RIDING THE EXPORT WAVES
SWITCH KITES’ WINNING EXPORT MODEL
If you're looking for a lesson in speed to market – look no further than Jacob Kajavala and Ralph von Brause's Switch Kites. By giving the ‘middle-man' the flick and deploying some 500 ‘Team Riders' (expert kite surfers that act as brand ambassadors) worldwide, the company has gone from a standing start in June 2011 to three percent of global sales by the end of 2013, and sales in 95 countries. Three percent may not sound much, but Jacob says on many of the beaches of France and Italy, for example, Switch Kites is already the dominant brand.
Kiteboarding – if you've never tried it – combines wakeboarding, windsurfing, surfing and paragliding. It's an extreme sport which demands the highest standard of equipment.
Jacob and his brother Daniel have been windsurfing and surfing for decades and took up kitesurfing ten years ago. “Daniel's extremely skilled at it,” says Jacob, “and he introduced me to Ralph back in 2009.”
Ralph, as it turns out, had moved to New Zealand in 2008 to raise a family. With a marketing and engineering background, he has also been a keen kitesurfer since its genesis.
Ralph was marketing a brand of kiteboard from a struggling US company when he and Jacob got together. They initially considered buying the American company, but then decided to set up Switch Kites from scratch.
What's more, by eliminating the middle-men (distributors and retailers) with a ‘direct to consumer' business model, they could cut 40 to 50 percent off normal retail prices, without sacrificing quality. As far as the two co-founders could tell, nobody else had the same business model.
Starting from a clean sheet of paper, within a year they had designers on board, a manufacturer in China, third-party warehouses in Hong Kong, Europe and New Zealand, and the supply chain humming.
Price points are not enough on their own – the goal is to be one of the top three trusted brands in
Switch Kites' global competition represents around 18 brands, mostly sold through retail stores. Central to Switch Kites operation is the 500 or so Team Riders, whom buyers can access through the website, and can arrange to meet at local beaches to trial the kitesurfing equipment.
In their first year of business Jacob and Ralph also enlisted New Zealand's top kitesurfer, Marc Jacobs, and sponsored him on the world circuit – initially on an unbranded kite.
This was a deliberate move to encourage speculation amongst the world's online kitesurfing community, says Jacob. The strategy worked, with the Kiwi kitesurfer catching the eye of influential people within the industry.
Also part of the start-up team was aeronautical engineer and designer Bill Hansen, and the world's best wave rider Felix Pivec.
To cut a long story short, Marc Jacobs is now ranked number two in the world and won the latest round of the World Cup – all on Switch Kites.
From zero to world hero
Jacob is understandably stoked at the progress of the business. “To think we started off completely flat-footed with a brand nobody had heard of. Now we market a top quality, recognised global kiteboard brand and kitesurfers can buy them anywhere in the world at up to half the price of retail brands.
“By having a global focus from day one we've kind of defied the laws of gravity,” he laughs. “We now have 5,500 registered customers who trust the brand, our price points, and the quality of the product. All these people identify with the Switch Kites brand and, to be honest, I find that very humbling.”
Switch Kites' marketing strategy has been all around online visibility and reach. The brand has the most Facebook friends in the market segment, for example, and there is a lot of online activity around video, blogging and social media. Switch Kites videos are particularly well received and Jacob says they have plans to treble the size of their video production team to better cover the world.
In terms of market coverage, Jacob reports steady growth in the New Zealand and Australian markets (New Zealand represents eight percent of Switch Kites global sales) – but their biggest markets are currently the US, France, Italy, Germany and Spain.
It's still early days, but Jacob says they've learnt many valuable lessons in their export journey, and are still learning. “Price points are not enough on their own – the goal is to be one of the top three trusted brands in the world.” He believes their unique direct sales business model provides a solid foundation for generating genuine trust and reliability.
On the drawing board for Switch Kites is a special laboratory where they'll be able to test kitesurfing equipment to destruction in a scientific setting. Jacob sees this as vital for buyers wanting to compare the performance of their gear against the competition's. So “watch this space” he says.
Of course, such rapid growth in the world's markets has resulted in some heavy online criticism through the retail distribution network, or what Jacob refers to as “the machine”.
“We're regarded as a rebel brand, but that resonates well in particular countries and cultures,” he says. “Seeing our customers defending Switch Kites online is truly gratifying. Many admit that they could only afford to take up kitesurfing because of our pricing model.”