If there was a manual about how to launch a successful brand from your living room, Welden’s Sandy Friesen could probably write it.
Her small and young handmade handbag company quietly generated nearly $300,000 in gross merchandise volume during a two-day live-streaming event on Alibaba’s C2C marketplace, Taobao.
The campaign last November was Welden’s first foray into China, where it had been virtually unknown to Chinese consumers before the event. That didn’t stop the Connecticut-based bag maker from becoming an instant hit, attracting 808,000 views and 4.06 million likes in the first day alone.
By the end of the two days, Welden had sold close to 1,000 bags priced from US$195 to US$595 and garnered a combined 1.7 million livestream views.
WATCH: Welden looks back at its first Taobao event.
The success of Welden’s China debut far surpassed Friesen’s expectations. The Welden co-founder explained China had not been on her company’s radar until only few months prior to the campaign.
“We were a US brand that has been trying to expand to Canada. We’ve been really just going with what we know. It’s truly amazing that it has happened so quickly, resonating so fast,” she said.
Friesen started Welden in 2015. From the start, its designs were unique, easily recognizable by their signature hexagon weave.
Listen: How small U.S. brands can succeed in China
“We wanted this very beautiful, timeless piece with a consistent DNA. We wanted a brand that when you look at it anywhere you will know it’s a Welden bag,” she said.
Across the ocean, Taobao is known for its diverse, extensive — and often peculiar — product offerings. And in the eyes of global brands trying to expand to China, it is seen as a prime platform for tapping the sales potential of the more than 500 million consumers visiting Alibaba’s platforms.
Getting onto the platform can be a daunting prospect for foreign brands unfamiliar with the Chinese language and China’s e-commerce landscape. To address this, Taobao has been helping overseas small businesses learn about opportunities available to them in the China market through events like Gateway, or enlisting the help of local agents to connect brands from the U.S., Japan, Korea, Southeast Asia, Australia and New Zealand with China distributors.
It was exactly these agents who spotted Welden last year and got Friesen to agree to feature her brand in the livestream to Chinese customers in the November campaign.
Top Buyers Come Knocking
In September, the Welden founders were approached by New York-based brand development experts and influencer duo Mark Yuan and Zoe Zhang, who both adored Welden bags at first sight and were convinced that their designs had the potential to take off in China.
The pair is among a group of globetrotting shopping agents called “Taobao buyers,” selling on the platform’s cross-border channel, Taobao Global. The channel was launched by Alibaba Group in 2007 as a low-cost, easy-to-access site that allows overseas merchants to sell into China. Now, there are over 10,000 buyers showcasing products and driving sales and brand awareness for foreign merchants. That’s expected to grow further this year.
Buyers like Yuan and Zhang might be mistaken for daigou, a Chinese term for someone who travels overseas to purchase goods for resale in China – a wholesaler. But that would be a mistake, said Chen Yingrun, operations expert at Taobao Global. Delivering more than just goods, they “discover demands from their followers firsthand and inspire people to explore new horizons, try fun things. They can inspire users’ interests and create demand,” Chen said.
“We have built a close relationship with our fan base…The relationship is so strong that we can literally tell them what to buy, instead of them telling us what to buy,” he said.
Chen said Yuan and Zhang have an online following of about 40,000 people. Among those followers, many are willing to pay upfront for products that haven’t even been produced yet, and sometimes are willing to wait up to three months to receive the special products they’ve ordered.
“It’s hard to describe our job in one sentence,” said Yuan.
Their activities range from live-streaming to showcase products to handling fulfillment to ship items to consumers or managing social media to consulting brands on the right approach for product development in the Chinese market.
Zhang and Yuan said their business And Luxe Inc. essentially serves to promote U.S. and European brands in China. After more than 10 years in the fashion industry, they are confident about their trained eye for fashion and insight into the China market.
“Welden is a very unique brand,” he said. “Over our careers, we have worked with almost 300 brands mostly from the U.S., and some from Europe. Those are [only] the brands we have purchased from and worked with. We have literally seen thousands of brands, so we know when we see something that’s special.”
Fast-tracking Product Development
Livestream viewers provide feedback in real time, allowing brands to understand their preferences and customize their products to better reflect market demands. Welden found it helpful to show sneak peeks of future products via live-streams, which gave the company live feedback from customers to inform production plans and control inventory. With the live feeds, the typical waiting period of five months to receive consumer responses on certain styles can be drastically shortened to a second.
“It’s almost every brand’s dream, this new way of retail,” said Friesen. “Retail is not dying, but it’s changing. What we’re seeing with Mark and the Alibaba platform is it’s revolutionizing our business in a smarter way, so we’re excited about that.”
Friesen learned that Chinese consumers are less likely to “play it safe” when compared to their Western counterparts, and lean toward adventurous, popping colors.
“They are making us push the envelope in terms of color, shape and functionality, so how we’re pushing the line is a little bit different, where everything has to be convertible, reusable, smaller shapes, brighter colors,” said Friesen. “We’re having much more fun in our creative process.”
“This is not an exaggeration,” Yuan added. “Each time we showcase a brand in a live show, we literally receive thousands of comments from customers on what they think about a product, why they like a product, how they wish the product could be modified. That can be valuable market research data for any brand to possess.”
It saves brands from the risk of not knowing whether a certain shape or color might work, and then sitting around unsold, as excess inventory, he added.
After tasting success on Taobao, Welden’s Friesen said her company is looking to open a branded store on Alibaba’s Tmall platform, which features more well-recognized brands.
“In terms of our strategy going global, it’s not just China, it’s Hong Kong, Macau. it’s Korea. It’s really opening our eyes to other markets…We’re not tied to the U.S., and we’re looking at it at a more global scale,” said Friesen.