Hong Kong online-shopping platform Ztore has secured US$8 million in series B funding, led by Welight Capital and Kwai Hung Group.
Co-founder and CEO of Ztore, Danny Shum, says the funds will be used to advance the company’s operating systems, develop new technologies to enhance the shopping platform, and launch new services.
He says the company will also continue to explore overseas opportunities and aims to develop cross-border e-commerce during the next two years, taking local brands to markets in the Apac region.
The latest funding round brings to $20 million the amount raised by the three-year-old business.
Ztore provides a platform for Hongkongers to buy everyday necessities with premium product selection, secure certified-payment gateways and convenient delivery services. It features more than 1000 products from local brands that are made in Hong Kong.
Within the last two years, Ztore had recorded more than 200,000 users and the average spend is HK$580 per order.
Shum’s vision is to empower local brands and SMEs and help them grow. There are currently more than 330,000 SMEs in Hong Kong, accounting for 98 per cent of registered enterprises in the territory. Many of them are ‘micro-enterprises’ including family-run businesses, while some produce and sell only a small amount of high quality products.
“Ztore is committed to helping SMEs and local production houses make an online presence and reach a wider audience by providing a platform with sufficient support. In addition, Ztore adopts storytelling methods in its marketing strategies to communicate the unique value of local Hong Kong brands by sharing their touching background stories,” he said.
The new funding round will enable the company to launch a revamped website with a new algorithm that helps predict customer preferences to recommend the best products to buy and a Ztore app is on the way.
“With the new funding, Ztore will hire and train more tech talent to develop in-house research & development that advances its warehouse and logistics management system for a more convenient and variety of delivery options for customers. In the near future, Ztore seeks to overcome the complex logistic challenges in Hong Kong and implement a streamlined delivery process.”
Despite Hong Kong lagging behind in e-commerce, which accounts for just 4.7 per cent of total retail sales in the territory – significantly lower than the Asia-Pacific average of 14.6 per cent – revenue is expected to show annual growth of 8.6 per cent between now and 2022.
Free Wu Xiaoguang, co-founder of Welight Capital and former senior executive VP of Tencent, said Ztore has a great business model that not only is growing rapidly, but it is also leading the growth of the whole retail industry in Hong Kong.
“We are true believers in the team who delivers a better living to Hongkongers. We are very positive about the prospects of Hong Kong e-commerce, and are delighted to support Hong Kong startups with great potential such as Ztore.”
