E-commerce is one of the most promising businesses for the fashion industry. Alibaba\'s record-breaking IPO, which ended its first day on the stock exchange recording a 38 percent increase and a capitalisation of 231 billion dollars, is atangible example of this.
Driven by the number of different scales it can operate on, niche business models are taking hold in Europe, too. This is the case with Brandsdistribution, which operates in 170 markets, selling clothing and accessories at discounted prices to small shops, chains, factory outlets and e-commerce platforms such as Vente Privee and Privalia. The Italian company, which is a subsidiary of IDT S.p.A., is set to close 2014 with a turnover of 20 million euros. Once 50 million turnover has been reached, a stock exchange flotation is also in the future plans. FashionUnited interviewed Angelo Muratore, chairman of the company with its headquarters in Turin, to understand the potential of this market.
What are the distinguishing features of the business to business market?
Our company was founded in 2008 and the winning idea was to establish ourselves in a niche market, where there were no large competitors. Although, now there are businesses which have decided to exploit the web by selling stock, they are small and operate at local level.
How did you manage to break into 170 markets and what are your strongest points?
The first place I can say our strength lies is in our offering of designer products at very attractive prices, some of which are discounted up to 80 percent. The shopkeeper or outlet is interested in efficiently finding quality merchandise, at the right price. It hardly matters to them whether it comes from the internet or via other sources. The fact that we are online has enabled us to get ourselves known via numerous search engines. Another one of our strong points is our newsletter which is sent out in six different languages (English, French, Spanish, German and Italian) to 80,000 registered resellers. We attend our greatness business where the online culture is the most developed, such as Northern Europe.
Where does the bulk of your turnover come from?
70 percent of our turnover comes from Europe, 7-8 percent of which comes from Italy. The remaining percentage comes from the rest of the world: we are growing in the US, but we need to be really well set-up for this market, which requires large volumes of goods. In regards to the sales of merchandise, 65 percent of our turnover comes from the sale of accessories and 35 percent from clothing sales.
How are things going in your Chinese market? A few months ago you signed an agreement with a local operator, how is that working out?
Yes, last March we signed an agreement with Xiu.com, a fashion and luxury site, and we are carrying on with our expansion within the Asian market, even though China is a difficult market for us to crack because of the import duty on the products.
How do you organise your logistics?
Our logistics partner is DHL. The company takes care both of despatches and of storing the goods.
Who are your clients?
Resellers, including small ones (given that the minimum order is 200 euros), clothing chains, outlets and e-commerce sites which sell brands at discounted prices. In fact, being an international business, we put ourselves forward as an export consultant for brands which want to get themselves known in new markets or strengthen their presence in certain areas. Young designers making their entrance into the fashion industry are among our clients. Ana Lublin and Made In Italia, two own-label brands which we have launched recently, are now exported to more than 60 countries.
Would you ever diversify or expand your business, like Alibaba, which operates via several different online platforms?
Our current objective is to establish ourselves as a privileged distributor and exclusive reseller for companies which want to sell online, but do not have the expertise and their own e-commerce channel. Among the brands exclusively distributed by us are No Limits, Sparco School and Rochas shoes. We have also decided to open our marketplace to third-party resellers who will have the option of selling their designer-label stock for fifteen days on Brandsdistribution.com.