(Pictured left to right) Paul Alger, Aimé Fundani and Alexander Otto at ECD Global London.
At the ECD Global London, Paul Alger from the UK Fashion & Textile Association (UKFTA) and Aimé Fundani, Head of International Marketplace at Trendyol, addressed the exciting and at the same time complicated topic of internationalization in the fashion industry.
The ECD panel of experts dealt with the question of how the industry is changing in concrete terms and how these findings can be used to exploit the full potential of digitization. Fittingly, the panel took place in dynamic and inspiring London, which has become the center of the international fashion industry in recent years. Overall, online sales of clothing, shoes, handbags and accessories are expected to account for almost a third of e-commerce post-pandemic – account for sales in the UK.
Let’s start from scratch: global expansion is attractive. Where can your business develop best if you have already successfully expanded it in your own country? In other countries of course! Many brands, retailers and online shops are excited by the idea of global distribution, international trade and the possibilities of global expansion. New and established fashion brands are striving to expand beyond their own country and seize the opportunity to sell their products worldwide. Unfortunately, the current market conditions are proving to be challenging not only for large companies but also for small brands. More importantly, real change comes with new obstacles and changing factors to consider
Here are five things to consider before internationalizing:
1 Why not start locally first?
Everyone wants to make it big globally and quickly, but it also makes sense to start small or locally first. Trendyol is a good example of this. In 2010, the company started its private fashion labels in Turkey before even considering entering new regions. In their own country, they have been able to flexibly control their production costs, exploring their own market first and pioneering more efficient methods of shipping products within the EU. True to the motto “There is strength in stillness”, Trendyol has put more than seven billion products online since it was founded and has teamed up with Tradebyte to manage its trade centrally using a single piece of software.
2. Have you analyzed the demand in your target market?
Opening up new markets is not an easy task. A brand that resonates well in the home market may not resonate with the target market. Paul Alger recalls, “In the good old days, a brand would design a clothing line and sell the collection.” A retailer or marketplace would then launch it and that’s it. Whether it was a new brand or an established one, getting online was easy. UKFTA’s Alger points out that many factors have complicated logistics and trade between the UK and the EU. Any new brand must now be distributed through a variety of channels. While this all sounds great, it could be difficult for smaller, newer brands with little or no seed capital to implement. But there is good news too: thanks to the latest developments in social media, smaller retailers can refresh their brand image and try out services to explore new markets.
3. Do you think about your customers in your activities?
At the beginning of an internationalization strategy, one should focus on a specific country in order to achieve sustainable and steady growth. Brands can break into a new, unexplored market and thrive on a sustainable basis, but maybe it’s time to get back to basics. Aimé suggests that any brand of any size should take the step towards being more transparent with their customers. By educating your international customers about your products, they will also be present in markets that may previously have required a localization strategy. Transparency thus offers a practical approach for digital retail in volatile times. It sounds so banal to tell the customer “what their product is, what it is made of, how it is made and how they can get it in their country,” explained Aimé. Paul added, “Wholesale brands shouldn’t undermine the contributors like distributors and retailers who lead the way.” With unpredictability being the norm today, it’s time to create more transparent business relationships.
4. Supply chains create a domino effect
We are constantly striving to optimize our supply chain in terms of speed and costs. It’s no surprise that due to the Russian-Ukrainian crisis, gas and energy costs are rising rapidly, causing us to spend more and make poorer decisions. Aimé suggests that we should perhaps also consider the environmental aspect. You may be able to save money through production, logistics and manufacturing, but this may have an impact on the end user or other countries along your route. Have you ever thought about how you can avoid unnecessary waste and carbon emissions that are destroying certain regions and basically the whole world? Let’s delve a little deeper into the topic. Where do we draw the line in manufacturing? For example, does it make sense to send everything to China because that means flexibility and low general costs? Or should you produce closer to home to ensure better quality control? The latter could prove to be more costly due to ever-increasing economic demand.
5. Make your marketing strategy a priority
They have a market, for some it’s passive income, and the EPR does most of the hard work. There’s a lot of money to be made. But do you reinvest this profit in opening up new markets? It’s about making more informed decisions about your digital strategy and harnessing the power of marketing to increase your reach and drive traffic. International markets must also be taken into account, for example when translating the web shop, data processing, legal notices and terms and conditions.
You also need to develop a new, country-specific localization strategy and offer additional services, e.g. B. Customer Services and Shipping. You may also need another IT system, including ERP and CRM. Aimé recommends that a goal should be to work with the multi-brands, e-commerce site, own store and of course the marketplace to reach new customers. With consumer behavior evolving at breakneck speed, nothing is more important than a regularly updated website and up-to-date content on your online store that reflects local and global trends. Investing in a marketing strategy (no matter the budget) can accelerate ecommerce business growth.
6. The complexity of EU and UK customs and export regulations
The inevitable impact of Brexit, as well as the aftermath of the Ukraine-Russia conflict and the cost of inflation, have led to a steady increase in production costs and excessive complexity in the general rules governing trade.
The EU markets are extremely strict when it comes to the details of import-export regulations. Countries like Spain, Italy and the surrounding area check every bill of lading, shipping form and logistic guideline to be able to import or export goods from the UK. UK-based companies are now forced to invest in infrastructure and logistics to gain access to the EU at all, rather than using their capital to build their platform or run marketing campaigns. Paul explains: “For the UK, the main supply chain within the EU has become more expensive and complicated. Although the US, an important market, along with Korea, responds well to luxury goods from London, hopes that Russia and Ukraine (currently excellent markets for Europe) would embrace British brands have been dashed. As for the rules governing trade between the countries of the European Union, the relations between the individual countries have become a sensitive issue due to political and economic decisions.”
There are a variety of out-of-the-norm markets to explore. There is money to be made in transnational markets, no doubt about that. Getting it right isn’t a race, it’s a marathon. There is much to consider before taking any action. It’s also important to remain optimistic during difficult times. In times of global challenges, there is always a chance of success.
Can you see it here the entire panel discussion of the experts
You can find more trends and topics in the ECD expert interviews.
Written by David Juarez Schmidt