Investment Analysis (6) — StyleWe, affordable designer outfit for the new middle class

StyleWe (www.stylewe.com)
Stylewe is a cross-border B2C ecommerce platform with integrated manufacturing, marketing, and delivery featuring global independent fashion designers. It was founded in 2015 and raised a $2M seed round from
Lenovo LeFund.

Driven by mobile, online sales in the US are expected to increase 56% reaching $523bn in the next five years. Research has shown that higher income online shoppers are more interested in buying something hard to find elsewhere.

Stylewe targets growing middle-class female customers between the ages of 30–50 with an average annual income of $60,000 — in contrast with Wish.com and LightInTheBox on the low end, and Farfetch on the high end. The average order size, $170, has increased significantly since the company started, and fits well with need and consumption power of its target customers.

Stylewe has an experienced management team. Founder & CEO Xingjian Yang has more than 10-year experience in cross-border ecommerce, including as founder of Tidebuy, the first wedding dress crossborder B2C company in China.

The marketing strategy is to help designers build up their brands primarily through social media (Facebook, Snapchat), particularly by recommendations from celebrities and fashion bloggers. These efforts successfully retain valuable designers on the platform.

In 11 months of operation, StyleWe has made impressive traction:

400+ licensed designer brands, 300,000+ registered users, and 150,000+ active users.
Monthly GMV exceeding $8M. Vertical integration drives revenue share with designers of over 50%. Delivery is $10/order for 8–10 day delivery and is expected to decrease with scaling.
High customer retention rate: ~30% web and ~60% mobile bolstered by high quality products, responsive customer service, and flash sale model.
Lenovo will support Stylewe with its cloud service and supply chain resources. A Lenovo VP will serve as Stylewe’s chief design advisor

By 2016Q1, Stylewe reached ~$48M annual revenue. With steady demand and improving operational efficiency, it has the potential to reach $100M annual revenue in 2 years.

Source:
CEO interview
http://www.baijingapp.com/article/6984
http://www.uplier.com/xqfs/5515.html