Bringing European luxury to your door

▶ Online marketplace The List is using technology and curation to make previously unavailable brands accessible to Middle East shoppers, writes Sarah Townsend

German-born Andreas Skorski, the founder of digital marketplace The List, pulls no punches in his assessment of the GCC’s luxury offer before he started his business.

“Most of the fashion and luxury goods here in the region had a 20 to 40 per cent price mark-up, which made no sense,” he tells The National.

“The value retailers provided in those beautiful malls was no greater than anywhere else – it was the same product as in Europe or elsewhere.”

He also laments the limited product variety he found in the region’s numerous luxury stores.

“Particularly for expats, there was a very Middle Eastern-driven collection. If you wanted to find something plain, with no logos or embellishments, it wasn’t so easy. The product variety was not very good or selected.”

Mr Skorski, 26, was travelling frequently from Europe to the Middle East to visit his parents working as doctors in Dubai. The more he spoke to people in the region, the more he saw his frustrations were shared by many.

During his travels, he took the opportunity to meet with luxury brands and boutiques and discovered a large number of them wanted to enter the Middle East market but were reluctant to take the financial risk of setting up a physical store, and lacked the technological expertise to operate a successful online store.

“So I had these two factors: supply on the one hand, and demand on the other,” he says.

“I thought, ‘OK, you can connect the dots here and create a platform that is basically connecting those two parties – suppliers all around the world and demand among people in the region’.”

For Mr Skorski, it was a no-brainer. Today, The List is an e-commerce website that curates a selection of luxury products including fashion, accessories, furniture and art from global boutiques to sell in the Middle East, “enabling customers to shop straight from the streets of Paris, London, Milan, New York, Moscow or Tokyo”, the company says in its marketing material.

The selection includes pieces by Gucci, Balenciaga, Saint Laurent, Rolex and Cartier, as well as up-and-coming labels such as Vetements, Off-White, Gosha Rubchinskiy, Yeezy and Fear of God, and rare vintage pieces from Louis Vuitton, Chanel, Hermes and others. Prices range from $30 for a pair of socks to almost $500,000 for a handbag.

The company works with global courier DHL Express for doorto-door delivery within 48 to 72 hours. Over the coming years, Mr Skorski aims to work with a growing number of last-mile delivery start-ups emerging in the region in response to delivery challenges such as a lack of postcodes and complicated or vague addresses.

While Mr Skorski does not reveal detailed financial figures, he says the business has seen threefold growth since it launched as an e-commerce platform in March 2017, as hundreds of new products are added to the website each week. Last month, the company raised $1.7 million in an initial seed funding round, from a mix of local and international venture capital firms it prefers not to name. It aims to achieve more than $2m in gross merchandise volume (GMV) – the total value of transactions conducted via the site – by the end of 2018 and is “on good track for that”. The founder is especially pleased with the average value of orders placed by customers, which is “more than double” the average $500 recorded by European counterparts. Customers are also typically ordering a larger number of items than European averages, he says.

In under two years, The List has come a long way from its ad-hoc beginnings. When Mr Skorski first moved to Dubai and saw the limitations of local retail, he began travelling around the world, bringing pieces back home and selling them on to his friends and other people for the same price he bought them for.

“They appreciated the better pricing and some uniqueness, because these were selected, curated pieces from Paris or New York.” He looked for a mix of high fashion, expensive products from Italy, for example, with simple luxury “that does not need to be super-expensive but is extremely unique and perhaps can only be found in New York or London.

“I did a kind of curation job there and people trusted me,” he says. “I was literally going into a boutique, saying, ‘I live in Dubai, you have a great selection of brands, I want to buy some pieces because we don’t have them there and everyone’s asking for it’.

“But in the end, after travelling back and forth, I almost never had space in my suitcase for myself – half my luggage was full of stuff for friends.”

In March 2016, Mr Skorski launched the subscription-based classifieds business that a year later would evolve to become The List. Based on his interactions with luxury retailers around the world, he set up a website enabling them to advertise pieces online and connect with prospective buyers.

The operation was run by Mr Skorski and a team of five others working from the lobby of Dubai’s Vida Downtown hotel on free Wi-Fi.

“Our new office is only next door, so we still go in to the Vida for lunch and say hi to the nice hotel staff that helped us get The List off the ground,” he says.

At that stage, Mr Skorski was financing the project with his own money, paying a skeleton team of employees who also “believed in the mission”. He declines to reveal the size of his personal investment.

The team soon realised the classifieds site was missing a crucial component: the technological facility to conduct online transactions. Retailers were connecting directly with customers via the site, but it was up to them to manage payments off-page. There was also the question of logistics: who was responsible for the payment of delivery and import duties and ensuring a smooth customer experience.

This was a clear opportunity for Mr Skorski, and The List was born the following year to fill those service gaps.

“As a customer, you need to be sure you are paying an authorised retailer and you can get your money back if there’s something wrong with the product. The retailer has pain-points, too, in estimating the duties and overseeing the delivery, so we took that off their hands,” he says.

The List fronts delivery and customs costs and arranges store pick-up the same day an order is made, or the morning after, Mr Skorski says. The return rate is less than 10 per cent. Retailers pay The List a commission of between 20 and 30 per cent per order and also contribute “a small percentage” of return and handling costs.

The focus now is on building up the technology platforms the business uses to help clients serve their customers, and make the customer journey as efficient as possible, the founder says. The money raised in the seed round will be used in particular to develop The List’s m-commerce capabilities. The Middle East has among the highest mobile penetration rates in the world, presenting huge opportunities for digital businesses. The List will also use the seed financing to open an office in Lisbon and hire 30 new staff, mainly digital engineers who can continuously develop underlying mobile technologies and analyse data to inform retail strategy. The luxury segment is increasingly targeting digitally enabled millennials with high disposable income – an expanding demographic in the Middle East and one retailers want to know more about.

Even established international brands like Louis Vuitton are creating “funky” pieces and limited editions as they seek to broaden their appeal.

“The biggest opportunity lies in m-commerce, so we are trying to build a unique product for a mobile application,” Mr Skorski says. “We like to call it a ‘mobile ecosystem’ because we have various elements – the retailers that need to understand data better, customers who want to shop in a different way, and we are building the technology required to connect those pieces. There’s a lot of new stuff we can do.”

He compares his business to “a tree, hosting various apples. We are trying to build a tree, and work with a lot of apples.”

The List has 22 staff at the moment – 17 in Dubai and the remainder in Berlin responsible for acquiring new client brands.

The planned recruitment drive would bring the total headcount to around 50 or 60 by the end of 2018, Mr Skorski says.

There are also plans for geographic expansion. The List wants to position itself more strongly in the Middle East, with Saudi Arabia a key area of focus, and promote regional brands. The site lists pieces by Bthaina, Hadid Eyewear and Hooked HKD, and during Ramadan will launch several new brands, including Amal Al Raisi, SH Studios and Baruni.

In the longer term, the Chinese market presents an opportunity, according to Mr Skorski.

“Chinese demand for European products is very high, which is why on their travels Chinese customers buy a lot of those products, and we could build that bridge digitally.”

Turning a profit is still a way off for The List, Mr Skorski says – the current focus is growth.

“We want to develop the technology that makes our site feel like home for our customers, one that understands their behaviour and knows how they shop,” he says.

I almost never had space in my suitcase for myself – half my luggage was full of stuff for friends

ANDREAS SKORSKI

Founder, The List