CLSA bets on China e-commerce

Hong Kong-based CLSA Capital Partners’ investment in Azoya is its second in the e-commerce sector, following a $10m investment in India’s Holisol Logistics in 2015.

CLSA Capital Partners, the alternative asset management arm of Hong Kong-based brokerage CLSA, has made an investment in Chinese e-commerce solutions company Azoya, according to a statement.

Financial terms were not disclosed but CLSA structured the transaction through ARIA Investment Partners IV, its $128 million, 2013-vintage pan-Asian growth equity fund focused on consumer-driven businesses.

Capital from ARIA Investment Partners IV is invested mainly in China, India, South-East Asia, South Korea and Taiwan, with a typical ticket size of between $10 million to $60 million per deal, as well as a possible co-investment of up to $100 million.

The GE Pension Plan and the University of Washington are previous investors in CLSA ARIA funds, according to PEI data.

Azoya is the firm’s second deal by ARIA IV in e-commerce, following a $10 million investment in Indian logistics company Holisol Logistics in December 2015.

Commenting on the transaction, Miranda Tang, managing director at CLSA, said: “We have been searching actively for companies with a sustainable model to leverage the exponential growth of Asia’s e-commerce sector. It gives us great pleasure to invest in Azoya which now extends our footprint in this sector into the world’s two most populated countries, China and India.”

Azoya is a Shenzhen-headquartered e-commerce solutions company dedicated to the Chinese market. Among its clients are German online pharmacy brand Bodyguard Apotheke and European beauty retailer Feelunique, and French women apparel company La Redoute.

“Riding on the increase in disposable income, consumption upgrades, and substantial developments in global logistics, cross-border trade has been growing rapidly among Chinese e-shoppers. While it is a competitive sector, Azoya has demonstrated its in-depth local market knowledge and a thorough understanding of overseas retailers,” Tang added.

According to Alex Huang and Don Zhao, co-founders of Azoya, the company will tap into CLSA’s resources in the fast-consumer and retail industries, to expedite its growth and in the cross-border e-commerce space.

Research by the Boston Consulting Group and Aliresearch, Alibaba’s research arm, found that by 2020 e-commerce as a retail channel will drive 42 percent of total consumption growth in China, with 90 percent of that growth coming from mobile e-commerce. Demand for premium goods and services such as healthy food, education and travel – rather than daily necessities – will also accelerate.

CLSA has more than $3 billion under management across private equity and real estate funds. The firm has offices in Singapore, Tokyo and Hong Kong.