LOOKING TO THE STARS
US e-commerce fashion startup company is counting on China’s top social media influencers to tap into Chinese consumers’ online spending prowess
For three days in June, the Grumpy Pig restaurant in downtown Shanghai was transformed into a fashion space akin to the Revolve Social Club concept store on Melrose Avenue in Los Angeles.
And just like the highly exclusive members-only space, this temporary Shanghai showcase was only open to select individuals. The majority of those in attendance were China’s most popular digital influencers.
Revolve may have a rather small following on Chinese social media platforms — it has just 146,322 followers on Weibo — but China is currently the brand’s second largest market after the US with about 600,000 active users.
To Revolve co- founders Michael Mente and Mike Karanikolas, digital influencers are the key to enlarge the brand’s cult status in the country.
“This event is our very first attempt to reach out to our Chinese customers. For us, the Chinese market is even more important than the one in New York. We think the experience here will drive more online sales,” said Mente, CEO of Revolve.
“We see social revenue, which means transactions directed from social media, being 10 times larger in China than the US. In the US, Instagram is very popular but it doesn’t actually drive sales. In China, however, Weibo and WeChat directly translate to sales as customers can immediately buy Revolve products via these apps.”
Founded in 2003, Revolve is a Los Angeles-based online clothing site that has been making waves in the US e-commerce and fashion scenes. Last year, the brand sold $400 million worth of women’s apparel and it expects to make some $600 million by the end of this year.
Mente noted that in the US market, purchases on mobile devices represented just 25 percent of the total sales in 2015. In contrast, almost 50 percent of the sales in China came from such a sales medium, up from 35 percent the year before.
“The Chinese customers are really convincing us that we have to invest more in this market,” said Mente.
Revolve had in 2014 already started to focus on its China market when it made its website available in Chinese. Since the beginning of this year, the company also started to offer free shipping to the country for purchases over $100 (if the purchase is over $300, the delivery time is shorter). In March, Revolve opened its first overseas call center to cater to their Chinese customers.
With regard to their marketing and branding direction, Mente said that Revolve was all about exclusivity and championing individualism.
“Here at Revolve, we want to offer a new kind of exclusivity, one that doesn’t necessarily equate to being expensive. These days, luxury brands are not exciting any more — it’s actually easier to find Gucci products than a pair of emerging-brand jeans online,” said Mente.
“The landscape now is very different from the one in the past. We first started the company because we identified a gap between people’s desire to shop for clothes online and the lack of goods. Now, almost anything can be bought online so for us it’s all about curating fashion perspectives.”
This strategy looks to have hit the nail on the head, especially in China.
While the Chinese have in the past decade splurged on luxury products, contributing to 47 percent of the global sales at its peak, there has been sluggish growth in the industry since 2014. However, market research has discovered that the slowdown is not due to a tightening of budgets, but rather, a shift to brands and styles that are less “showy” and more individualistic.
Up to 15 percent of Revolve’s sales in China come from just eight of its nearly 600 brands available on its website. Six of these eight brands were launched in China in a span of just 12 months. According to Mente, sales in these emerging brands of the Chinese market soared by 70 percent in the first quarter of this year.
“Chinese customers are no longer just eyeing big brands and seeking to look like one another. Rather, they want to express their individual styles via their clothes. In some ways, the US or Hollywood aesthetics kind of lead the world, but it is the Chinese who are leading the world in terms of mobile shopping,” said Mente.
While he is aware of the stiff competition Revolve faces from Chinese e-commerce platforms, Mente believes that his company has a huge advantage because it is located in Los Angeles, a place that is close to the glitz and glamor of Hollywood.
“Literally, all the stars are in our neighborhood, our backyard,” said Mente before adding that American fashion model Gigi Hadid had recently worn a pair of jeans that is sold on his website.
“It’s really amazing that Chinese consumers are so savvy. They know of Gigi Hadid wearing the new jeans at almost the same time as their friends in the US. And the beauty of e-commerce is that one can have that same pair of jeans at almost the same time too,” said Mente.
No pigs, just clothes. The Grumpy Pig restaurant in Shanghai was turned into a fashion showroom for Revolve's first China event.
Revolve offers clothing from about 600 brands on its e-commerce site and the company has about 600,000 active users in China.