Martin Toft Sørensen, Growing WearYouWant Into a Regional Brand | (EI#2)
WearYouWant (WYW) is Thailand’s online open marketplace platform for fashion wear. It was founded in 2011 by Scandinavian Martin Toft Sørensen and his partner Julien Chalté.
WYW stocks branded goods from stockists offline and puts them online for sale. WYW is a B2B2C business, which means their customers are both fashion brand merchants as well as people who buy clothes.
WYW recently raised a Series B investment to continue growing WYW in Thailand as well as the wider South East Asian region.
Find a niche. Unless you have a huge amount of funding with you, you will definitely need to go after something the larger players are not yet interested in. Going head to head creating a multi-brand fashion marketplace is equal tough competition. – Martin Toft Sørensen, CEO of WearYouWant
Having always been intrigued with fashion and business since an early age, Martin stumbled upon the idea of WearYouWant when he was traveling in Thailand as an exchange student.
Originally from Denmark, Martin fell in love with Thailand and decided to take advantage of the growing interest in e-commerce in the region.
Martin decided to start WearYouWant in Thailand because of its easy access to funding as well as being a better base for attracting talent.
In this interview, find out:
– The key strategies Martin thinks are essential to growing a brand in the South East Asian region
– The challenges of doing business in South East Asia
– The assumptions he made of e-commerce in South East Asia that were later proven wrong
– Advice for people who want to start their own e-commerce fashion company
– What Martin looks for in investors
– Why Martin thinks a good team is one of the key ingredients for a start-up’s success
– How Martin decided to take the plunge with WearYouWant
And more. Read on.
Business: Growing WearYouWant Regionally
Lu Wee: What are the key strategies you are going to use to increase your chances of success in every country?
Martin: Right now we’re growing WYW in Thailand. I believe it’s important to have sufficient traction and know-how on your business model before expanding. We’re still a startup and we need to focus our funds on building something sustainable before we can expand successfully.
That being said, the single most important thing is local expertise and connections. WYW business model relies on strong partnerships with local fashion and beauty distributors, as we do not buy our stock upfront. So the faster we can engage with partners, the faster we can scale our inventory and traction.
Lu Wee: WYW is a B2B2C company. What is the most valuable benefit WYW offers to the two different types of customers that keeps them coming back to WYW?
Martin: On the B2B side WYW is serving as an additional sales channel. We’re not competing against the offline players as we’re not importing our own goods like other B2C players. That gives us a good position in the market as we’re seen as a door-opener to eCommerce and not a new competitor.
On the B2C side we’re capable of getting new inventory online very fast. As soon as the distributors are receiving stock to their warehouse, we can literally start selling it. That gives us an opportunity to be first with many brands.
Lu Wee: How do people hear about WYW? What has been the most effective way to reach out to your customers?
Martin: We’re exploring several different channels; however Google and Facebook remains the largest ones when it comes to acquiring new users via paid search. Once we have established a relationship through these channels, strong EDM (Electronic Direct Mail) efforts show much better conversion. It’s all about building trust and loyalty, but that often demands that people are exposed to WYW brand from several channels.
Lu Wee: How successful have your partnerships with social media influencers in South East Asia been in reaching your goals for WYW?
Martin: Influencers are important in the trust building process. We use them both on our blog through interviews but also on other social channels hereunder Facebook and IG (Instagram). In terms of revenue, we do not see a high direct conversion, therefore they are used primarily to increase brand awareness and trust in the market.
Lu Wee: How do you find out what your users like and what they don’t?
Martin: Our own data warehouse gives us reliable information on what exactly people are interested in. We use that data for online campaigns and in the way we source for new brands. Social is used more in order to create engagement with our customers and to build loyalty.
Lu Wee: It appears like influencers and social media do not directly increase sales on the site. They are instead used for branding, which is playing the long term game in building trust. What percentage of your marketing dollars are being directed towards these efforts at the moment? Are there signs you look out for to change this percentage in the near future?
It is still a fairly low percentage of our total marketing budget that is directed towards influencers. However we are aware of the importance of trust and brand building, so I expect the amount will be higher in the future.
Lu Wee: The last we spoke in June you mentioned that Thais are still very uncomfortable with the idea of online payments and still prefer COD. Do you see this changing anytime soon? Is COD payment something you would push in WYW growths in other countries in the region?
Martin: COD remains a very important payment method. Cash is still king in South East Asia, so I believe it will take some time before we see credit card payments taking completely over like in Europe or US.
Personal: Scandinavian Doing Business in Asia
Lu Wee: What has been the biggest challenge for you in doing business in South East Asia?
Martin: The importance of local connections. Connections are always important, but as a small startup without huge funding behind you, you need someone to help you open the right doors. Until you succeed in that, it will be hard to grow your business fast.
From a more holistic perspective, you can say that the market is still very immature, hence the fairly low conversion rates compared to more developed countries. Obviously that is something we try to optimize via trust building, UX improvements, product selection faster delivery etc.
Lu Wee: What were some of the assumptions you had about doing business in SEA that were proven wrong when you began operating WYW?
Martin: I thought things would move faster, that e-commerce would count for more than 0.5% of total sales volume in 2015. However, it has taken longer time to get the right partnerships in place and well known international brands online. It’s also been more challenging to acquire new customers and build loyalty. Basically the whole eco-system surrounding e-commerce simply wasn’t ready.
That being said, now we’re starting to see steeper growth compared to the early days back in 2012 and 2013. We have great expectations for 2016.
Lu Wee: What is your advice for people who want to get started in fashion e-commerce?
Martin: Find a niche. Unless you have a huge amount of funding with you, you will definitely need to go after something the larger players are not yet interested in. Going head to head creating a multi-brand fashion marketplace is equal tough competition.
Lu Wee: What are the three key things you attribute to having achieved the level of success you have with WYW today?
Martin: Strong partnerships, a dedicated and loyal team and engaged and supportive investors. Without these 3 things we would not have been able to grow WYW to it’s current level.
Lu Wee: What qualities do you look for in an investor and why is it important?
It’s of course important that you share the same overall vision for the company. But what we’ve been very interested in is the engagement and knowledge a particular investor can bring to the table. In other words, do they have know-how from certain areas that is useful for the business? Have they made other investments within the same vertical or do they have connections that could be important for future fundraising rounds?
Lu Wee: What would you have done differently given the chance to go back in time when you first started WYW?
Martin: It’s a difficult question to be honest, because so many things are depending on each other. However, getting the right team in place from day one is essential. Then again startups wasn’t the new black back then, and furthermore the salaries we could afford to pay were not super attractive, some were even paid purely on commission.
Lu Wee: You keep emphasizing the importance of putting the right team together. What are the key things that you look for in a team member?
It very much depends on which position I’m looking for. However, passion and dedication are important. It is also essential that the person is the right fit for the team. I need to be able to see the person engaging well with the other team members. In terms of skills they need to be smart and fast learners, but they do not necessarily need 10 years of experience.
Lu Wee: What was the most expensive mistake you made with WearYouWant? What did you do to rectify it?
Martin: I’m not sure there have been one major mistake, but there has for sure been many. Then on the other hand, that’s exactly what startups are about, testing things and figuring out what works and what doesn’t. The most expensive mistake would be to be afraid of testing the unknown.
Lu Wee: What made you feel confident enough to take the plunge with WearYouWant?
Martin: Internet penetration was booming in 2011 with thai’s getting online via their smartphones and tablets. Besides that, it was completely blue ocean and nothing was really existing in the pure fashion vertical. And then Julien and I just believed in it, sometimes that’s more important than anything else. If you over analyze things you might get scared before you get started.
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