Article source: https://www.voguebusiness.com/consumers/vc-investing-china
Venture capital wants in on the Chinese consumer — and fast. In the first half of 2021, the aggregate value of VC deals in the Chinese consumer discretionary sector has already reached $11.9 billion. That puts it on track to smash through the values of 2020 and 2019, according to market data and insights platform Preqin.
Investors are energised by Chinese consumers’ resilience during the Covid-19 pandemic, together with a wave of innovative new ideas and the growing buying power of younger generations.
Among the beneficiaries of this influx of investment: Chinese streetwear brand SoulSense, multi-brand retailer Knowin and local beauty brands Into You, Zhuben and DearBoyFriend.
“One thing that has become clear as a result of this pandemic is that the Chinese domestic consumer is far more resilient than other consumers,” says Sunaina Sinha, an angel investor and founder and managing partner of Cebile Capital, a leading advisor in private equity and real assets. “Anything that targets the inelastic demand of that consumer is highly valuable.”
Even before the pandemic, a number of factors were already in play, such as the saturation of the internet market, explains Lanchun Duan, managing partner of global investment platform Cathay Capital. “It’s very difficult to find a new big platform opportunity, so investors are looking into the consumer sector,” she says.