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New shopping app targets Chinese women

By Lia Zhu in San Francisco | China Daily USA | Updated: 2017-02-07 11:45

A US e-commerce company is looking to tap into the demographic of fashionable, young, tech-savvy women in China by selling them top brands through mobile messaging.

The San Francisco-based startup, Operator, recently suspended its US service to focus on the Chinese market because of the "surging business" it has experienced since it expanded to China last November.

With their mobile shopping app, Chinese users are connected with US-based "experts" who provide recommendations, and the company's fulfillment team then sources and delivers the products. Online translating tools are available for customers who don't read English.

Most of their Chinese users are females aged 25 to 35. A lot of them are young mothers and young professionals, according to the company, which declined to disclose specific numbers of users.

"We think Chinese customers have a big appetite for authentic goods and access to good products," said Robin Chan, CEO and co-founder of Operator.

"The e-commerce and retail business inside China is not as mature as in the US," he said. "I think for many decades US consumers have been given the best deals. If you can give those kinds of deals to Chinese shoppers, I think they will find it very valuable."

The most popular categories are fashion, beauty and baby goods. The company is currently working with hundreds of US brands for inventory. Top sellers include Kate Spade New York, Lancme, Anthropologie, Kiehls and baby formula Enfagrow.

"The demand for authentic products from the US is very strong," said Chan. "The key thing we are looking at is the healthiness of the market in terms of overall performance."

In contrast to other e-commerce platforms, Operator features the "conversational experience", Chan said.

"Conversational commerce is the next big wave in e-commerce because everybody has a smartphone and the most

popular platform is messaging - China has WeChat and the US has Facebook messenger," he said. "Messaging will be the way people will shop, along with talking with friends."

The shopping experience will be more like the conversation one has in a store, rather than the e-commerce experience, which is just clicking buttons, he explained.

The startup, which was founded in 2015, has raised $25 million in funding to date. It has recently closed $15 million in Series B financing to help fund its global expansion, starting with China. The investors include GGV Capital, which led the round, with newcomers Formation8, Morningside Ventures and Horizons Ventures, and existing Series A investors Greylock Partners and Expa.

"Chinese consumers will accelerate the entire global platform," said Chan. "If you want to build a global company, you don't think of China as an afterthought; you must start early."

He also admitted there were several challenges associated with cross-border shopping.

"It's a relatively young industry, (we need) a lot of solutions to make the products available to Chinese consumers, including translation between Chinese shoppers and the US experts, inventing new types of tools for both sides and making sure we can offer the best prices to the Chinese," said Chan.

"The exchange rate is always changing, which is challenging, too," he added. "We need to make sure we always stay on top of Chinese trends, because product demand keeps changing in China.

"(There are) many, many pieces that are challenging, but the demand is definitely there," Chan said.

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