31 Oct

VIP Plaza Helps Retailers to Deliver Past Season’s Goods Fast

by Veritrans Indonesia

1687Views

Happy Halloween all! Today is last day of October. November is in the corner. This time is about one of our merchants, VIP Plaza.

The former director of Rakuten Belanja Online, Tesong Kim, launched his flash sales site VIP Plaza back in February this year. Although Indonesia’s fashion ecommerce industry has now been dominated by Zalora and Berrybenka, but it did not stop him to enter this industry. Surprisingly, in only six months, VIP Plaza has already got some figures to show off, like 42 percent repeat orders and 2.5 million monthly pageviews.

Up until now, VIP Plaza has already partnered up with 200 fashion brands, these includes some popular brands such as Adidas, Nike, Puma, Lacoste, and Guess. According to Kim, VIP Plaza is able to partner up with those popular brand due to its capability to solve the old collections problem which fashion labels always face.

Fashion industry moves really fast. Even before the current collection is out of season, fashion brands have already launched new collections, in which it creates an inventory problem. Brands usually discards their old collections to department stores using a consignment model to create more space inside the warehouse in order to store their newest stuff. The department stores usually only want to sell that old goods in their store for a short period of time, around three to six months. After that selling period, the brands will receive revenue from the sold goods and take back the leftover items. This consignment model can solve the warehouse space problem, however it usually require quite long time for the brands to get revenue back from the consigned product lines.

VIP Plaza are able to shorten that consignment period, so it only holds the goods for two to three weeks, which is much less time than a department store. If VIP Plaza receives the goods today, they will do a photo shoot for the products on the next day and they will post the collections on their website on the day after at 10am and they usually put a limited offer such as 10-day discounts to attract buyers. After the selling period ends, VIP Plaza will transfer the generated revenue and return the leftover clothing to the brand. All of these activities are done by VIP Plaza team which now has already reached 75 persons.

Another VIP Plaza’s key strategy to compete with other fashion ecommerce players in the country is by delivering new collections every day. They post new fashion items daily at 10am with up to 80 percent discounts and their loyal customers enthusiastically anticipating new products at around the same time. Currently, VIP Plaza has approximately 200 to 300 product lines available, and their peak traffic comes in between 10am to 11am daily due to this system.

After receiving seed funding from CyberAgent Ventures, VIP Plaza team are able to grow from 75 personnel to 120 by the end of the year. “Every three days we hire one new employee,” said Kim. After only selling women’s fashion in the last few months, VIP Plaza has now expanded into men’s clothing and other categories such as beauty and cosmetics, as well as home furnishings in the near future.

Kim has already rented a 3,000-square-meter building for their new warehouse. Those two strategy is used in order to make VIP Plaza as the number one online discount retailer in Southeast Asia.