Alex Zhou is not only one of the youngest CEOs you’ll meet, this millennial entrepreneur is also a significant contender in the e-commerce space. His California-based company, Yamibuy, is growing by leaps and bounds and is expected to double revenues this year to $100 million. In the summer, he secured $10 million in Series A funding from GGV Capital and other venture capital firms.
And all this began with a serious case of the munchies.
While studying engineering as an international student at Kansas State University in 2007, a homesick Zhou craved the foods from his native China but couldn’t find them in local stores. He wound up travelling long distances to hunt them down.
“I used to drive more than one hour to get chili sauce, rice,” Zhou recalls.
After he graduated, he moved to Los Angeles and was astonished to see the thriving Asian American population there. Seeing the potential of a growing customer base (the U.S. Asian population has grown 72 percent since 2000), and remembering his collegiate snack attacks, he hit upon the idea of selling Asian snacks online in the United States.
In 2013, with savings and money from family, he launched Yamibuy with just 200 snacks. As the sole employee, he ordered inventory, did all the packing, mailing, and customer service. Business was slow at first, but his persistence eventually paid off.
“I don’t think I’m the first one to have this idea, but I am the first to commit to it,” Zhou says.
Customers ate it up—literally. Today, more than 650,000 customers are registered at Yamibuy, snatching up products like “UNIF 100 Chinese Sauerkraut Beef Flavor Instant Noodles,” “Weilong Kiss-Burn Chicken Flavor,” “Weilih Good Good Eat BBQ Cube Wheat Cracker,” and “Lonely God Vegetable Flavor Potato Twists.” Last year, during Singles Day, the biggest shopping period among Chinese consumers, Yamibuy broke their sales records and topped $1.5 million in sales in 2 days.
Zhou’s business philosophy is simple: listen to the customer and let them guide the direction of the company. “You have to provide value first,” he advises. “Always learn from customers what they want from you, not just what you want to be.”
When Yamibuy first began, Zhou targeted overseas students like himself, who order a lot of instant food that they could make in dorms. Then, some customers started to call in to ask for Asian cosmetics that they couldn’t find in the U.S., so he added those to the platform. Others started requesting mom and baby products, and those were added as well. Now Yamibuy offers more than 15,000 products, including snacks, beauty products, health supplements and home appliances.
Yamibuy maintains an extensive database of all customer feedback. The main customer base is first-generation Chinese immigrants, who are very familiar with Asian brands. Another portion of the customer base is second-generation Asian Americans who were born in the U.S., but are accustomed to eating Asian food that their parents made at home. Next, Zhou wants to target the mainstream, non-Asian customers who are interested in Asian culture. For instance, Zhou added Korean makeup brands to Yamibuy because Korean pop music, or K-Pop, has picked up in popularity in recent years—in fact, the U.S. now hosts the third-most K-Pop concerts in the world outside of Korea, after China and Japan.
“I know a lot of Americans who buy Korean makeup. Why is that? Because they watch K-Pop. They want to look exactly like the girl in the video,” Zhou says.
“The loyalty of Yamibuy customers is impressive, thanks in large part to the talented international team who understands their Chinese and Chinese American millennial customers," says Hans Tung, managing partner of GGV Capital.
Yamibuy's staff conducts extensive research into items that are most popular on Asian e-commerce platforms every season, in various categories. Yamibuy also started to rank their own products and uses that data to guide their product selections. Because they can purchase at high volume, they can negotiate discounts from vendors and offer products at a lower cost than in the stores.
With success, however, came a new set of challenges. With an annual growth rate of 100 percent, Zhou says it presented tremendous pressures on the workforce. “When we have more customers, we have more orders, and that’s a huge challenge for our operations,” he says. “How can we ship out all of our orders in one or two days?”
In 2015, the number of employees jumped from about 20 people to almost 100. Zhou recognized that he didn’t have experience in managing a large workforce and needed help to scale his business. He started looking for talented people and experienced executives from the outside.
”I always make sure that we get to know each other first and become friends for a while before I invite them to join my company,” Zhou says. “I believe the most important thing is that we share the same value and the same faith in our cause.”
Today, more than 300 people work at Yamibuy, most of them at the headquarters in Southern California, which houses a 200,000-square-foot warehouse. Another warehouse will be opening in New Jersey to speed up delivery to East Coast customers. He had a lot of difficulty hiring enough IT workers who spoke Chinese in Los Angeles, so he opened up a technology center in Xi’an, China. To attract other e-commerce operations experts, Yamibuy opened an office in Hangzhou, where e-commerce giant Alibaba is based.
Zhou’s next step is to take the company global. After all, the affinity for the tastes of childhood runs strong, and there are hungry Asian immigrants in Canada, Australia and Europe, as well.
“They all share the same Asian population customer profile. The model should work there too,” he says, determined to help satisfy snack attacks the world over.