JollyChic, a leading Chinese cross border e-commerce platform in the Middle East, finally announced their US$65 million C+ round funding from G42, an outfit based in Abu Dhabi.
Good years, tough 2018
As probably the first big Chinese e-commerce player in Saudi Arabia, JollyChic had a good number of years, where it tackled lots of challenges, overtook local competitors, and became profitable.
However, 2018 was a tough year. Though it started the year by confirming a Sequoia-led US$100m C round, Saudi Arabia’s e-commerce market became much more competitive. In addition to Amazon-acquired Souq and PIF-backed Noon, many more Chinese players jumped into the market: Fordeal, Funmart, Ajmall, etc.
JollyChic had its own challenges as well – when you try to scale the business massively and rapidly in a market that did not have mature e-commerce, finding the talent is a major challenge. Towards the end of 2018, many became pessimistic about the unicorn’s prospects.
However, we always believed that JollyChic is probably the best among Chinese e-commerce players in the Middle East. As we put in our 2019 Middle East Predictions:
The market is still quite competitive. Amazon has finally rebranded Souq.com, as we had predicted as well. It is a test not only of business but also of endurance and investor patience.
In addition, the challenges of talent and policy remain:
The issue with talent, though, will be resolved eventually, as the sector develops and matures. It just takes time and you can only rush as much.
On the regulatory front, the newly passed Ecommerce Law of Saudi Arabia intends to put protect the shoppers.
If enforced, the law will inevitably affect some big Chinese players which often under-declare the value of their goods or send in restricted (even prohibited) items.
Although it is almost certain that the other big Chinese players will be impacted much more than JollyChic will.