China’s leading online wine and drinks retailer 1919 has raised RMB 200 million (US$30.9 million) in its latest round of funding from a Chinese property developing company, a much-needed cash injection as the company plans to replenish stocks in anticipation of upcoming sales season.
The funding from Tianjin Runze Wuye Company, owned by China’s major property firm Sunac China Holding would be mainly used to replenish wine and spirits stocks for the shopping season in Autumn, the company explains.
The cash injection will also increase the company’s cash liquidity as it expands operation to take up more market share, it adds.
The news came on heel of 1919’s positive H1 financial report. The company has bounced back from a pandemic-hit year to report a 50.43% growth in revenue to RMB 2.58 billion (US$399.2 million).
Its net profit made a remarkable turnaround, from a loss of RMB 143 million to a growth of RMB 65.34 million in the first half of the year, given that from 2016 to 2020 the company has been operating at a loss each year.
Even with Alibaba’s RMB 2 billion (US$290 million) investment in 2018, it had failed to turn profits for the Chengdu-based wine and spirits giant. It also scaled back its operation in 2020 amid the pandemic, as we have reported.
Its founder told Yicai that the company’s sales tanked between 80% and 90% in the month of February, and expanded its services including warehousing and home-delivery services for some fast moving consumer goods.
Founded in 2010, 1919.cn has about 1900 stores in over 500 cities across China.