International Buying Director
Global Fashion Group
Melanie is the international buying director for the Global Fashion Group (GFG). GFG is dedicated to bringing fashion online in emerging markets and offers brands the chance to enter the fashion ecommerce sector in highly promising economies.
Give us an overview of your business
GFG has a relatively complex business structure in that it acts as a holding group of ecommerce businesses, largely focused on emerging markets. It was founded 18 months ago but actually the real starting point goes back around five years to when Rocket Internet decided to recreate the business model that has been so successful with Zalando, but do so for emerging markets.
The fashion brands it launched in support of that initiative were Dafiti (covering Brazil, Columbia, Argentina and Chile), Namshi (Saudi, UAE, Oman, Bahrain, Qatar and Kuwait), La Moda (Russia, Ukraine, Kazakhstan and Belarus), Zalora (Indonesia, Philippines, Singapore, Malaysia, Brunei, Taiwan and Hong Kong) and the Iconic (Australia and New Zealand). That coverage gives us a total geography covering 1.9 billion people and a fashion market worth €300bn.
How is your business model structured?
Our central structure, supported by locally-executed strategies, is what sets us apart as a business. So we have central legal, finance, buying and HR services, and then local marketing, local buying, customer support and logistics teams in place for each market. Having that local capability and knowledge is absolutely fundamental to success, it’s been key to us building a strong and sustainable business.
We cover 250 cities with local final mile solutions, which sometimes have to be quite bespoke to suit the demands and challenges of the market. For example, in Russia 90% of our sales are paid for using cash-on-delivery. Our proposition includes the driver actually waiting while the customer tries on the item they have purchased, as it is such a vast country getting refunds processed efficiently can be difficult otherwise. As far as I’m aware, we are pretty unique in offering that ‘try while we wait’ service in Russia. In fact in 17 countries we offer a cash-on-delivery option; our payment offering is always tailored to the market and preferences of shoppers there. We also offer next-day delivery in every country and in Australia we offer a 3-hour delivery service in Sydney and Melbourne also.
How did you approach product assortments with so many countries to serve?
We have to look at the customer and brand strategy for each country, as each place can be very different in terms of seasonality, style and climate. In Asia for example, we go country to country as some of the differences are quite marked. The average wage in Indonesia is a lot lower than for Hong Kong, so you have to factor that into the product range you offer.
In Asia we service local Muslim and Korean brands, as well as international brands such as Ralph Lauren and Nike. About 15% of our assortment is fast-fashion, then there is a large segment of middle-tier fashion brands. We also have a strong premium brand offer but this is tailored to each market and their demographic. In Russia, we find Italian premium brands are very popular, whereas in Australia the style tends to be very contemporary and more focused on French contemporary brands like Sandro, Maje and The Kooples.
We tailor the range to each region, then rely on local teams to execute the assortment to really suit the nuances and seasonality of the markets.
Any plans for future cross-border expansion?
We are testing Jordan, even though we are already strong in the Middle East. At the moment we are probably a bit too reliant on Saudi Arabia as a route to market and having other options available just makes good business sense.
On the whole though now is not the time for us to be looking at further expansion, as we are in 24 countries already which are mostly emerging markets. Our focus is on the path to profitability at the moment, as the investment has already been made. Our business continues to record strong growth year over year and we will continue to focus our energies on that and on improving our profitability and enhancing our customer proposition to make sure that we have the right products in the right place at the right time for our customers.
Do you have any advice for people at early stages of cross-border?
You need to have local intelligence and experience, to understand the locality of the country you are trying to build a business in. What you perceive to be the brands and customer experience they want is quite often removed from the reality on the ground.
A big part of our success has been building the value chain – being able to turn things around quickly and efficiently, getting products online and available in global markets at a fast turnaround.
What can people learn from your session at the eCommerce Worldwide Summit?
We can provide a really good example of how to succeed in emerging markets. We’ve been through it and learnt the lessons. Also how to go about building a product assortment strategy for emerging markets.