It is a remarkable business model: Vestiaire Collective, founded in Paris in 2009, is a platform for reselling luxury fashion items. The company itself acts as an intermediary, connecting sellers to buyers, ensuring quality and smooth operations, and, above all, creating a worldwide community, embracing social and print media, bloggers and the local fashion scenes in over 40 countries.This article previously appeared in the Cross-Border Magazine, Edition 1, June 2016
How does it work?
Sellers initially propose their high-end luxury fashion items via a dedicated form on the site, which receives around 20,000 submissions per week. Around 30 percent are rejected. Approved products are placed on the platform. The sellers’ pictures are edited by an in-house team and, once a buyer is found, the product is sent to Paris to be checked by the company’s quality control team, making sure it is in the expected state and not a counterfeit item. During this stage, less than 5 percent are rejected. As a result of this process, 1,500 new items are added to the site every day.
– 5 million members in 40 countries
– 200 employees
– €78mn turnover in 2015
– 75% year on year growth
– average basket value 325€
-100.00 new members each month
– 680 000 Facebook fans
‘We only sell items we love’
Franck Boniface, who joined Vestiaire Collective in 2012 in order to help push the international growth, tell us he was ‘the first external piece’ added to the family of founders. “I saw back then it was a diamond, it just needed some refining,” he recalls. After a career in finance and media, Franck easily made the switch into the fashion world as a result of his curiosity. We spoke to him about the challenges, passion, and learnings of internationalisation.
How would you describe Vestiaire Collective as an e-commerce company?
“What makes us special is that we bridge three different worlds. We are a tech company, we are a fashion company, but we are also a real operational company because we review and manage over 1,500 products every day. That makes recruiting new talent interesting too. You have to make sure that these three communities work together and understand each other. I am not a fashion guy; I am a finance guy. But I love getting new insights about fashion. Being passionate and curious is very important.”
When did you realise that it was time to go international?
Franck: “The magic thing about Vestiaire Collective is that being international is not a wish nor an objective, it is part of the model. In the first place, the products we are selling go all over the planet and the brands are international themselves. Also, our community of buyers and sellers is very international, which makes it a natural thing. Some of the products are very rare. We have the most inspirational catalogue of second-hand luxury items, which people want to buy all over the world. From the first year on, it already had international traction.”
What challenges did internationalisation yield?
Franck: “There is a huge gap between having international traction and really being international. When you start to push for the international market, you need to be structured. It is definitely challenging in any market. Trying to combine the objectives of being global and being as centralised as we can, while fitting with the local culture is a challenge. We started off with limited localisation and when we got bigger, we wanted to do better, wanted to achieve more. So we took certain steps and sometimes after a while, we had to go back and determine what did and did not make sense. It is a dynamic process and the conditions are constantly changing. The most important thing is being agile.”
What is a concrete example of initial steps that were later adapted?
Franck: “A good example is the localisation of payment methods. The first thing we did was build channels to get the right payment methods in every country. In terms of localisation, this is a crucial step, but we created a monster. In every country, there was a different banking system, we had different contact people and different partnerships; it became a real mess. Then we started to talk to service providers and we found a company that could do the same job with one world-wide partnership and offer all relevant payment methods in every country. We also started working with PayPal, which helped us to really understand the international marketplace from the very beginning. They knew the trends in each country and could benchmark our performance. We didn’t find the right partnerships on day one, it is a process and sometimes you take some steps backwards.”
Vestiaire Collective has offices in Paris, New York, Berlin, London and Milan. How do you decide where a new office will be opened?
Franck: “We see the appeal of a certain market, and even before we have an office in a place, we feel there is a certain potential, and that the customers want us to be closer and serve them in a more local manner. This, for instance, happened in London. The UK was the first country where we hired people locally. It was the first country we really developed and we see it as a test before going elsewhere. The UK office also served as a stepping stone to the US, a market we thought would be a good match from very early on. We had clients from the US from the beginning. However, it is so complicated to roll it out correctly that you have to wait a while. If we could succeed in the UK, we thought we could also tackle the US.”
Are there any mistakes you made along the way?
Franck: “I truly believe that you learn most from mistakes. The trick is not making the same mistakes twice. As a start-up, you have to be very agile. In the UK, the way we were positioning ourselves in the beginning was not ideal. We have a strong French DNA, which is also a valuable brand asset. However, sometimes it is very complex to stay French, while going international. Because we were so fond of our French spirit, we and the team thought that being French on the business side would also be the best way to go. Then, we realised we had to be much more open, to adapt more. Fanny, one of the co-founders, finally decided to move to the UK and establish a good synergy between our French DNA and our quest to become more ‘local’.”
How does Vestiaire Collective work operationally and what are your first steps when launching in a new country?
Franck: “The operational side of our business is located in Paris. Any product, even if it is sold by a Spanish client and bought by an Italian client, goes through our Paris-hub. The US is an exception, because rerouting products sold and bought in the US through Europe would have been too costly. Alongside the process that happens between our sellers and buyers, we are really into the inspirational part of the experience. People are coming to us not only to buy but also to be inspired. There is a strong editorial side to our business. Our website is thus much more than just an e-commerce platform. Because of that, we needed to adapt our international expansion to what we really are. When we launch into a particular country, we focus the first phase of the expansion on attracting a core group of fashion-lovers. This group includes bloggers, editors and local influencers. Our local offices focus specifically on PR and this type of community marketing.”
You recently hired new country managers. Where are they located?
Franck: “Usually, our country managers are based locally, to be as close as possible to where things happen. The Italian country manager is based in Milan. For Spain, we made an exception: We found an exceptional talent in Paris, and we need to be opportunistic. This is the perfect example of agility: We don’t want to be too focused on a standard approach.”
How is customer service managed at Vestiaire Collective?
Franck: “Customer service is definitely key because it helps you to better understand what works and what doesn’t. In a country like the US, the service experience is completely different. Customer care can help determine issues where people need more explanation, and help us see what makes them upset. Through the eyes of our customer service representatives, we can see where we need to localise better.
We did this in many different ways. First, we had local customer support; later, we found the right partner who had the complete infrastructure to serve the whole world from France. We have two levels of customer support: Level one includes simple questions about how to place an order or how to sell a product. More complex issues related to concrete problems fall into level two. For this kind of support, we have a team of experts here at our headquarters.”
Do you have a dedicated team per country to take care of resonance on social media, including negative reviews?
Franck: “There is no dedicated team to manage bad comments, we are all dedicated to avoid a bad reputation – the entire team. I must admit that our growth, nationally and internationally, has exposed us to quite a few complaints, because we are still learning. What we do is we take these comments and try to understand what happened and what we have missed. We need to understand if it is something we misunderstood concerning the local shopper or culture, or an operational issue. Then, we have to correct our mistakes.”
Last year, you raised a substantial amount of capital to fuel international expansion. Can you comment on that?
Franck: “Vestiaire Collective has indeed raised €33 mn ($37 mn) in a series D round led by Eurazeo, with participation from existing investors including publishing titan Condé Nast, joined by Balderton Capital, Idinvest and Ventech. For us, investment makes a lot of sense at this point, because we are growing. Expanding into additional countries is a huge investment, which is why the last funding round was dedicated to international expansion. Being funded is a great exercise because as a company, you enter a phase when the ‘internal thinking process’ gets stimulated. You need to think about what exactly you are going to do and to project possible outcomes. From a strategic point of view, this is very important, because it helps you to reset your strategy. Of course, you also need the right investor. Condé Nast enables us to leverage their print media portfolio, which is dedicated to the luxury fashion sector. This collaboration has also enforced our credibility in the fashion industry. Our new investor, Eurazeo, is well known for later-stage funding. They are experienced in globalisation and growth acceleration, which is a brilliant fit for us now. Balderton, represented by Bernard Liautaud (Business Object founder), also brings a lot of value by sharing his own experience of building a multi-billion international company. Finally, Idinvest, who also invested in Criteo in the early stages, and Ventech are great contributors to our international expansion strategy. ”
The investment is also supposed to strengthen the activities in the US.
Franck: “Exactly. In the US, we have a different approach. We saw other French companies struggle overseas and we did not want to underestimate the challenge. We knew that it was complex. We have kicked off a 2-phase approach. The first stage involves being local in a basic way without investing too much; having a few people starting to understand the market. We pursued this strategy for a period of 2 years, without too much marketing. Then we found our country manager and we started a real push. We moved towards being active instead of being a market observer. Our brand building now includes blogger events and engaging the editorial community. We strive to build awareness amongst relevant, influential people. You need to get to a core group of people in order to build on a strong base.
Asia is known for its hunger for trends and luxury fashion of western making. Any aspirations?
Franck: “We are thinking about it. Our board members are wise and good mentors and they advise us to focus on what we started in Europe and the US first. In the long run, Asia is going to come. The timing just has to be right.”
Is there a special moment that you remember from this international journey that you can share with us?
Franck: “We recently had a global event with all of our 200 employees. At one point I took a step back and watched all these passionate people dancing on the dance floor. Young talent from Berlin, New York, Paris. I was proud of the team that we built and proud to be surrounded by so much international energy. That made me very happy.”