Xiachufang, the Artsy Recipe Community, Wants to Become an E-Commerce Company. How Will It Do It? | Founders Speak

But is there still room for one online store to stand apart from the rest?

If you are a longtime Xiachufang user, your first visit to its office may disappoint you a little. In a newly finished office tower on Beijing's Fifth Ring Road, about 50 employees sit in rows of desks. Apart from the cookware and ingredients on a shelf by the entrance, the plain interior gives little hint of a company known for its gentle, "small and fresh" style.

It was not always like this. Before the move in April, the team worked somewhere very different. "When we were in that big villa in Huilongguan, colleagues often cooked with these utensils and we ate together," says a veteran Xiachufang employee as she shows off the dining area. "Now this space is just where the e-commerce team takes photos."

Only the display shelf at the entrance shows that this is a food company

The reason for the change: four years after its founding, Xiachufang has started doing e-commerce in earnest.

"We moved here mainly because we ran out of seats. Our headcount went from a little over 20 to more than 50, and we simply couldn't fit," Wang Xusheng, Xiachufang's founder and CEO, told QDaily in the new office.

Now this office of about 700 square meters is nearly full too, and Xiachufang is still hiring.

"Besides customer service, which is the most stretched, as you can see, what we lack most is engineers," Wang Xusheng says. "A lot of problems still need technology to solve them."

Most of these pressing problems come from the e-commerce business Xiachufang formally launched last October.

At the bottom of the app's home page sits a new "Marketplace" tab. It has little to do with the recipes or the food creators; it is a largely separate section.

The Marketplace is a new, separate channel in the Xiachufang app

The Marketplace displays and sells "anything to do with eating." Thousands of products, from ingredients and snacks to cookware and kitchen appliances, go on sale only after a dedicated team has reviewed them.

Tap in and you see recommendation headings in Xiachufang's typical voice, such as "The Flavor of Love Research Institute" and "The Mason Jars You All Love." Or you can scroll straight down through products shown in carefully shot photos.

As on any other shopping site, users put what they want in a cart, enter a delivery address and pay. After that, all that is left is to wait for the courier to knock.

The selection may not look large, but counted by product, Xiachufang is already a mid-sized e-commerce platform. "Including what's in internal testing and not yet released, we have more than 3,000 products, but fewer than 4,000," Wang Xusheng says.

From Artsy Recipes to Artsy E-Commerce

Before founding Xiachufang, Wang Xusheng spent two and a half years designing products at Douban, the interest-based community site. He left Douban in 2011 and started his company with the Xiachufang food blog. Abei, Douban's founder, said of him: "It's in his character, down to the bone."

Xiachufang's domain name is several years older than the company. In 2006, Wang Xusheng lived in a military compound and stayed home on weekends; going out to eat meant a long walk. While teaching himself to cook, he noticed that people needed a way to search for recipes.

That was when he registered xiachufang.com.

From its launch in 2011, Xiachufang struck people as "artsy," and that helped it quickly win a crowd of users who came over from Douban. On launch day, the site drew 30,000 visits.

People who have followed Xiachufang since then may remember the food blog run by its own team, which emailed subscribers a Xiachufang weekly every week. Each email took its theme from the season, usually a couplet of poetry about food.

The same two lines, changed weekly, also filled the blank space between the site's navigation bar and its content.

In the early days, the tagline on Xiachufang's website changed every week

At the start of autumn, for example, it read: "Of all the Jiangnan Augusts, autumn is best, when water-chestnut seeds are round as pearls." In November came a winter line: "Don't say that all is over once the guest has gone; the navel orange still carries the fragrance of Du Fu's verse." And at the Start of Spring, the featured line became: "On the second day it is Start of Spring, the seventh day is Renri; platters of greens and cakes, each fresh in its season."

"At the beginning, Xiachufang was like a village. Or say you want to call on a hundred people: let's go and found a village together. As the one making the call, you have to tell the people you think are like you what kind of place you want to build. So you have to shout out the slogan," Wang Xusheng says. He saw those taglines as examples that told users how Xiachufang differed from other food websites, from other villages.

As the user base grew, however, Wang Xusheng decided to stop updating the taglines that had given Xiachufang its original artsy air. One reason was a shortage of hands: users were arriving much faster than the team had expected.

Some on the team opposed the decision. "The few girls who ran operations were especially unhappy," Wang Xusheng told QDaily. "But we had very few people and a great deal to maintain."

The main reason, though, was how Xiachufang saw itself. The blog and the taglines answered the question of "how our first users find us and understand us." Just as a rough village slowly fills with settlers and builds up its roads and wells, Xiachufang chose to let users speak for themselves and let the official voice fade into the background.

Today, the line on Xiachufang's home page, "Who came from mountains, lakes and seas, yet is confined to day and night, kitchen and love," came to the team while they were writing code and listening to Douban Radio. It is a lyric by the band Omnipotent Youth Society. It fills the gap between the navigation bar and the content, and it has been Xiachufang's slogan ever since.

Perhaps a tagline that no longer changes every week also signals a sharper focus on running "a business" rather than "doing something artsy."

All of Xiachufang's content is now produced by its users. Rather than "a media outlet," Wang Xusheng prefers to call Xiachufang "a connection": as a recipe tool, it is a place where people who can cook teach people who cannot.

As an e-commerce business, Xiachufang is a connector as well. "It connects merchants who supply ingredients with people who need them. Our job is to vet and select products and to set the rules," Wang Xusheng says.

Three Attempts at E-Commerce

Xiachufang first tried e-commerce in 2012, when it put content made with e-commerce partners on its site. In every recipe, for example, the seasonings in the ingredient list became shopping links; users who clicked one were sent to an e-commerce platform to buy it.

The feature was simple and took less than a week to build and launch.

But it did not work. The data showed that most users still bought their seasonings offline. At the time, 99% of users who finished reading a recipe went to a supermarket. "Back then, people just weren't in the habit of going online to buy soy sauce," Wang Xusheng says.

Habit aside, the experiment may also have failed on user experience. It relied only on public data interfaces from Yihaodian and Tmall. Xiachufang accounts were not linked to the shopping accounts, so after following a link users had to log in to a separate account on a web page. And paying online from a computer three years ago was far clumsier than tapping six digits into a phone today.

"It brought us maybe a few dozen yuan a day," Wang Xusheng says. He no longer remembers exactly when the feature was taken down.

A year after that first experiment, Xiachufang also tried delivering fresh vegetables straight from organic farms to users' kitchens. The first five partner farms were around Beijing, and Xiachufang acted mainly as a marketing platform and a source of traffic.

This new channel, called "Youdiantian" (A Bit of Field), was not a big effort either. Only Wang Xusheng and one engineer worked on it, and it was quietly shut down a few months after launch.

The Marketplace is Xiachufang's latest attempt at e-commerce, and in team, investment and scale it is the most serious one yet.

At the start of this year, Wang Xusheng announced publicly that e-commerce would be the most important plan for the second half of the year. As CEO, he has largely stopped handling day-to-day management and spends more of his energy on problems the team "has never run into before." For a long time to come, those problems are likely to center on the new e-commerce business.

Xiachufang set up a dedicated e-commerce team of 12. Apart from the department head, all 11 are "Marketplace buyers," who select and review products and deal with merchants. Counting customer service, the team is close to 20 people, two-fifths of Xiachufang's current staff.

Some of the first merchants on Xiachufang were businesses the team already knew, or ones recommended by core users. As the range of categories grew, the buyers began reaching out on their own in categories users liked, and reviewing merchants who applied through the sign-up channel.

The Marketplace now covers ingredients, food, cookware and kitchen appliances. San Shu, head of Xiachufang's e-commerce team, told QDaily that 280 merchants have joined. They include large fresh-food e-commerce companies such as Sam's Club, Yiguo and Tiantian Fruit, as well as small sellers such as "Xiaonong Shouyi" and "Mr. Luosifen" that sell just one or a few items.

A merchant who wants to sell in the Marketplace must send its products to Xiachufang, where the Marketplace buyers review them, drawing on their own experience with food to judge the quality of ingredients and food products.

Pointing to the assorted products on the office display shelf, Lin Xiaoduo of the marketing department told QDaily that many of the product photos users see in the Marketplace were reshot by the e-commerce team.

Before a product is promoted widely, that is, "before more strangers see it," it first goes through a beta test with core users in the "Love to Try" channel. Only users whose Xiachufang community points pass a certain level can browse and buy "Love to Try" products. If feedback at this stage is poor, the product never appears in the Marketplace.

Next: Becoming a Successful E-Commerce Company

Xiachufang is already a successful community. On its third try at e-commerce, the question it now faces is how to become a successful online retailer.

In July, Xiachufang announced it had raised US$30 million, and straight away held a three-day foodie festival called "717 Big Market, Big Luck." The date 717 (qi yi qi) sounds like chi yi chi, "have a bite."

Handmade peanut candy for just 7.17 yuan, a juicer for 717 yuan, a yogurt maker at about 30% of its usual price... These "foodie perks," priced around 7/17, all appeared in Xiachufang's Marketplace on July 17. Ten days before the sale began, Xiachufang had teamed up with Smzdm (What's Worth Buying) and others to spread Marketplace red envelopes on WeChat.

Xiachufang's new office looks very busy

During the two-plus hours QDaily spent there, the busiest people in the office were six women at a row of desks near the door. They are the e-commerce team's customer service staff, working their computers while on the phone to check order status for the customers on the line.

Three days had passed since Xiachufang's "7/17" Marketplace sale, and these staff had been working round-the-clock shifts for more than ten days straight. "Actually, for the past few days our whole office has been doing customer service," Wang Xusheng told QDaily. Calls chasing deliveries and reporting problem orders were still pouring in, more than the dedicated customer service staff could handle alone.

With this promotion, Xiachufang wanted "to tell users who see Xiachufang only as a recipe tool, and those who haven't heard of Xiachufang yet, that we are more than a recipe website."

Over the three days, sales slightly beat the e-commerce team's target of 100,000 orders, ending at 120,000. Thanks to the exposure from the "7/17" sale, the Xiachufang Marketplace took in 13 million yuan in July. In the eight months before that, its total sales came to only 10 million yuan.

By the standard of Xiachufang's own past experiments, July's figure is quite good. But for an e-commerce company, especially one offering subsidies this large, 120,000 orders in three days is not an impressive number, all the more so for a product with tens of millions of users like Xiachufang.

"The number of people who look up recipes and buy ingredients online hasn't hit explosive growth yet," Wang Xusheng says when asked how the new US$30 million will be spent. "For Xiachufang, its bigger value is that it frees us from worrying about the future. We won't spend it on advertising at scale."

For now, Xiachufang hopes to lend the brand image it has built over the years to vouch for the merchants on its platform. As the most common job title on the e-commerce team, "Marketplace buyer," suggests, Xiachufang looks more like a buyer acting for users than a seller selling to them directly.

Having grown out of a recipe community, Xiachufang's biggest advantage over its e-commerce rivals is its content and its community. Yet by keeping its ingredient lists apart from its store, Xiachufang is not making the best use of that content.

Users have to leave the recipe page, go to the Marketplace and type in the ingredients again before they can order

Ever since its first Android version launched in September 2011, Xiachufang's mobile app has had a "shopping list" feature. While reading a recipe, users can drop the ingredients for a dish they want to cook straight into the "shopping list," then use the list to gather what they need.

The feature has since been renamed "Vegetable Basket." But on a phone's small screen, the Marketplace stands on its own. You cannot order the ingredients in your Vegetable Basket directly.

For a regular user of Xiachufang's recipes who wants to shop by recipe, it is actually easier to take Xiachufang's list and buy the ingredients on another e-commerce site.

That is plainly not the best way to get users shopping on Xiachufang.

Asked why Xiachufang has not linked its recipes and its store this time, Wang Xusheng explained that its users are scattered across the country, even around the world. "On the demand side, things aren't standardized. Users in different places need different ingredients, and the supply side can't yet match them one to one. I think it's a question of how mature the supply-side market is."

Although it raised US$30 million in venture capital only in July, Xiachufang does not seem to plan to take on the supply-side challenge right now, and has chosen an easier road. "We will definitely connect the two," Wang Xusheng says. "It's only a question of how and when."

Yet competition in selling food online has never been more brutal.

Once it steps into food e-commerce, Xiachufang's rivals are no longer recipe communities such as Douguo Meishi and Meishijie, but far tougher fresh-food e-commerce companies. This is not a new market that Xiachufang has just discovered. Giants have been piling in one after another, and the fight is fierce.

Benlai Life, which also sells food with an artsy touch and has just celebrated its third anniversary, built a new 12,000-square-meter warehouse in North China for this year's "7/17" promotion.

In May, Tiantian Fruit announced a US$70 million (about 430 million yuan) Series C round led by JD.com, and it too ran a "7/17 Fresh Food Party."

Unlike Xiachufang with its platform approach, Tiantian Fruit offers few categories; since its founding it has launched only 200-odd. Yet on July 17, cherries alone sold 300,000 orders in half a day. Over the whole of July, Tiantian Fruit spent more than 30 million yuan on subsidies and discounts.

Meanwhile giants such as JD.com, Tmall and Amazon have recently rushed into fresh food through investments and strategic partnerships.

"Xiachufang right now is more like a small European town that hasn't reached its heyday," Wang Xusheng says, comparing Xiachufang to a city. But against rivals charging into the market with huge sums of capital, a heyday may be a necessity.