Xiu.com, Chinese ecommerce site focusing on luxury and fashion goods, announced raising US$100 million in series B. The round was led by American private equity Warburg Pincus, with previous backers Kleiner Perkins Caufield & Byers participating. KPCB invested over 20 million in its series A earlier this year.
Founded in Oct, 2007, the Shenzhen-based company offers its customer with luxury goods (including LV, Prada, Burberry, HERMES and so on, account for 15% of its inventory), famous overseas brands (account for 25% of its stock) and well-known home-grown brands (60%). The company has set up fashion buyers’ office in New York, LA, Australia, Paris, London, Italy, etc..
The largest series B funding in China’s ecommerce front highlights investors’ belief in the online market size for luxury goods. According to the Beijing-based market research firm Analysys international, the market size for online luxury items is expected to surpass RMB 16 billion (US$ 2.5 billion). While according to a research by World Luxury Association, China is set to replace Japan as the largest consumer of luxury goods. That’s a sizable and tempting market.
Xiu.com has some serious competitors in China, including ihush.com, Shangpin.com and VIPStore.com, which separately raised US$ 43 million (from CapitalToday and Matrix China), over 50 million (series C) and tens of millions dollars (series C).
Although well-funded, some long-lasting problems concerning them are (a) counterfeits are all over the internet, made some consumers have a preference over offline purchasing; (b) range of items is not as comprehensive as offline distributors. Online luxury stores still have a long way to go to win over offline customers.