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.
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.
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.
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.