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Online retail mogul talks success [China Daily: Hong Kong Edition](China Daily: Hong Kong Edition Via Acquire Media NewsEdge) The Chinese mainland is one of the major markets for online fashion retail company Yoox. China had 618 million Internet users by the end of 2013, 302 million of which shopped online. Provided to China Daily Shanghai Tang's certain something Graceful Zhang Ziyi attends Dior show Yoox's founder built success on venture capital grasped just in time and beat the dot-com bust. Now he's riding the wave in virtual China, he tells Tiffany Tan. If anyone knows the importance of timing, it is Federico Marchetti. The Italian entrepreneur established his online retail business in March 2000 after securing 1.5 million euros ($2 million) from a venture capitalist. Soon after that, the dot-com bubble burst. "If I'd started probably one month after, I wouldn't have found any money to start my own business. Impossible," Marchetti, 45, says in Beijing. He likens the experience to zooming past closing gates just before they snapped shut. But with one Internet startup after another collapsing at the time, observers were skeptical about the future of Yoox.com, which was selling end-of-season and prior-season luxury clothes at a discount. (The online fashion store Boo.com had gone bankrupt in May 2000 after devouring $135 million of venture capital in 18 months.) "I remember a call from a Dutch journalist," Marchetti says while sipping Chinese tea. "The first question was, 'Are you crazy?' And I said, 'No, I'm not crazy. I think it's gonna change the world of fashion.'" A decade and a half later, his Yoox Group has become one of the fashion world's biggest onl ine retail companies, with 1.1 million active customers. It's valued at 1.2 billion euros. Marchetti expanded the company, headquartered in Milan, by setting up Thecorner.com, which offers in-season high-end fashion, and Shoescribe.com, a site dedicated to women's footwear. Yoox.com has since added art, furniture and other design pieces to its merchandise. In 2006, Yoox also began partnering with major fashion houses in running their online stores, providing them with services that include Web development, merchandising, delivery, returns and customer service. It now has 38 "mono-brand" sites for labels such as Armani, Alexander McQueen, Balenciaga, Jil Sander and Valentino. Yoox has "proven to the world that there is indeed a market for fashion shopping online, and it is huge", says Gelati Ting, sales marketing manager at Fashionbi, a fashion market research and analysis group with headquarters in Milan. "There is a market segment that is highly interested in luxury e-shopping. "This might seem like an obvious fact, but it was a taboo a decade ago. Yoox is definitely one of the innovators. It enjoyed the first-mover advantage when the e-commerce market was much less saturated." Last year, Yoox reported delivering some 2.8 million orders in more than 100 countries, including China. The Chinese mainland is now one of its most important markets, where the average value of customer orders surpasses those in the United States and Japan - the world's other top luxury markets. In fact, the most expensive item ever sold in the company's history was purchased by a Chinese shopper from Zhejiang province in 2013, according to in-house research. The product was a Dolce & Gabbana women's leather jacket that was priced at nearly 150,000 yuan ($24,000) on Yoox.cn. Besides creating Chinese versions of some of its online stores, Yoox has strengthened its China business through localization strategies, like providing e-mail and phone customer support in Chinese and collaborating with local designers, celebrities and TV shows. It also set up a domestic logistics center from which all Chinese orders are shipped, and introduced a "butler service", enabling customers to try on purchases while a courier waits to see if the person wishes to return any items. Yoox, which entered the Chinese market in 2010, is well-placed as the world's most populous nation becomes increasingly connected to the Web. China had 618 million Internet users by the end of 2013, 302 million of which shopped online, according to the latest data from the China Internet Network Information Center. Of the country's 500 million mobile Internet users, 81 percent use their smartphones to go online. Yoox began working on its mobile platform in 2006, and this autumn plans to launch its newest mobile and tablet app for Yoox.com, which Marchetti hopes will be "revolutionary". The company also takes care of creating apps for its mono-brand stores. "From a retailing point of view, that's what we believe is gonna change the landscape," says Marchetti, who in 2012 received Italy's Leonardo Award for Innovation. At the end of 2013, Yoox saw at least 5 million store visitors, or 40 percent of the group's traffic, coming through smartphones. Despite the explosion of e-commerce worldwide, some luxury labels continue to hold out on selling online, believing the move will tarnish their image of exclusivity. Yoox's CEO says he respects that. But he adds that there should be no half-measures when it comes to doing online retail. "It's better not to do it than doing something wrong," Marchetti says. "But I don't respect the things in the middle. Because many luxury brands, they say they don't believe in the Internet, but they sell like crazy in e-commerce through other counterparts." Marchetti may be one of today's online retail gurus, but when he started few believed in his entrepreneurial vision. He also knows a bit about swimming against the tide. Shanghai Tang's certain something Graceful Zhang Ziyi attends Dior show AT A GLANCE Yoox's customers in China · They have the youngest average age among the company's customers worldwide. More than half are under 30. · China is the only market where Yoox has more male than female shoppers. At least 30 percent of the men's purchases are of women's products. · When it comes to footwear, women are drawn to high heels, while men prefer sneakers. · Chinese prefer black and purple clothing and accessories. In addition, men also like white and gold. Shanghai Tang's certain something Graceful Zhang Ziyi attends Dior show (c) 2014 China Daily Information Company. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info). |