Inkstone
    May
    31
    2018
    May
    31
    2018
    How a quest for soy sauce created a multimillion-dollar online business in the US
    How a quest for soy sauce created a multimillion-dollar online business in the US
    BUSINESS

    How a quest for soy sauce created a multimillion-dollar online business in the US

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    Photo: David Wong
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    When Alex Zhou first moved from the Chinese port city of Dalian to study at Kansas State University, he never imagined that getting his hands on soy sauce would entail a two-hour drive.

    To Zhou, chief executive of US-based e-commerce site Yamibuy, the college town of Manhattan, Kansas, seemed to be “in the middle of nowhere,” with almost no Asian supermarkets or restaurants serving authentic Chinese dishes.

    Even the internet failed him. He found the Asian foods available on Amazon to be limited, and what little there was catered more to the tastes of Americans than to Asians.

    Group 5
    I had friends who would drive hours every weekend to have authentic dim sum in a Chinese restaurant
    -
    Alex Zhou, CEO, Yamibuy
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    “The closest mid-sized Asian supermarket was two hours away: there were no other options,” Zhou, 32, told the South China Morning Post. “I had friends who would drive hours every weekend to find specific Asian products or have authentic dim sum in a Chinese restaurant, and [that they were willing to do this] seemed crazy to me.”

    Back then, Chinese firms like Alibaba (which owns Inkstone) and JD.com had seen their businesses boom in China, on the back of a burgeoning e-commerce market and a rising middle class. But the two companies did not yet offer international shipping options, which meant Chinese students could not buy and ship their favorite snacks from China to the US.

    Alex Zhou, CEO of Yamibuy.
    Alex Zhou, CEO of Yamibuy. Photo: Handout

    Chinese students make up almost a third of the 1.2 million international students in the US, and there are about 2.4 million foreign-born Chinese people living in the country.

    Zhou seized the opportunity to claim this market for Yamibuy. After he graduated in 2013, he moved to Los Angeles and forked out $50,000 to start Yamibuy, with plans to stock Asian products that were hard to find in the US.

    “There was a large demand for Asian products, but nobody was fulfilling it,” he said.

    The Yamibuy site is stocked full of hard-to-get Asian delicacies and staples.
    The Yamibuy site is stocked full of hard-to-get Asian delicacies and staples.

    Starting from scratch

    With no related experience, Zhou had to start from scratch. To find suppliers, he travelled to large Asian supermarkets and stood at the back of the store, writing down the supplier names that were emblazoned on delivery trucks as workers carted boxes of goods through the back door.

    The initial version of Yamibuy was a bare-bones site and a one-man show – Zhou paid $790 for a Chinese web development company to build the first version of the e-commerce platform (“The basic functions worked but the website was really crappy, very bad”), rented a small 2,000-square-foot warehouse, and stocked 200 different products – mostly snacks from Japan and Korea that were popular among Asians but hard to find in Asian supermarkets.

    Yamibuy stocks foods that not even Chinatown has.
    Yamibuy stocks foods that not even Chinatown has. Photo: Shutterstock

    Zhou’s initial inventory sold out quickly as word of mouth spread. Demand grew steadily, and within three months, he upgraded to a warehouse that was three times larger.

    Less than five years later, Yamibuy now boasts 450,000 square feet of warehouse space for 20,000 different products, which include categories such as cosmetics and kitchen electronics.

    Today, Yamibuy has more than 800,000 users and sees “double-digit growth” every year. The company processed $100 million in transactions in 2017 alone.

    Asian skincare products are particularly popular on the site.
    Asian skincare products are particularly popular on the site.

    Social system

    Yamibuy’s success so far boils down to the site’s ability to build a strong community of buyers.

    Taking a leaf from the so-called “Social+” model behind most of China’s e-commerce and social networking platforms, Zhou incorporated functions in Yamibuy that allowed consumers to share their purchases on social media channels. He also included social features such as a blog section, where users can share photos and pen reviews of items.

    Earlier this month, Yamibuy also introduced a Yelp-like feature in its mobile app to provide reviews of Asian restaurants catering to Asian tastebuds.

    The feature is taking a page from Meituan-Dianping, a massive platform that started out as a review platform for restaurants but now offers everything from food delivery to discount coupons and restaurant reservations. Zhou believes that Yamibuy can build a similar ecosystem of services.

    Yamibuy even stocks cans of Kvass, a Russian fermented bread drink produced by Chinese drink maker Qiulin.
    Yamibuy even stocks cans of Kvass, a Russian fermented bread drink produced by Chinese drink maker Qiulin. Photo: AP Photo/AFI, Aigars Jansons

    Branching out

    Currently, 90% of Zhou’s customers are immigrants or Asian Americans. But Zhou expects his non-Asian customer base to grow.

    For hospital administrator David Steinberg, who lives in Chicago, Yamibuy is the only site where he can find his favorite Nongfu Spring jasmine tea drink. He had first come across the drink when he and his wife were in China on an adoption trip, and had tried, to no avail, to find a store that stocked the drink in the US.

    Group 5
    Yamibuy has everything. I never thought I’d find those [foods I had in China] in the US
    -
    David Steinberg, Yamibuy shopper

    He eventually found the Yamibuy platform when searching for the tea on Google, together with a few of his favorites – spicy dried tofu, dan dan noodle spices and lychee water.

    “Yamibuy has everything. I never thought I’d find those [foods I had in China] in the US,” he said.

    By the end of 2018, Yamibuy plans to expand its e-commerce business to Canada, and Zhou does not rule out the possibility of eventually offering its services in Australia and Europe.

    “We are a business without boundaries,” he said. “In these countries, Asian people share the same profile, the same education level, same household income, same background. If the customer profile stays unchanged, we can replicate our business there as well.”

    Zen Soo
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    Zen is a contributor to Inkstone. She is a technology reporter at the South China Morning Post.
    Zen Soo
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    Zen is a contributor to Inkstone. She is a technology reporter at the South China Morning Post.
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