ZhenFund, one of the biggest angel investment funds in China, is confident that the expenditures of young consumers in the country will continue rising on items such as health foods, fitness products and designer furniture, among others. The company is expecting that this will create exciting investment opportunities, despite the fact that the broader economy is experiencing a slowdown.
Founded in 2011 by Victor Qiang and Bob Xiaoping, the Beijing-based ZhenFund invests in Chinese early-stage startups. Anna Fang, chief executive of the fund, said that digital entertainment, including virtual reality and live video streaming are some of the good and promising investment growth areas in the country.
The fund has invested in more than 150 high-growth firms including Jumei International, Meilele, Jiayuan, Ehang, LightInTheBox, Everstring, Meicai and Dayima, among others. Their investments are distributed in different sectors including mobile internet, education, e-commerce, enterprise software, and gaming.
Fang commented that investors are still optimistic about the Chinese market despite growing concerns about on low capital for early stage startups. This is also amidst slowdown of this world’s second-biggest economy in the world.
Fang said, “The theme of consumer upgrade, upgrading your lifestyle is hot. Younger people, new consumers in China post 1985, this new generation…they’re buying new things, they’re doing new things like fitness. The things they’re eating or the furniture they’re buying are interesting sectors to follow.”
Spending by young generation consumers, who are 35 years and below, in China is growing at an annual rate of 14%, according to a survey by AliResearch and The Boston Consulting Group (BCG). This rate is twice that of consumers aged above 35 years. The survey also found that by 2020, the Chinese young generation consumption will hit 53% from 2015’s 45%.
The fund is further encouraged by the live video streaming business like Periscope app of Twitter.
“This phenomenon is not just for social media, it’s really like using live broadcasting for shopping. It’s a really interesting sector that is making a lot of money. This is one innovation specifically to China that I think is quite interesting,” said Fang.
Fang also said that ZhenFund is looking into ways to invest in firms developing technologies that specifically hone in on improving China’s agriculture sector. She added that the sector has numerous opportunities. Some of these include drones used for spreading seeds, new farming methods, equipment leasing, and restaurant companies applying farm-to-table strategies.