Case 3: PE firm

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Context of the study

Our client is a multi-million-dollar private equity fund which was investigating for a potential investment in a fitness machines company in China. They wanted us to conduct due diligence in order to assess whether the company was a good fit for their portfolio.

Steps of the study

The goal of this study was to perform store-checks and qualitative interviews in order to assess the state of the market, giving tools for an investment decision.

Phase 1: Preliminary phase

In this preliminary phase, we recruited projects assistants briefed by our consultants and designed appropriate and relevant questionnaires for the interviews as well as grids to guide the store-checks.

Phase 2: Store-checks and sales interviews

In this phase of the project, our consultants performed an extensive store checks, checking not only 30 stores in Shanghai and Beijing but also online retail mainly on e-commerce websites such as Taobao or 360buy. At the same time, during the store-checks, our consultants interviewed the sales persons in order to get information about the popularity of the machines, the frequency of the purchases, etc.

Phase 3: Qualitative interviews

For the qualitative interviews, our consultants’ targets were the professionals using fitness machines. Fitness centers were localized in Beijing and Shanghai. Given the high density of fitness centers in those two cities, we were able to perform 50 interviews of fitness centers’ workers.

Phase 4: Analysis and synthesis

Based on the analysis of the store-checks and the interviews, our consultants produced a final report including the answers about the health of the company, its reputation on the market and its forecast evolution. These precious information would help our client plan their strategic decision carefully as they now have insights on their potential portfolio company. To know more : Private equity’s love affair with China Study of potential Daxue Group venture advisory Beijing