Fashion, with its multifarious styles and price tag, is unsurprisingly the most popular category for online retail in the world. 58% of global internet users have purchased at least one product under the category.

And the Philippines is not exempt from this trend. By 2021, the country is expected to see 48.8 million Filipino shoppers partake in online fashion sales.

Chris Zhao spotted this opportunity early on and in 2008, he launched Dress.PH to offer apparel online — at a time when not even Rocket Internet’s Zalora existed.

Why the Philippines?

Before building Dress.PH, Chris was already selling clothing to the US and Europe from China but he saw that these developed markets were experiencing a slowdown as they became more competitive and customer spending was downturning.

The inspiration for Dress.PH came after a vacation in the Philippines, where Chris had to buy an overpriced swimming suit because there was no other good alternative. Back in 2007, there weren’t many channels to find affordable and fashionable clothing.

“After returning to China, I did my research on the Philippines and the shopping behavior,” said Chris. “What I found convinced me to consider Southeast Asia as the right destination for my business.”

Compared to Thailand and Indonesia, the Philippines’ low competition and shared time zone with China made the market a perfect destination.

After one year spent understanding the market, Dress.PH was born.

Importance of affordable fashion for Filipinos

“Filipino shoppers behave more or less like the Chinese but with a lower level of income. I always knew price was an integral factor in their shopping decision,” revealed Chris.

Indeed, most of the population sits in the lower end of the income spectrum according to the latest data from Euromonitor and this means prioritization of price before brand recognition.

By setting up and sourcing products directly from the manufactures in China, Chris was able to lower his operation costs and sell cheaper apparel – a philosophy that has stuck with the company for the last 10 years.

The price for the clothing on Dress.PH ranges between PHP240 – PHP1,400 or $4.80 – $28.

Dress.PH also offers a wide range of categories for casual or formal occasions with the highest price no more than PHP1,800 or $36.

Building a path to conversions

Setting up the business wasn’t the hardest part of the journey, according to Chris. His previous experience selling to the States and Europe allowed him to quickly set up operations without any significant problems.

The small Dress.PH team currently consists of three employees in Manila and seven in Beijing, including Chris. Operations are also outsourced to local service providers such as aCommerce.  

So it wasn’t operations that caused concerns, it was another factor common to other markets in Southeast Asia – customer trust.

“The market isn’t as mature as the US or China and it took a while for Filipinos to feel confident in making a purchase on our website so we created the wish list feature so they could come back to a favorite item.”

“From our internal analysis, it’s usually on the fourth visit that the conversion happens.”

Data from SimilarWeb reveals that the website has more than 86,000 monthly visitors on average and unlike other ecommerce sites, more than 65% of visitors access the site through a desktop.

Dress.PH the Philippines

Chris also shared that Dress.PH recorded 3,800 transactions on its website last month. Approximately a 4% conversion rate – which was approximately the global average for desktops in 2016.

Dress.PH the Philippines

Walking down the aisle

Another factor to consider in fashion was staying relevant to shoppers. Chris continually expanded the company’s product selection to include a larger assortment of dress styles and the latest category addition is surprising online – Wedding Dresses.

“I noticed that the price of wedding dresses in the Philippines is very expensive. The cost of an average unbranded one starts at PHP 7,000 ($140),” says Chris. “I believe we could sell it for much cheaper with the same quality.”

True to his word, Dress.PH began offering wedding dresses on the site three months ago and the featuring gowns were priced as low as PHP 2,321 or $46.50.

Dress.PH the Philippines

According to Chris, China produces 80% of all wedding dresses around the world – Dress.PH included. The company’s products take 14 days to create before they’re sent to the warehouse in Manila and sold online.

“We started with 30 designs on the website in the first month and sold five dresses that same month,” Chris added. “Right now, there are 221 designs on the website and 500 dresses were sold last month.”

An ambitious future for Dress.PH

After almost 10 years in the Philippines, Chris revealed that he’s eyeing expansion to another country mid next year – a high contender being Thailand.

“I need to do my due diligence first and visit the country to get a feel of the market. I know that competition is fierce in Thailand right now and there is also a language barrier to consider — which I didn’t experience much in the Philippines,” expressed Chris.

Chris will have his hands full in the near future as he’s planning to improve the platform’s user experience by consolidating the quality of the product pictures and adding videos. The site will also introduce a “Men’s” category next month to offer rubber and basketball shoes.

“There is a potential market here for affordable Men’s shoes and after doing research, I could probably sell it as low as PHP700, where it is around PHP1,000 online right now,” said Chris.

This small company in the Philippines definitely knows how to seize an opportunity.

Dress.PH Filipino Fashion

Chris Zhao (the third from the left) and the team of Dress.PH in Beijing.

Here’s what you should know today.

1. Adidas has nearly doubled its US sneaker market share

According to data from retail researcher NPD Group, Nike’s share of the US athletic footwear market was 34.7% last month, a dip from 35.9% in May 2016.

Adidas? Its share nearly doubled year over year, from 6.3% in May 2016 to 11.3% in May 2017.

To be sure, Nike is still the top sports apparel dog in America. It sells more shoes in the US than Adidas, plain and simple. (In 2016, Adidas had $3.6 billion in US revenue, a 24% gain; Nike did more than three times that much.)

But after a bad run of declining market share in the US from 2011 to 2015, Adidas is now steadily eating away at Nike’s dominance.

The biggest reason Adidas is on the rise is because of an industry trend that benefits the brand: casual sportswear. That refers to both apparel and sneakers, and Adidas has always been known for streetwear, or as the category is called these days, “athleisure.”

Both brands have also doubled down on their ecommerce efforts, with Nike having official online presence across the globe, and considering to sell on Amazon. Adidas also has a worldwide ecommerce presence.

Read the rest of the story here.

 

2. Philippines’ Acudeen receives $6m fintech financing deal

Early-stage fintech firm Acudeen Technologies has sealed a $6 million financing deal with Rizal Microbank, a unit of Philippine-listed Rizal Commercial Banking Corp.

The money will finance the invoices and receivables to the startup’s network of small and medium enterprises in the Philippines.

Bong Roxas, Rizal Microbank president said the biggest problem of SMEs in the country, who are mostly unbanked and underserved by banks, is how to access affordable credit. “With this partnership, we’ll be able to reach out to more MSME business operators. It is really aligned with our enhanced business model,” Roxas said.

Read the rest of the story here.

 

3. Recommended Reading: Ramadan is the holiday high season for modest fashion brands

London- and Dubai-based The Modist, a luxury e-retailer that launched this spring as a Net-a-Porter for the modest set, has noticed a similar gravitation toward fun, expressive style among its customer base during Ramadan.

“For women who celebrate it, it’s their version of the holiday season, so their shopping trends shift, and they really go all out,” says Sasha Sarokin, the company’s buying and fashion director.

Read the rest of the story here.

Here’s what you should know today.

1. Alibaba taps user data to drive growth spurt

Earlier this month, it forecast annual revenues would increase 45 to 49%, besting analysts’ consensus estimates by 10 percentage points and adding $42.25bn to its value — almost an entire Barclays bank — the following day.

“Alibaba is evolving into a big data conglomerate,” enthused Jessie Guo, analyst at Jefferies.

Alibaba’s vertically and horizontally integrated services span shopping, movies, finance and logistics, all collecting information on people’s spending, location and viewing.

Once refined, the data are fed back to merchants, who in turn can better target their goods and sell more over Alibaba’s ecommerce platforms.

At the other end, data are routed back to merchants and, in turn, manufacturers, to tell them what items are in demand. Alibaba uses predictive data ahead of its mammoth annual Singles Day shopping frenzy to let merchants know where they should be warehousing goods the day before.

Read the rest of the story here.

 

2. A timeline of JD.com’s long march into luxury and fashion

JD.com, China’s second-largest ecommerce company, just announced to the public an ambitious plan to advance its position in the flourishing luxury and fashion industry through a $397 million deal with the global luxury e-tailer Farfetch.

In recent years, with the maturing of the fashion industry in China, and rival Alibaba aggressively entering the field with strategic deals with luxury powerhouses Louis Vuitton and Burberry, JD.com’s embrace of the fashion and luxury industries was maybe only a matter of time.

In February 2017, the company created a new online channel named “JD Fashion” which sells products from big-name brands like Armani, Swarovski and Zenith. In June 2017, the company launches its “white glove” delivery service that has men in tuxedos bringing customers their orders.

Read the rest of the story here.

 

3. Visa: Thai people are using more e-payment options, less cash

A recent survey from Visa has shown that Thai people are gradually carrying less cash around, and adopting digital forms of payment as they are starting to see it as more convenient.

73% of respondents in the Visa survey has stated that they use different forms of e-payment. This covers credit cards, debit cards and mobile payments.

It was found that millennials were the group most likely to use online payments (83%), and 60% of them said that carrying around too much cash is not safe.

Visa’s PayWave contactless payment is filling this interest, and users can tap their device at supermarkets and restaurants nationwide.

Read the rest of the story here

 

Here’s what you should know today.

1. New Jakarta co-working space links government with startups

EV Hive and Jakarta’s Smart City program have launched a joint co-working space in the capital. The space, called JSCHive, will serve as a bridge between city government stakeholders and Jakarta’s burgeoning startup scene.

Jakarta Smart City is a government-backed program that bundles a number of initiatives, like open data and citizen journalism. It links up with applications like Qlue and Waze to share real-time data on traffic, emergencies, and other useful information for citizens.

“We noticed there’s not enough opportunity for startups to learn about government policies and interact with us,” said Dian Ekowati, head of communication, information technology, and statistics of the provincial government of Jakarta. It will be the bridge between the city government and startups.

Read the rest of the story here.

 

2. It’s Pinterest vs. Amazon for the future of online fashion

Pinterest and Amazon are on a collision course. On the face of it, a social media company facing off with an ecommerce giant might seem odd. But Pinterest, which appears to be struggling to justify its $12.3 billion valuation, is anxious not to be viewed as a social media company.

The platform touts two billion monthly searches and 10 billion daily “personalized recommendations.” In the 2017 edition of her influential Internet Trends report, Mary Meeker highlighted Pinterest “as the best place to browse for products to buy, when compared to Facebook, Instagram, Twitter, and Snapchat,” as summarized by Pinterest itself.

Amazon has historically struggled with fashion, but if users are willing to adopt Echo Look, the company will have direct visibility into what its users wear on a daily basis, including items they purchased elsewhere.

Who will win? Will there even be one winner? Betting on Amazon usually pays off, and that seems especially likely when you compare Pinterest’s 175 million monthly active users with Amazon’s estimated 80 million Prime members — Pinterest would need to get almost half of its users to start buying things through its service in order to even approach parity.

Read the rest of the story here.

 

3. eBay launches price matching on more than 50K items

EBay announced it will match prices against its online competitors on more than 50,000 items for U.S. buyers.

To be eligible, an item must be available on Amazon.com, BestBuy.com, Walmart.com, HomeDepot.com, Target.com, Sears.com, Wayfair.com or Jet.com. Products must also be new and unopened in retail packaging in the eBay Deals inventory.

n addition to this new price-match scheme, eBay has instituted a slew of recent changes to regain market share, including a more discovery-based home page, updates to its mobile app, a new authentication program to help protect buyers from purchases of fakes

We just think this is a way to stick our competitive advantage right out there and have no questions about why people shop on eBay and why they should,” said CEO Doug Wenig.

Read the rest of the story here.

Here’s what you should know today.

1. JD.com invests $397m into luxury marketplace Farfetch as part of a new strategic partnership

JD.com, China’s second-largest ecommerce company after Alibaba, is pumping $397 million into Farfetch, a marketplace for luxury brands, as part of a new strategic partnership.

Last year, Farfetch raised $110 million specifically to support its expansion in Asia. China, where Farfetch launched in 2014, had already become its second-largest market by the time that round was announced in May 2016.

In return, JD.com gets an important ally as it focuses on high-end retail to help it differentiate from Alibaba, which despite various anti-counterfeiting efforts is still saddled with a reputation as a haven for knockoffs.

Read the rest of the story here.

 

2. Bangkok to launch $147M digital economy fund

Thailand is set to launch a THB 5 billion (US$147 million) fund aimed at growing local startups; the estimated launch date is September of this year.

this Digital Economy Fund will serve four functions:

  1. Support development of tech companies
  2. Increase R&D efforts
  3. Support the operations of the Digital Economy Promotion Agency (DEPA)
  4. Support the expenses of the National Digital Economy Committee (NDEC)

Along with the new fund, “the DE Ministry, the Revenue Department and the Board of Investment are working on proper incentives packages to be offered to startups.”

Read the rest of the story here.

 

3.  Logistics firm LBC Express raises $50m from Crescent Point in the Philippines

LBC Express Holdings Inc, a listed courier and logistics company in the Philippines, is raising up to $50 million from Singapore-based private equity firm Crescent Point.

Crescent Point is a China, Southeast Asia and Australia focused private equity and special situations investment firm.

“The proceeds of the convertible instrument will be used to fund the growth of the business of the company, including capital expenditures and working capital,” LBC Express said in its statement.

Read the rest of the story here.

The second installment of the eIQ BRAND Series covers the quintessential sports brand, Nike. The trademark ‘swoosh’ is seen on famous basketball players, track stars and probably on your own feet. Founded by Phil Knight and his University of Oregon track coach in 1964, how did they build such a brand phenomenon?

THE HISTORY

Nike can attribute its cult-like following and 48% market share in America’s athletic footwear sector (2015) to high profile athlete sponsors across the world like basketball legends Michael Jordan and Lebron James, a stubborn founder (thank you Shoe Dog) and a well-thought out sales strategy.

Nike’s infamous “Just Do It” slogan.

Websites like StockX have banked on Nike’s popularity in the street fashion circuit by trading sneakers to make money, similarly to how shares are traded on the stock market. Michael Jordan’s line of sneakers, Air Jordans, is considered a collectors’ item and have in fact been sold for $104,000.

Source: StockX ‘s most valuable Jordan releases, 2015-2016

The company has built a global, extensive offline presence scattered across the globe from its home grounds in the US to Finland, China and Hong Kong and over the years, Nike has launched sub-brands that include Nike golf, Nike+, Air Force, Air Max, Nike Skateboarding and Nike Pro.

Nike’s latest figures stand at approximately $3.74 billion in revenue, compared to Adidas’ $877.6 million (2016).

Nike is not only famous for creating running shoes that improve performance during track & field, but also for its continuous innovation. The company’s master storytelling is still influencing shoe designs today.

“We’re connecting what we’re doing today back to Nike’s heritage,” says Dennis Reeder, Ekins training manager, under Nike.

THE INNOVATION

Nike is everywhere.

The company has a mobile app, Nike+, that works like a concierge service. Not only can users use the app to manage purchases, collect rewards points, and book spots at running events, they can also scroll through new collections on their feed.

The app also offers free standard shipping on every order, option to speak with product experts or chat live. Users of Nike+ can also reserve newly released items, and head to the local branch to make a payment.

Nike+ is soon to be available globally and handled by a team of tech entrepreneurs working out of Nike’s digital studio in New York City.

Source: Nike+

Never one to shy away from testing, the ‘Just Do It” advocates also created its own Youtube series to complement its marketing campaigns that garnered over 80 million views.

But it’s the company’s running shoes, continuously tweaked, ripped apart and rebuilt to be more impressive than the last is the prize that keeps fans coming back.

Last year, it teamed up with BBH Asia Pacific to launch an Unlimited Stadium campaign that brought light to a shoe shaped running track in Manila.

The stadium features a 200-metre running track lined with LED screens, where 30 runners at a time are invited to engage in a virtual race against avatars of themselves.

The much anticipated release of Nike VaporMax and relaunch of Nike AirMax through a Kiss My Airs offline and online campaign all drops more money into Nike’s brand equity bank.

THE STRATEGY

Nike has been doubling down on its digital efforts to fully commit to a multi-channel strategy. The company announced only a few days ago that it would slash 1,400 jobs to expand its direct to consumer sales online.

This was following March 2017, when the sportswear giant reported an 18% jump in digital sales. 2016 brought in an estimated $1.51 billion in digital sales and recorded a 49% jump in digital sales in Q1 2017.

“The future of sport will be decided by the company that obsesses the needs of the evolving consumer,” says Mark Parker, Nike Inc’s chairman, president, and CEO. “Through the Consumer Direct Offense, we’re getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever.”

Making web inventory available in stores became a priority for Nike after the retailer conducted a survey that asked shoppers who walked out without a purchase why they didn’t buy anything.

“The No. 1 reason they walked was that they couldn’t find what they were looking for,” said Christiana Shi, President of direct-to-consumer at Nike.

The solution? Give store associates mobile devices to complete transactions and help shoppers find out-of-stock items.

“We are telling them, ‘Hey, buy three sizes. Buy three colors. Ship us back what you don’t want.’ We know that if they get what they want, and they’re happy, they come back,” said Shi.

Nike is also reportedly close to selling directly on Amazon in the US. This would raise competition for brick-and-mortar sporting goods retailers, and also put pressure on rival athletic brands. Currently, Nike’s presence on Amazon is limited to third party sellers and unlicensed dealers. Through the partnership, Nike could weed out excess, discounted inventory available at the marketplace through third-party retailers and sell more full-price products through the online channel

IN SOUTHEAST ASIA

Nike’s presence in Southeast Asia is extensive, both offline in department stores, shopping malls and at flagship stores and through ecommerce across the region, solely selling through its own platform.

Nike Thailand ecommerce website

 

Last year, it teamed up with BBH Asia Pacific to launch an Unlimited Stadium campaign that brought light to a shoe shaped running track in Manila.

The stadium features a 200-metre running track lined with LED screens, where 30 runners at a time are invited to engage in a virtual race against avatars of themselves.

Nike’s shoe shaped running track

The company practices what it preaches; high performance, endurance and pushing its limits.

Nike Philippines Inc held 24% of value share within the sportswear in the Philippines in 2016.

THE FUTURE

True omni-channel retailing and digital investment are all part of Nike’s ambitious roadmap, in which the company vows to grow its ecommerce business to $7 billion by 2020.

The company has already gotten a head start on the online retail trend by pushing a ‘digitized’ shopping experience through its Nike+ app and mobile in-store touchpoints.

But for Nike to reach its ambitious goals of making ecommerce a significant part of total sales, the company must look at building awareness around itself with Gen Z, while maintaining its core character of catering to the performance of athletes and sneakerheads across the globe.