Online and Offline dumpling provider Xiao Heng announced that it finished a new round of financing, receiving RMB 50 million (USD 7.6 million) from famous Chinese investment fund, ZhenFund.
Jingji VC and Qingsong Fund also contributed to the recent round of financing. Last January, ZhenFund, co-founded by Xu Xiaoping, co-founder of New Oriental Education & Technology Group, injected several million yuan as an angel investment into the platform.
Xiao Heng, aiming to build a famous fast-food dumpling brand, operates its own brick-and-mortar stores and also online dumpling delivery business. With their slogan, “it’s fashionable to eat dumplings”, Xiao Heng wants to provide this traditional food via their online platform to the huge group represented by smartphone-savvy millennials.
In August 2014, Li Heng founded Xiao Heng based on ten years of entrepreneurial experience. Li Heng chose dumplings over other famous Chinese foods including pancakes and noodles because he believes the tradition and cultural significance of eating dumplings in north China during China’s most important holiday, Spring Festival, will pique global interest in the product.
At this point, Xiao Heng has less than ten stores, mainly in Beijing. Compared with its online business, offline stores perform better, accounting for 70% of the overall dumpling orders and sales.
Its main competitors are decades-old dumpling brands including Da Niang Dumpling and Oriental Dumpling King, who focus on expanding offline chain stores. But according to Xiao Heng-investor Zhu Yonghua, director of modern agriculture and food investment for Legend Holdings, the company has an edge compared with other dumpling brands in its low operating costs and flexible O2O model.
According to China’s 2015 catering industry development report, issued by state news website China.com.cn, the traditional catering industry is expediting a movement into the online space. E-commerce and O2O services have brought revolutionary changes to the industry.
More Chinese food chains are trying hard to take advantage of the internet, aiming to bring their food into the global market. For instance, Huangtaiji Jianbing, with plans to sell a traditional Chinese pancake like sandwiches from KFC, raised RMB 180 million (USD 27.5 million) in Series B financing last year and will set up its first batch of foreign stores in Australia this May.
(Top photo from womai.com)
