Allbirds banking on demand from millennials

San Francisco-based eco-friendly footwear company Allbirds Inc unveiled its Shanghai flagship store in April, which is the brand's first brick-and-mortar store in China as well as the first one in Asia.

Apart from the physical store, the brand's products are also available on its official Chinese website and internet giant Alibaba's e-commerce platform Tmall. The company's two signature products are sold in the stores, priced at 899 yuan ($131) and 1,099 yuan.

Allbirds was established by former New Zealand soccer player Tim Brown and biotech engineer Joey Zwillinger in 2016. The brand started with one product, a sneaker made from merino wool. One of its signature products, a high-top sneaker, is made from eucalyptus tree fiber, wool and sugar cane, responding to the company's goal of making comfortable and eco-friendly shoes.

The company now has a team of 40 people in China. Its Beijing store opened in early May. It plans to open another two stores in Chengdu, Sichuan province, and Guangzhou, Guangdong province, by the end of this year.

When it comes to target customers in China, Zwillinger said they are mainly creative types such as interior designers, artists and people in the entertainment business. Millennials, as well as entrepreneurs from tech companies and startup company owners, are expected to show a preference for their products, as is the case in other markets like the United States, Australia and New Zealand.

As a rising startup in Silicon Valley, the two founders said they had been planning to enter the Chinese market for a number of years, given its size. Although the company did not provide any forecast of growth rate in China, Brown said they are optimistic as the country's large market will take care of itself.

Statistics from the Qianzhan Industry Research Institute showed that the total value of the Chinese sneakers market increased 10.6 percent year-on-year to reach 113.4 billion yuan in 2018, making it the world's second-largest sneakers market after the US.

In 2017, Allbirds secured $17.5 million in series B funding led by US-based investor Tiger Global Management, which has invested in a number of Chinese technology companies such as online fresh food platform Meicai and online piano teaching platform VIP Peilian. Brown said one reason they chose to work with Tiger Global was to help them enter the Chinese market more smoothly.

When it comes to the possibility of cooperating with Chinese tech companies, Brown said that they hold a neutral stance so they can "work with many of them in China".

The Shanghai store is not the company's first footprint in China. Two years ago, Allbirds started to work with a factory in Shenzhen.

In October last year, Allbirds secured a series C funding round of $50 million. A Wall Street Journal article said that the company's market value was about $1.4 billion, which helped it to enter the closely watched realm of Silicon Valley unicorns, or startups valued at more than $1 billion.

Although the two founders declined to disclose any financial details, Brown confirmed that the company is making a profit. But it has no plans to go public yet.