T11 Food Market Receives $100 Million in Financing Led by Alibaba
TMTPOST reported last Sunday that T11 Food Market, a Chinese fresh grocery supermarket brand, has recently received financing of $100 million led by Alibaba, which will be used for the development of existing self-operated business and to conduct new attempts in retail technology, supply chain, e-commerce and entity store empowerment.
According to T11 inside sources, in addition to financial support, there are still some platform docking attempts between the two sides.
Alibaba’s intention of entering the fresh groceries industry dates back to 2012, when Tmall Supermarket set up a fresh-food channel, launched an imported fresh food platform Miao Fresh aiming at the high-end level, set up an agricultural product sales platform TaoXiangTian, invested in fresh food e-commerce platform Yiguo Fresh, then launched brands such as Hema Fresh and Taobao Grocery Shopping. On September 14, Alibaba MMC announced that it would integrate and upgrade “Hema Fresh Market” and “Taobao Grocery Shopping” to “Taocaicai” to establish a unified customers perception.
Judging from the trends above, it is not surprising that Alibaba has invested in T11 to expand their business in the fresh groceries sector this time.
Established in 2018, T11 Food Market mainly aims at upgrading the consumption needs in China’s first-tier cities, and provides global premium fresh food and general food business. It is another entrant of “fresh + catering” after Hema Fresh and 7FRESH. Its founder, Du Yong, was also the founder of 7FRESH.
It is rumored in the industry that during Du Yong’s tenure, due to internal problems at JD.com, 7FRESH faced great differences in the development of its business model. Therefore, Du Yong left with partial founding teams and created T11.
Because of Du Yong, investors have high expectations for T11. Though without any opening entity store, T11 has raised over 100 million yuan in its first phase of angel investment, which was jointly led by IDG and Everbright Holdings New Economy, followed by GOME, iVision Ventures and Yisan Capital. In April 2020, T11 completed an A round of financing worth tens of millions of dollars, which was exclusively led by MSA Capital.
Because of the origin of Du Yong and 7FRESH, the first T11 store has obvious 7FRESH style. In June 2019, the firm opened its first store near Chaoyang Park in Beijing, with a store area of about 4,000-5,000 square meters, selling fresh food, daily necessities, cooked food, catering and so on. This store is very similar with an upgraded version of 7FRESH in terms of tonality, space and functional layout of the store, as well as product content.
However, with the opening of new stores, T11 is erasing the traces of 7FRESH gradually. Up to now, T11 has five stores in Beijing, one in Shanghai and one in Wuhan.
As for the profits situation, reference data published by the team shows that the first T11 store in Beijing has achieved monthly profit after just one year of operations, with nearly 150,000 active users at a single store, mainly concentrated within a 3km radius. In addition, the firm has 7,000 globally preferred fresh SKUs, an average customer transaction above 180 yuan and fresh food sales accounting for more than 65%.
An expansion of seven stores in more than two years is a relatively restrained move. Du Yong once admitted that T11 focused more on doing a good job in products and operations, rather than accelerating the expansion scale. After this financing, T11 will continue to expand. On December 15, its subbranch in Beijing Xixi Friendship Store will open; In January 2022, the second store in Shanghai will also start business.