Interview│ 5 tips from the founder who won the shareholding of Japantown and the valuation exceeded 800 million

Special interviews

Written by: Wei Yingzhi

2021-06-19 09:00

Last update date: 2021-06-19 09:00

Under the raging epidemic, Hong Kong’s tourism, hotel, and catering industries are in dire straits, but retail e-commerce has "a blessing in disguise" and has unexpectedly become one of the big winners.

Youhe YOHO, founded in 2013, has firmly established itself in the local online shopping market. Recently, it has also received a stake in the parent company of the local homeware retail giant Japantown International Home Retail (1373), and its valuation has soared to more than 800 million yuan.

In the field of electronics and electrical appliances, Youhe successfully won Hong Kong TV (1137) as the number one e-commerce company in the region. Its turnover exceeded 100 million yuan for three consecutive years, and it successfully bounced back with five tricks behind it.

2020 is undoubtedly a difficult year for industries that rely on tourists, but it is a big opportunity for daily necessities stores and e-commerce companies doing local business.

Kathy, one of the founders of Youhe YOHO, said that the epidemic is a huge business opportunity for online shopping companies, accelerating the transformation of Hong Kong people’s consumption patterns. “Hong Kong people reduce their shopping trips and switch to online shopping at home, waiting for the goods. When it was delivered to the door, Youhe's sales increased without decreasing, and more people paid attention to online shopping."

She revealed that Youhe's sales doubled during the epidemic, and its turnover has exceeded 100 million yuan for three consecutive years. This year's goal is to reach 1 billion yuan.

At the end of May this year, the parent company of Japan City International Home Retail (1373) invested more than 23 million yuan in equity in Youhe.

(Photo by Ouyang Dehao)

What's more eye-catching is that the company has recently been awarded "Phase in" by the international home retailing company, the parent company of the local homeware retail giant Japantown, to subscribe for 5.4659 million A-share preferred shares, accounting for approximately 2.77% of the enlarged share capital, with an amount of approximately HK$23.34 million.

After this capital injection, Youhe's valuation immediately rose to HK$843 million, which is not simple.

Tip 1: Selling masks to expand customer base, users have reached 580,000

Youhe, which started out selling electronic products in 2013, broke through with a wealth of choices and competitive prices and became one of the major e-commerce companies in Hong Kong.

It is the first time that customers are attracted to online shopping, and then the next time is possible.

Friends who know this well, when Hong Kong experienced a "mask shortage" at the beginning of the epidemic, "Liao Guojie" actively searched for masks and tried to attract customers to use its platform.

Xu Jiaying said, "Former Youhe did not sell masks, but because of the close relationship with the suppliers, they can obtain additional stocks of masks such as South Korea, Taiwan and Japan. At the same time, they cooperated with a famous Japanese mask manufacturer to produce masks for friends and masks at market price or Sell ​​at cost".

Afterwards, Youhe also took the opportunity to launch a lot of electronic products related to epidemic prevention, such as air cleaners, UV disinfection lamps and hypochlorous water generators, which successfully attracted a number of new customers and increased the customer base.

Xu Jiaying, founder of Youhe, said that a lot of electronic products related to epidemic prevention have been launched during the epidemic, which has driven sales.

(Photo by Li Zetong)

Xu Jiaying revealed that Youhe users had only 300,000 in February last year, and reached 580,000 by the end of May this year, an increase of nearly double.

According to the data survey agency Alexa, Youhe is the number one local electronic appliance website with nearly 600,000 registered members. In March this year, the number of views exceeded 1.8 million, which is about 30% higher than the 1.3 million in HKTVmall during the same period.

As of the end of May, Youhe had 1.7 million monthly active users (MAU).

As of the end of May, Youhe had 1.7 million monthly active users (MAU).

(Provided by interviewee)

Trick 2: Provide cash payment discounts

Selling masks succeeded in attracting customers, but how to retain customers?

After all, Youhe initially focused on selling electrical appliances, but the two major local electrical appliance chains have been "flags" in Hong Kong for many years. Most Hong Kong people buy electrical appliances from chain stores. In order to attract customers to switch to Youhe, they will inevitably launch a "silver bullet offensive." .

Xu Jiaying said that when some e-commerce companies provide credit card payments, they may charge as high as 3% handling fees. Electronic products are expensive, even more than 10,000 yuan. The 3% charge will be a big number for consumers.

Therefore, the company allows customers to pay directly to the store, use FPS or online transfer, and rebate 3% of the fee, which is a discount in disguise.

At present, Youhe uses big data to analyze customer needs before purchasing, reducing the chance of stockpiling.

(Provided by interviewee)

Tip 3: Make good use of big data to prevent the hoarding of ``slow-flow products''

At the same time, Xu Jiaying also revealed that Youhehui will use big data, such as foreign and domestic e-commerce statistics, online search engine data, related category discussions, epidemic news, etc., to discover the next best-selling product.

She gave an example. Youhe observed data during the epidemic and found that because people cannot go out to exercise or do GYM, consumers' demand for indoor treadmills or other fitness equipment has greatly increased.

In view of this, Youhe introduced a new foldable treadmill at the time, which eventually sold 5,000 units.

"This brand won the German IF and Red Dot Design Awards. Earlier, when singer Wu Yekun (Kun brother) returned to the hotel in Japan for isolation on the 21st, Hong Kong sister Mai Mingshi also bought one for Kun brother."

Big data is also used in Youhe’s internal system to integrate user consumption data to ensure inventory operations. For example, more "universal" and best-selling products are not afraid to buy in, such as Apple’s Airpods Pro, Nintendo’s Switch and Ringfit packages, and IRIS OHYAMA silent circulating fan.

Youhe's goal is to start with about one month's inventory. Based on a set of logic, the intelligent system estimates that inventory that is expected to be sold out within 60 days will be defined as "slow-flow products."

For "slow-flow products", the system will remind you that you need to clear the goods to avoid stockpiling excessive goods.

For example, a certain brand of air purifiers were so hot at the beginning of the epidemic that they were out of stock, but after the arrival of the goods, the sales volume was not as good as before, and the system would automatically cut the price and clear the goods.

Earlier, singer Wu Yekun (Ge Kun) returned to Hong Kong from Japan to be quarantined in a hotel on the 21st. His good friend and Hong Kong sister Mai Mingshi bought a foldable treadmill for Ge Kun.

(Online picture)

Surprising Tip 4: Streamline the provincial rent in stores

Many people are accustomed to going to the store to see the actual products before buying electrical appliances. However, in recent years, there are more and more brand styles, and sometimes there are no actual products in the store, so you can only see the product introduction leaflet.

"Most of the chain stores are small in size and the products that can be displayed are limited, so Youhe's policy of opening a physical store is the opposite."

She continued that the two stores of Youhe focus on customer experience, and each product does not need to be stocked too much, so there is no need for a large store network.

Youhe has a self-operated warehouse of about 20,000 square feet, responsible for picking and packing (pick & pack) process, and also stores some more expensive small goods, products that are more difficult to organize, such as mobile phones, game consoles, and computers Wait.

The other is an outsourced warehouse shared with partners, responsible for large household appliances such as refrigerators, air conditioners, washing machines, etc. The delivery process is relatively simple.

Compared with physical stores, Youhe's online store has no store area restrictions. In addition to popular home appliances, other electronic products that are less common in Hong Kong have been introduced with greater flexibility.

Youhe founder Xu Jiaying said that Youhe promised that if you buy the spot, it will ship within 8 hours, so the order is placed in the morning and the product will be received in the afternoon.

(Photo by Li Zetong)

Tip 5: Outsourcing logistics to save money

In terms of logistics and transportation, Youhe does not hire its own fleet like Hong Kong TV. Instead, it chooses to outsource the fleet, which can further reduce costs.

"Hong Kong's current logistics delivery service is doing well. Youhe cooperates with several logistics delivery companies, so we will make good use of the different service hours of each logistics delivery company."

She explained that each has the advantages of different service time, delivery volume, delivery location, and freight. The system will prompt according to the order product and assign the most suitable logistics company to deliver.

At present, Youhe’s internal indicator is that users purchase spot goods, which will be shipped to the logistics delivery company within 8 hours, so the order can be placed in the morning and the product can be received in the afternoon.

In addition to delivery, installation is also an important part of consumers. Youhe also chooses to outsource. "Most large home appliances will provide services, some will be brand-named installation services, and some will be installed by outsourced companies."

For the quality of outsourcing, Youhe has arranged a scoring criteria. If the installation company's service is not good this time, Youhe can show through the score and replace other installers next time.

Xu Jiaying revealed that the current maximum ratio of friends and users is between 25 and 44 years old. Most of this age group makes good use of computers or mobile phones to shop online.

Coupled with a period of time in the workplace, high spending power, or organize a family or have already bought a house, there is a greater demand for buying home appliances.

Cooperation with Japantown in the future is expected to further expand the user base.

Interview│ 5 tips from the founder who won the shareholding of Japantown and the valuation exceeded 800 million

E-commerce of electronic appliances