Baidu has just signed a new partnership with COFCO’s e-commerce portal Womai and will commit an investment of over USD 200 million, Tencent Tech reported on Monday.
Womai means ‘I buy’ in Chinese and was founded by COFCO in 2008. Targeting white-collar workers, housewives and youngsters, Womai sells fresh food, infant food, prepared products, wine and beverages.
According to a report by Sootoo, a market research agency in China, Womai ranks third in the online food retailing business with 17% market share at the end of the first half of 2015, behind Alibaba’s Tmall and Tencent’s ally JD.com.
Womai is estimated to have brought in around RMB two billion (USD 3.17 billion) in sales revenue for 2015, a figure which suggests it will barely break even, according to insider news.
Womai closed a B-series funding of USD 100 million last August. Investors included IDG Accel Partners and SAIF Partners. Apart from Baidu, Taikang Life Insurance was also reported to have participated in this round of funding.
Womai’s primary shareholder is still its founder COFCO, i.e. China National Cereals, Oils and Foodstuffs Corporation. It is one of the biggest state-owned companies in China and also a Fortune 500 company. COFCO focuses on the import and export of foodstuffs.
Utilizing COFCO’s established supply chain, Womai has direct access to domestic and overseas suppliers instead of distributors, which enables Womai to have stronger control over the quality of its commodities. Womai also has built up its own logistics chain.
Womai is not the first e-commerce portal Baidu has invested in this year. Last month, Baidu co-invested in children’s product specialist Mia, helming the USD 150 million funding round together with Sequoia Capital and HCapital. Baidu’s aggressive moves in e-commerce may just be the thing to flare up old rivalries with chief competitors Alibaba and Tencent.
Womai and Baidu have not yet issued any statements about the new investment.