Youzan is widely considered to be the Chinese Shopify.
In just the last quarter of 2020 alone, Shopify’s GMV surpassed $30 billion. As a result, various businesses are paying much closer attention to Youzan, and are looking to grow on this platform.
According to Bai Ya, the CEO of Youzan, his company is a combination of Shopify and Square, viz the Chinese equivalent of not one, but two fantastic B2B companies.
How It Began
Bai Ya was a head designer at AliPay before leaving in 2011. After a failed startup endeavor, he founded Youzan in 2012. It initially focused on mobile shopping & began by just assisting merchants to sell on WeChat and manage their subscribers.
How It’s Going
However, he soon realised that there was a chance to actually run these merchants’ shops for them. Set up the shop, manage orders and customers, organise promotions, etc. That quickly turned into Youzan’s main source of income.
It registered over 100,000 customers last year (a year-on-year growth rate of nearly 60%), and generated 48.1 billion yuan in GMV during the first half. (a year-on-year increase of 4%). Because of Covid, Youzan experienced growth for the first half of 2020. It generated a QI-Q3 revenue of $184 million this year,
How Does Youzan Generate Revenue?
We should point out that SaaS accounts for only a portion of the total revenue. But it is definitely the majority. 60% of its revenue comes from the sale of SaaS solutions, with an additional 10% coming from extended services for merchants, which include everything from guarantees to promotions.
Youzan provides SaaS solutions to merchants for managing their offline locations. It has tailored solutions for retail chains, beauty parlours, and some other verticals. Assume you own a gym with multiple locations. You can purchase a Youzan software subscription that will provide you with not only an online storefront, but also a session booking system. In addition, Youzan provides you other tools that will assist you in driving clients, who find you online, to purchase from your offline locations and vice versa.
Youzan’s Growing Offline Presence
In 2020, 75% of Youzan’s customers had an offline presence. Furthermore, in August 2018, Youzan opened its first retail store. Essentially, it is similar to a physical Amazon store, with the products presented being some of the most popular items offered online.
Is The Future Bright For Youzan?
It’s difficult to compete in a market dominated by Alibaba and Tencent. This year, Youzan suffered operating losses of $119 mn. Fans of the business, on the other hand, are unconcerned because the SaaS business is driving the majority of the growth. Shopify didn’t make its first profit until late 2017, eleven years after it was formed. Youzan is only 9 years old and is significantly investing in R&D, therefore we think it’s only a matter of time.
Explore the multiple ways your business can grow with Youzan. Digital Crew is a Chinese digital agency that provides a multitude of services such as online interactive marketing, commodity sales, online and offline connections and open data. Get in touch with us today.