Below is a transcript of this Alicast, edited for clarity.
Julie Huang: Here on Alicast, one of the themes we like to focus on is how young brands are growing and thriving globally. Today we turn the spotlight is beautiful Senreve handbags and accessories. handcrafted in Italy and coveted by young professional women globally. Senreve was founded in just 2015 by Coral Chung. The brand, based in San Francisco, grew quickly, thanks in large part to a very smart social media strategy. Coral says almost 50% of their business now is global. And that’s impressive for a young brand. So let’s find out how they’re growing in the midst of a pandemic, and specifically how they’re building their business in China. Coral Chung, founder and CEO of Senreve. Thank you for joining us.
Coral Chung: Hi, Julie. Happy to be here.
JH: Now your personal story is very interesting. You have what I consider a perfect finance background. Wharton undergrad, Stanford Business School, stints in finance and consulting. How in the world did you make the jump to launching a handbag business?
CC: It’s a really interesting thing that on the surface, my background is highly analytical. My business training is very, as you say, traditional in a sense, but at the heart of things. I am actually a really creative person. And I’ve always been. And I think it’s one of the things that Senreve really allows me to bring forward is the creativity of building products, really creating a brand and telling that story. And all of these different facets that actually were, I would say underexplored in other aspects of my career. But I think the finance background and the business background have been tremendously helpful in terms of getting the company and the business off the ground. So it’s really a balance of left brain and right brain.
JH: What does Senreve mean? And how did you come up with the name?
CC: Senreve means ‘sense’ and ‘dream.’ So, it’s the combination of the French words for ‘sense’ and ‘dream.’ And how I came up with the name was I wanted something that represents the philosophy of sunrise, which is, it’s all about dichotomies, coexisting, it’s all about things that seem opposite and can’t be combined, being able to coexist. So when I was developing the idea for Senreve, there were so many industry leaders and traditional luxury brands that said, ‘Hey, you can’t, you can’t think about versatility and functionality and practicality with luxury and design.’ And you know, those two things just don’t coexist. But actually what I felt was really important and authentic is, for this modern woman who is so multifaceted, it has to coexist, because on the one hand, she wants to feel beautiful and look stylish and have a really great emotional connection with a handbag, which is one of the most-important products in her life.
JH: One thing I was really impressed with is you said you built your business from day one to be global. And why did you launch your business with that mindset? And do you have to do certain things with the business to ensure that’s possible?
CC: Yes, I think that is a very intentional decision. And I think it’s very authentic to Senreve. And that’s why I think companies, you know, later on in their development, when they decide, ‘oh, I need to enter the China market,’ or ‘I need to enter a market outside the U.S.,’ why they have challenges is because it wasn’t fundamentally aligned with her original vision for the company. And I think with Senreve, there’s a couple things that impacted that, I would say global mindset from the beginning. The first really has a lot to do with my own personal experience. In terms of being born in China, growing up in the US having my first job out of college, based in Hong Kong, it really set the tone for me in terms of thinking about businesses and brands and companies in a very global context. And then the second piece of it is I’m definitely a student of history.
And I really look at markets and I look at how they’ve developed and if you really look at luxury brands and how they’ve grown over time, it’s really difficult to just be a U.S.-centric company. And it’s it doesn’t make a lot of sense, because the luxury customer is very, very global. And this is a particular segment that travels significantly and experiences different things in various places around the world that are kind of the luxury capitals, if you will. So it just all kind of clicked together and made sense. And in terms of being able to execute that vision, it had a lot to do with the decisions that we made early on to focus on European luxury craftsmanship really to combine that traditional approach with a more-innovative business model from a production and design perspective. And so, yes, I would say that all of these things were quite intentional from the beginning. And as a result, we’ve been able to expand outside of the US more quickly.
JH: Covid-19 has been challenging for so many U.S.-based businesses, has a pandemic affected, sort of or accelerated Senreve’s plans to expand globally, how’s it sort of in a way, you know, impacted your business?
CC: The pandemic has impacted our business significantly. Over the past year, we’ve definitely noticed a trend towards smaller bags, as opposed to when we launched, it was really heavily focused on larger bags that could hold a laptop that was great for, you know, long-haul travel, and so forth. So there’s a lot of interesting trends on the demand side that have been changed or accelerated as a result of the pandemic. One of the things that we’ve been able to do in Asia that we really have not been able to do anywhere else, and certainly not in the U.S., is a lot of the offline marketing activities. So for example, in Hong Kong, we had a very successful pop-up over the summer. And then we had one in Shanghai and currently have one in Beijing and Hong Kong. So these types of offline activities we’ve just not been able to do in the U.S. And the pop-up over the summer attracted over 10,000 people. And that’s again, you know, something that is unique to Asia and Hong Kong, in particular, because they’ve managed the pandemic in a way that allows people to still go to shopping centers and experience a lot of these offline activities as opposed to in the U.S.
JH: Now those pop-up stores came before you joined Alibaba’s Tmall Global, which was right around September. How did you make that connection from the offline to the online? Was that deliberate?
CC: Very much so. So. I think there were a couple things that we understood about Senreve, I would say readiness for incredible growth and momentum in Asia. And we’re always very much following the demand of our community and the feedback that we get. And so, what we’ve noticed in Asia, is there’s a lot of interplay between offline and online activities. And so, especially during the pop-up that we had in Hong Kong, we also not only had tremendous foot traffic, but also saw an increase in online traffic and interest in conversion as well. So, we felt that launching on Tmall would really coincide well with some of these offline marketing activities and pop-ups that we were doing.
JH: There’s several choices you can choose when you go into China online. Why did you choose the Tmall Global platform?
CC: There were really a couple of key drivers for that. So first and foremost, I think Tmall and Tmall Global really are, I would say dominant shopping platforms where people transact. And so that was something that we got, actually a lot of feedback around and demand for was to make the shopping process more frictionless for people in China, who, actually because of the pandemic, right, have really had a hard time or are not traveling outside of China.
JH: And I know shortly after you join Tmall Global in September, then you jumped into the November 11.11 Shopping Festival, Double 11. Was that a strategic plan? And I mean, you’re a young brand going up against a lot of big brands for a very busy shopping festival. Were you worried?
CC: We felt that it was really important to test and iterate. That’s a lot of the philosophy of Senreve is around constant improvement, and really getting feedback and we have this growth mindset feedback orientation within the company. That’s what allows us to constantly innovate. So we did feel like it was important to take the plunge and try it out. And as a result, be able to get a lot of feedback to understand how we continue to improve.
JH: How did you do in 11.11? Were you, you know, sort of pleased? Did you reach your goals?
CC: We definitely exceeded our goals. Yeah, it was, it was tremendous. And it was a historic, one of the top sales performing days for us really globally. And I think, really, kudos to my team, it was very, very well-executed, and really exceeded our expectations.
JH: The Senreve customer from what I’ve seen, the US is sort of young, professional women who are cool, who don’t need sort of a bag with the labels and logos all over very plastic.
CC: Yep. Just like yourself.
JH: Oh, thank you, professional woman that I am. Is that the same consumer profile in China?
CC: It’s very similar. But I think in China, there are a few nuances. So, the first thing is we found that the consumer in China is on average younger than our average us consumer. And so this person may have actually just graduated from undergrad and, you know, just recently joined the workforce or maybe is still in grad school, and studying law or medicine, etc. So, it’s very interesting to see the age difference. And it’s a pretty substantial one, it’s about 10 years. So, the average age for a U.S. consumer for us is in the mid-30s. And in China in the mid-20s. I think the second thing that’s really interesting is, the woman in China, actually, I would say is even more ‘fashion forward’ than the U.S. consumer who is exactly as you described, she’s highly savvy and intelligent and very confident and her tastes.
JH: China is a very unique market, and you know, with its own ecosystems and set of rules, and it’s so hard to even explain it to sort of people who are sort of new and want to break into China. Can you share any learnings or takeaways since entering China so far?
CC: I think there are several different approaches to doing this. Broadly speaking, there is a more kind of decentralized approach. And there’s a more-centralized approach. And what that means is, do you really, it’s a kind of a philosophy that I think a lot of different companies struggle with, but it’s like, for Asia or China expansion, it’s very, it’s a very specific market. And as we talked about, they’re very specific platforms. And there’s quite a lot of consumer nuances. And so do you take a centralized approach and kind of just cookie cutter, apply your global marketing and, you know, kind of your centralized global initiatives and just plop it over to China, right?
Or do you have a decentralized approach where you have a team on the ground, there’s obviously a lot of coordination, but there’s a lot of ability for them to execute and be flexible and adjust as appropriate to the market and so forth. So my strong feeling is that with China, it’s really important to have that more decentralized approach. And I’ve seen situations where companies really want to have the more command and control from headquarters, which is based in the U.S. And there ends up being a lot of conflict, a lot of turnover, a lot of reboots and pivots necessary, because they’re just not close enough to things that are happening on the ground. And things move so quickly, you know, in China, but really everywhere. And so you really need to have more localized capabilities, decision making and intelligence on the ground, to be able to succeed. So that’s one thing that I feel like, is super-critical.
JH: How has Tmall and Tmall Global helped you sort of with understanding the China landscape? Do you get sort of support from them?
CC: Yeah, I think it’s been a really collaborative relationship. One of the things that I’ve been very surprised on the upside about is actually the data transparency and availability. And so, through the platform, and through our partners there, we’ve gotten a lot of interesting information about consumer behavior, you know, which cities, where we outperform, for example, that’s given us information that will help us plan our next pop-up and offline push. And so, it’s been a really great collaborative relationship. They’ve been very supportive. They’ve also raised a lot of things that we should be mindful of, for example, inventory has always been really tight for us. And I mean, we had our factory in Italy shut down for about two-and-a-half months between March and June. And that was really, really difficult from an inventory management perspective. And so of course, the folks at Tmall Global were very on top of making sure that we had available inventory in preparation for 11.11. In order to make it successfu
JH: Do you have any advice to other entrepreneurs with young brands such as yours, about going global and digital?
CC: I think it’s really important to think very carefully about what it is you’re prioritizing. For Senreve, we were always really focused on going global and the Asia market in particular. And so in a way, we designed a lot of different things about our brand our products, to be able to fit that vision. And so, I would say, it’s important to think about, ‘is that authentic?’ Right? I think some people say, ‘oh, China’s a big and attractive market, therefore, we need to grow there.’ But how do you do it? Is it actually authentic? Is that the right time? Do you have the right strategy in place? You know, what’s your philosophy around having a more decentralized approach and having an enabling a team on the ground to make decisions, and all of these things are actually fairly important to think through and have a perspective on? The other thing I would say is, it’s a significant time resource.
And I think personal investment that you have to make as a founder. So I always encourage people, before expanding to a particular region or country outside of the U.S. that they themselves have a personal deep understanding of that. So, whether they live there, or they traveled there significantly, or they have a lot of close friends and family that they can get kind of a first-degree understanding and insight around, I think that is super, super critical. It’s not enough to just read the news or look at desktop research and get kind of secondhand information, you really need to experience it for yourself.
JH: As an entrepreneur, going through something like Covid-19, the pandemic, what have you learned? You know, what’s the one sort of takeaway from this experience that we’re not quite done yet? But how has it changed you as an entrepreneur? What have you learned?
CC: I would say that the biggest learning, well, there’s two. One is, it’s really important to think about diversification. And it’s very, very hard for earlier stage company like ours, because we have very limited resources. But, you know, whether it’s a supply-chain diversification, whether it’s geographic diversification, whether it’s product assortment, diversification, it’s really, really dangerous to be, you know, single category, single product, single manufacturing supply chain. And with Covid-19, I’ve seen a lot of fellow founders struggle because they were trapped in a category. And so how do you pivot from that? It’s really hard, right? So it really seeded in me the importance of having diversification, and being able to lean on certain things, while other things were slower from a demand perspective or a supplier perspective.
The second thing that I think is a huge takeaway is, it’s really, really important to maintain a level of flexibility, because we had probably four different strategic plans, right. So at the beginning of 2020, we had a strategic plan, and then, you know, Covid hit, and then we had another strategic plan. And then, you know, there’s been a lot of political challenges, for example, in the U.S. And so, I mean, 2020 just threw a ton of curveballs. And I just realized that you can’t be so set in stone. In one plan, you really have to build out different scenarios and kind of understand like, hey, if this happens, you know, what might you do differently? And I do think like one of the most fulfilling things about going through the experience of starting a company and growing it is overcoming some of these highly unpredictable challenges. And being able to look back and say that you survived and, you know, grew out of it. I think that is extremely satisfying, personally for me.
JH: Yeah, it’s it’s definitely puts the brand to the test your business to the test. That’s for sure. That’s great advice. Coral Chung, founder and CEO of Senreve. It’s been such a personal pleasure to talk with you. I really do love your bags, and I look forward to more.