million (USD 150 thousand).
KK Guan is doing well in improving efficiencies and being data-driven.
In terms of efficiencies, average 200 meter square shopping outlets require more than 10 staff to help, however, it only needs 6, says its founder and CEO.
In terms of data-driven, it started to develop a big data system which analyses what individual customers buy and the sales figures that each store reaches then to determine its products mix. KK Guan will abandon around 5 thousand SKUs and launch 300-400 SKUs each month. However, it increases the difficulty of offline inventory management.