Jiuxian, owner of Beijing-based alcohol delivery service Jiuxian.com, has secured a 300 million RMB ($80 million USD) in equity investment from a series of state owned banks, adding to the number of fast-growing companies in the liquor e-commerce market.
The latest round brings the company’s total investment over six rounds to 930 million RMB ($151 million USD).
China became the world’s biggest wine consumer in 2013, with close to 2 billion bottles sold a year. It also has a thriving domestic liquor trade, particularly in the Chinese spirit ‘baijiu’.
Jiuxian oversees a handful of B2C and O2O businesses including Jiukuaidao [Alcohol Coming], an O2O delivery service which has 100 wine enterprises and 30,000 terminal shops according to the company. It also operates wine B2B e-commerce site Zhongniang.com.
The company has been planning an IPO for over a year now, and the latest investment may be what they need to make the next step. In September 2014 founder Hao Hongfeng hinted at the IPO, saying that the process would possibly be expedited if they were to list in the US. At the same time, competitors Zhongjiu and Yesmywine are gaining momentum with recent funding.
In a 2013 interview with state media outlet Global Post Hongfeng noted that Chinese alcohol was taking up less than 1% of total alcohol sales at the time, and that he was aiming for “a 10 billion yuan [turnover] in 2015.”
According to a 2015 Neilson report released this year online alcohol sales still make up a marginal amount of the total industry but are rising fast.
Consumer behavior may also shift soon, perhaps away from wide-scale platforms. “Respondents say they may begin favoring websites operated by manufacturers for their wine and Baijiu purchases in the next couple of years, while specialty online stores will remain the most preferred avenue for purchasing imported spirits and beer.”