(Bloomberg) — Like many founders, Alex Zhou started a business out of frustration.
When he moved to the U.S. from China, Zhou quickly realized that finding his favorite chili sauce and tea would be hard. He eventually discovered an Asian market that was a two-hour drive from Kansas State University, where he studied industrial engineering. But he wasn’t satisfied and in 2013 founded Yami, an online retailer that offers imported Asian goods.
The company now sells more than 250,000 products, spanning flavored bread to acne cream. And Zhou, 35, thinks Yami can cater to a wider swath of U.S. consumers because of the rising popularity of Asian goods, as the region’s cultural influence grows thanks to K-pop music, which has loyal fans the world over, and shows like “Squid Game,” Netflix’s most popular series ever.
Zhou expects Yami to increase sales 50% this year to $300 million. The company recently raised $50 million in a series B round to expand its product lineup and supply chain, including a warehouse on the East Coast. It declined to provide a valuation. In a sign of the market’s potential, competitor Weee! — an online retailer that sells Asian and Hispanic goods in the U.S. — has taken in more than $800 million in funding and is valued at $4.1 billion, according to researcher PitchBook.
Bloomberg recently spoke with Zhou about what’s next for Yami and the Asian goods market.
Let’s start with the basics. What’s driving demand for Asian goods in the U.S.?
The overall Asian population is growing in North America, as well as the number of non-Asians who have an interest in Asian products — some are pop culture fans. And there’s been the rise of Asian food culture. So, when they get used to this Asian taste, they’re going to start looking for seasonings, chili sauce, Japanese ramen.
We carry products that you can’t easily find.
You mention pop culture boosting interest in Asian goods. Is the Netflix effect real?
We know based on our internal data that there are more and more non-Asian customers. They really love Asian pop culture — K-pop, K-drama, Japanese mangas.
Your customer base now spans Asian communities to White Americans and Latinos. How are you trying to cater to all of them?
We categorize our customers based on their behavior — what do they want? Are they deal driven? That’s one of the main areas we’re going to work on for our tech. When our consumers come to our website, they’ll be shown products they’re actually interested in.
Our Asian customers normally come to the site and know what they want. They know the brands. But many times, our non-Asian shoppers don’t. So, we also offer bundles, such as limited-edition Japan or China snack boxes.
Delivery times continue to shrink across e-commerce. How are you planning to keep up?
We have a warehouse in Los Angeles, so for L.A. and Orange counties we can deliver the same or next day. For San Diego and North California, next day. After this round, we can duplicate the delivery model to the East Coast. After we open the second warehouse, over 80% of our clients will receive packages in two days at most.
Since most of your products are imported, how are you dealing with supply chain snags?
Frankly speaking, this is all very ongoing. The price of international freight is so high. We have direct relationships with vendors in Japan, China, Korea and Southeast Asia. So that’s helped. We have our own warehouse as well as third-party partners, so we can use their inventory to fulfill orders when we experience our own shortage.
Editor’s note: This interview has been edited and condensed.
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