Deals | Marketer Wuxiang Cloud Raises Tens of Millions of RMB, Explores Data-Driven Marketing

Wuxiang Cloud is a CRM for the vertical retail industry, as well as a form of marketing automation.

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Deals | Marketer Wuxiang Cloud Raises Tens of Millions of RMB, Explores Data-Driven Marketing

Writer: Xu Ning

Retail-data-based marketer Wuxiang Cloud (舞象云) recently raised tens of millions of RMB in Pre-Series A round funding led by YeePay and Xinze Venture Capital with strategic participation from QFPay. Next, Wuxiang Cloud plans to strengthen product R&D and customer applications.

Wuxiang Cloud provides retail brands, such as apparel, food, maternal and child, and glasses brands, with marketing SaaS services based on membership data, based on three tiers of logic:

  • Tier 1: member management, which can be understood as social customer relationship management (CRM). Wuxiang Cloud helps enterprises establish WeChat-based membership card systems and integrate their existing membership data into them.
  • Tier 2: integration of data and channels. Wuxiang Cloud can integrate enterprises’ fragmented systems and put their existing data together to deliver greater benefits. First, the availability of more data enables more precise customer profiling and more effective marketing. More importantly, with the integration of online and offline data, enterprises can solve a series of supply chain problems including coordinating the management of sales and inventories.
  • Tier 3: facilitation of the joint brand marketing. An example is offering a food coupon to an apparel customer.
screenshot from Wuxiang Cloud website.

Overall, Wuxiang Cloud can be understood as customer relationship management service for the vertical retail industry. It is also a form of marketing automation, extending from DMP to membership marketing to supply chain management.

The reason why “membership” is emphasized is, according to Pu Jiandong, founder and CEO of Wuxiang Cloud, that “based on experience, mature retail brands strive to derive more than 85% of their sales from physical retail, with contribution from online channels such as Tmall and JD not exceeding 15%.

Otherwise, not only do they have less bargaining power in rent rate, but a small visitor traffic will also harm their brands. Additionally, many brands confined to the online space can barely make any money”.

It merits pointing out that while omnichannel is not an entirely new idea, it did not gain traction before, with its previous applications being confined to helping brands set up online stores which were eventually abandoned due to the lack of customers. In contrast, the new membership marketing focuses on physical retail.

However, there are also some constraints to consider, such as the regional distributorship model widely adopted by brands, where individual distributors are not willing to share their data, which causes products to be out of stock in one outlet but overstocked in another.

Pu Jiandong said that while this will not change for a while in the retail sector, Wuxiang Cloud can provide services for distributors as well as brands.

Alibaba, which has massive online shopping data, has also been attracted to this market and recently invested in retail CRM company iTrigger, founded by Ethan Yu, former Global Vice President at Oracle and former Vice President at Alibaba. Pu Jiandong said that the market is still in the stage of educating customers.

According to Pu Jiandong, the biggest challenge lies in upending the existing management model of enterprises.

For example, the sales people of many domestic brands, due to KPI considerations, don’t like to see customers shopping at other branches or their website, much less asking customers to scan a QR code to sign up as members. This will be a challenge for the new system. Efforts will be made to push for progress in this regard, he said.

Pu Jiandong also disclosed that the customers of Wuxiang Cloud are mostly brands which had had a digital transformation agenda but failed to deliver satisfactory results in their previous attempts. Apparel brand Hotwind, for example, only had 500,000 followers online, but after turning to Wuxiang Cloud, that number rose to 14 million.

Image credit to 123rf.com.cn.

Wuxiang Cloud adopts the SaaS model based on hybrid data deployment. Its solution charges a basic service fee of RMB50,000-100,000 a year based on the number of branches, in addition to charging for some value-added marketing services.

It has served hundreds of enterprise customers, including apparel brands Hotwind and C Banner, food brands VV Group and Jiujiuya, and the glasses company, Best, among many others.

Wuxiang Cloud currently has a team of fewer than 50 members. Founder and CEO Pu Jiandong, a former decorated employee at IBM, has 15 years of experience in consulting on government and business informatization, financial payment, and e-commerce. He founded Wuxiang Cloud in 2014 with his co-founder who is also an experienced entrepreneur, sales team building, and project management.

Also on this race track is EZR which recently received an investment from Tencent. The general understanding of this market is that the competitors are not very differentiated from one another and that competition remains focused on customer acquisition and effectiveness of continuous service.