Frozen dumplings brand Xiao Chi Jie was launched five years ago in Bellevue, Washington, by Chinese ... [+]
Xiao Chi Jie (XCJ), a frozen soup dumplings brand that could be translated as “street food avenue,” has TikTok to thank for its recent virality.
Launched four years ago in Bellevue, Washington, by two Chinese American entrepreneurs, Caleb Wang and Jennifer Liao, as a brick-and-mortar restaurant that focused on Chinese street food, the company is now ready to transform its social media frenzy into an omnichannel business with a $10 million series A funding, amping up the competition with peer frozen dumpling makers, Fly By Jing and Laoban.
This round was recently led by Imaginary Ventures, a $515.35 million (according to PitchBook data) VC behind some of the trendiest CPG and retail brands, including Daily Harvest, Nuggs, Cann and Foxtrot. Additional investors include Shang-Chi actor Simu Liu, Goldhouse Ventures, Hyphen Capital, as well as a group of consumer and retail entrepreneurs, including Colin McCabe (Chop’t), Katrina Lake (Stitch Fix), Jason Wang (Caviar), Gabi Lewis (Magic Spoon), Scott Cutler (StockX), and Shan-lyn Ma (Zola).
The investment is expected to patch up a whitespace opportunity where the $50 billion Chinese food category has solely survived on restaurants, while it is largely missing from the grocery aisle, explained Logan Langberg, partner at Imaginary Ventures.
He believes XCJ, as an authentic Chinese cuisine provider, is able to dominate online, wholesale, and food service and ultimately becomes a staple in American households. “Excellent quality products, technical founders, vertical integration capabilities, and 300% growth just this year further underscore that belief,” Langberg said, “and we are beyond excited to partner with them.”
From Restaurant To DTC
To certain extent, XCJ was forced to pivot as a direct-to-consumer brand during 2020, when many local dim sum eateries in Seattle began shutting down due to the pandemic, yet demand for soup dumplings, which are typically not a take-out product, continued to rise. So the founding duo decided to invest in e-commerce advertising and build out a frozen supply chain so they could deliver directly to their consumers.
Maintaining the same restaurant quality for frozen dumplings has proved to be challenging from the outset when XCJ started manufacturing all its products in-house in a large capacity. “No one else is going to nerd out on things like dough-to-filling ratio, percentage of dumplings with cracks, and the variance of grams of soup in dumplings like we are,” Wang said, “and we must make the investment in our process to ensure the quality is up to our standards.”
Xiao Chi Jie has unveiled a line of frozen noodles inspired by three different Chinese regions.
XCJ’s attention to details, as small as proactively reaching out to any customers who it might believe have dumplings melted during to carrier delays, has rewarded its business bountifully: shopper requests quickly ballooned from the local Washington region to across the country. “We even had customers pack an entire cooler of our soup dumplings to fly with to another state so they could share with other friends and family,” Wang noted.
However, shipping costs from dry ice, specialized liners and such also increased dramatically as the company ramped up its production. “Supply chain efficiency is one of our most focused areas.” Wang added, “At this point, we have grown to the scale required to find large efficiencies and pass those cost savings to our customers.”
New Noodle Kits and Upcoming Rebrand
XCJ has so far sold over 13 million dumplings to more than 100,000 customers, according to the company, while its annual revenue between 2020 and 2021 has seen a fivefold increase, and is growing at a similar pace this year. The goal is to ultimately bring honestly represented Chinese food to any accessible channels in the U.S., which is why XCJ is not exclusively offering chicken and pork dumplings, or playing in DTC.
In addition to a trio set of crafted dipping sauces that were designed to pair with dumplings, XCJ also plans to unveil frozen noodle kits as its next hero product, which has been developed for nearly two years. The new line will include three region-inspired varieties: Sichuan Dan Dan noodles, Beijing sweet and salty Zha Jiang noodles — available both in ground pork and plant-based version made with Impossible Pork, as well as Shanghai savory scallion oil noodles.
Sam Perry, VP of U.S. Retail at Impossible Foods, commented: “It’s an honor to work with a dynamic brand that shares our commitment to making delicious products. XCJ puts their heart and soul into their food — you can taste it in their dumplings, which first put them on the map. These new noodle kits are no different, and Impossible Pork is an awesome addition. We think they're going to be a huge hit with consumers."
Retail is going to be a major driver for these new products, according to Wang.
“We’re not yet in retail but have been having some great inbound conversations and planning our launch partner strategy into next year,” he said. “It will allow us to create smaller pack sizes for trial versus our current 50 packs, and make the pricing even more affordable due to the elimination of frozen shipping.”
A massive revamp that involves a new brand name and packaging design is also in the works, and will better reflect the company’s growth trajectory, according to Wang. “Our company has expanded nationally, our products have broadened beyond street food, and our audience is much broader than the local Chinese population,” he stressed. “Philosophically, we need a name and brand that can encompass the stage of the company now, and where we would like to continue to grow.”
“Hopefully, Chinese food can be introduced to many more households,” Wang added, “and what may appear ‘foreign or ethnic’ food now, simply becomes, just food.”
