Source Code Capital Portfolio Company Yijiupi Merges with Zhangshangkuaixiao, Accelerating Consolidation in FMCG Industrial Internet Source Code Capital portfolio company Yijiupi has strategically merged with Zhangshangkuaixiao, marking an acceleration of industry consolidation in the FMCG industrial internet sector.

源码资本·February 11, 2020·1·4

The merger of Yijiupi and Zhangshangkuaixiao marks a new phase in the development of China's FMCG industrial internet.

Recently, Yijiupi announced a strategic merger with Zhangshangkuaixiao, the leading FMCG B2B platform in South China. Post-merger, Yijiupi will hold 100% equity in Zhangshangkuaixiao. Concurrently, following its Series D+ round from Warburg Pincus earlier this year, Yijiupi also announced a special Series D4 financing round for this merger, jointly provided by Meituan Longzhu, logistics asset management giant GLP, and existing investor Source Code Capital. LightSource Capital continued to serve as the exclusive financial advisor for this M&A transaction.

Founded in 2014, Yijiupi started as an alcohol B2B platform and rapidly evolved into a "national, full-category, full-chain empowering" FMCG industrial internet platform — one of the most representative unicorn companies in China's industrial internet sector. By 2019, Yijiupi had expanded operations to 138 cities and over 500 counties nationwide, covering 800,000 retail stores, with annual GMV reaching 20 billion RMB and leading nationwide warehouse shipment volume. Yijiupi remains committed to its mission of "making good products more affordable through technology," enhancing FMCG supply chain efficiency through digital transformation. Around its core supply chain business, the company has developed the Yijiupi warehousing and logistics platform, the Yierhui/Yijiupi retail franchise chain management system, the Weijiudai supply chain financial services, and the Yijingxiao merchant onboarding platform.

Launched in August 2016, Zhangshangkuaixiao is the largest FMCG B2B enterprise in South China, operating in 13 cities and 30 counties across Guangdong and Fujian provinces, serving 100,000 retail stores. Zhangshangkuaixiao boasts the deepest market coverage density in its regions, having built an efficient fulfillment system and strong brand service capabilities — making it a standout example among China's regional FMCG B2B players.

Wang Chaocheng, founder of Yijiupi, stated: "South China is a stronghold of the FMCG industry, and Zhangshangkuaixiao's market performance there has been deeply impressive. This acquisition is a critical move in Yijiupi's 'national, full-category' strategy, and I believe this merger will become a successful case of national platform advantages amplifying regional operational excellence. The Zhangshangkuaixiao team is exceptionally talented, with profound understanding of the FMCG sector. Their joining will also help Yijiupi attract more industrial internet talent, continuously delivering better services and creating greater value for upstream and downstream industry players." "The first time I heard Ben [Zheng Yubin] speak at a conference, he left a deep impression on me — because our understanding of the development path and value of FMCG industrial internet is remarkably aligned," said Chen Shengqiang, co-founder and COO of Yijiupi, describing his view of the merger. "First, talent integration — the high-quality core team from Zhangshangkuaixiao joining Yijiupi; second, market integration — Yijiupi will now hold dominant market share in the two developed provinces of Fujian and Guangdong; third, category integration — this will help Yijiupi explore new partnership models in beverages, the highest-frequency FMCG category."

Zheng Yubin, founder of Zhangshangkuaixiao, stated: "We firmly believe in the future of FMCG industrial internet. Since our founding, we have pursued this vision with tremendous passion, making significant strides in building efficient fulfillment systems and brand service capabilities. Through in-depth communication with Yijiupi's management team, we deeply appreciate the massive momentum generated by Yijiupi's national scale, multi-category coverage, and full-chain empowerment. The team's passion for the industry, their technological and operational iteration capabilities, and strategic resolve have been truly inspiring. This merger will allow Zhangshangkuaixiao to create value for the industry on a larger platform."

Yi Cao, founding partner of Source Code Capital, commented: "China's FMCG industrial internet is a strategic priority for us. In 2018, nearly 70% of small retail stores were already purchasing through B2B platforms, with order frequency and wallet share rising rapidly. The online migration of small-store procurement is an irreversible trend, and the FMCG market is enormous. We firmly believe that this wave will produce a new generation of national, multi-brand, multi-channel, full-chain-empowered supply chain giants. Yijiupi has rapidly emerged as the absolutely leading player in this space, and its robust financial performance and business integration momentum have become increasingly evident even as it maintains rapid growth. We look forward to this merger of two outstanding teams generating even greater momentum for industry development." Yonghua Zhu, founding partner of Meituan Longzhu, stated: "Digital transformation on the supply side is a direction we firmly believe in and support. The FMCG market exceeds 4 trillion RMB, and FMCG B2B is rapidly and irreversibly penetrating traditional distribution channels. As outstanding representatives of national and regional players respectively, the merger of Yijiupi and Zhangshangkuaixiao will accelerate the industry's digital transformation. We have strong conviction in Yijiupi team's strategic resolve and execution capabilities, and believe this merger will help them continue leveraging competitive advantages, maintaining growth momentum, and leading the industry's new development."

The development of mobile internet has propelled the rapid rise of industrial internet in China, giving birth in recent years to a cohort of vertical industry unicorns. Following a period of intense competition, the industry is entering a consolidation phase. Yijiupi's acquisition of regional leader Zhangshangkuaixiao marks a new stage in the evolution of China's FMCG industrial internet.