ECONSPEAK: A Journal of Advances in Management IT & Social Sciences, Vol. 7, Issue 1, January 2017Impact Factor 5.132 ISSN: (2231-4571)
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STRATEGIC ISSUES & LEADERSHIP CHALLENGES OF FASHIONVALET: AN ONLINE FASHION ENTERPRISE NurulAmiraNajwaChePauzi Li Jisheng YasminYusof M.S.B. Siddiq UniversitiTun Abdul Razak
ABSTRACT: The main purpose of this study is to analyze the strategic implementation of FashionValet as an online fashion enterprise. Biographies of the founders, Fadza and Vivy, the background of the company as well as that of Malaysia’s fashion industry were overviewed to sketch out the pathways that FashionValet has gone through from its genesis stage till now as a significant player in the highly competitive fashion industry of Malaysia. Moreover, the strategic issues and challenges faced by FashionValet were examined to offer a comprehensive view of the practices and lessons deployed by the company. Hindrances, such as those of experiencing lack of capital, searching unique identity and exemplary measures of talent management were scrutinized. As main competitors of FashionValet, Zalora and Poplook were accessed to evaluate the intensity of competition, the company is passing through. Thirdly, strategies implemented by FashionValet were exhibited to demonstrate how the company responded to the challenges of tough competition. The study concluded by exploring FashionValet’s next strategic moves and critiquing key factors which have contributed to the success of the company.
Key Words: Online Fashion Industry, FashionValet, Competitive Environment, Strategic Leadership, Entrepreneurial Leadership, Strategic Entrepreneurship. CASE PERSPECTIVE: This case has been developed as a basis for academic discussion for exemplifying the issues and perspectives of managing, leading and strategizing rather than to illustrate either effective or ineffective handling of any business or management situation. It is based on the information publicly available through company reports, brochures, pamphlets, leaflets, newspapers, magazines, websites, or other such material. It should not be viewed as a typical business case, but rather an An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Included in the International Indexing Directories
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ECONSPEAK: A Journal of Advances in Management IT & Social Sciences, Vol. 7, Issue 1, January 2017Impact Factor 5.132 ISSN: (2231-4571)
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insightful and comprehensive elucidation of what we expect the students of a management program to understand, appreciate and demonstrate when they review, analyze, and discuss a highly competitive environment from the standpoints of leaders of a corporate enterprise. MALAYSIAN FASHION INDUSTRY: In Malaysia, the revenue in the Fashion segment amounted to US$116 million for the year 2016. The revenue is expected to show an annual growth rate of 12.3% resulting a market volume of US$208 million in 2021. The market’s largest segment is ‘clothing’ with a market volume of US$84 million. From a global comparison perspective, most of the revenue is generated in China with US$125,799 million in 2016 (Statista, 2016). The trend to shop online has definitely risen in the past few years in the Asian countries, especially in Malaysia. Even though Malaysians are currently active in online shopping, the amount of the total transactions is lower as compared to the entire retail industry. Online retail sales only accounts for less than 2.0% of total retail sales in Malaysia (Marketing Magazine, 2016). Today, lots of physical retailers in Malaysia offer a virtual shopping experience while many online retailers are setting up brick and mortar stores. However, based on the current situation here in Malaysia, online shopping still has a long way to go to replace physical stores. Back to 1980s, Malaysia was strong in the apparel industry as it was established as a contract manufacturer of some of the high-end global brands like Guess, GAP, Adidas, Nike, Burberry, Polo, and Ralph Lauren. As the industry developed, the value chain has moved up from a mere ‘Original Equipment Manufacturer’ producer to own design and brand supplier. Malaysia is an Islamic country. So, it is able to cater to the demand of Islamic fashion wear by providing fashionable and functional Islamic apparels. Today, Malaysia fashion industry has gained international recognition for quality, reliability and prompt delivery of a myriad and ever changing range of fashionable apparels. Fashion industry, just like any other industry, has many challenges nowadays. The sustainability is obviously one of them. Hence, it is crucial for all the fashion entrepreneurs to create a sustainable fashion to remain relevant in this competitive market. OVERVIEW OF FASHIONVALET: Today, online shopping activity is not something rare. Anyone can sell and buy goods or services via the Internet. However, that was not the case six years ago. Back in 2010, the consumers still preferred a brick and mortar store to purchase their needs and wants. FashionValet was the first to successfully manage an online fashion store serving as a marketplace where several shops and local designers come together. FashionValet is an online fashion retailer that was launched in November
An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Included in the International Indexing Directories
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ECONSPEAK: A Journal of Advances in Management IT & Social Sciences, Vol. 7, Issue 1, January 2017Impact Factor 5.132 ISSN: (2231-4571)
www.skirec.org Email Id:
[email protected]
2010 with only 10 designer local brands, and a three-man team with an initial capital of RM100K. Six years later, the company has 120 employees and has more than 500 brands across Southeast Asia, and offices in Kuala Lumpur, Singapore, and Jakarta. FashionValet is the idea generated by a husband and wife tag team, FadzarudinAnuar and VivyYusof. FashionValet proudly positions itself as Malaysia’s first and hottest online fashion store that aims at bringing the latest fashion trends to the customer’s doorstep. FashionValetfocusses on promoting Malaysia’s homegrown brands and designers as well as products from rest of the South East Asia online. FashionValet’s Motto is ‘click to your door’, which means that with just one click, you will get the product, the next day, right in front of your door. They also emphasize that they are all about having fun with fashion. After six years in this e-commerce fashion industry, they have gained enormous popularity by establishing a niche, targeting the fashion savvy ladies who prefer quality and premium clothing over purely price conscious pieces. FashionValet is known for providing exclusive and premium service. The success story of FashionValet has been such a phenomenon, not only in Malaysia, but also in Indonesia, Singapore and Brunei Darussalam. So, how can they be so widely successful in such a short amount of time? Part of it may come from the support of the legion of groundbreaking and very talented designers behind them. Lots of these designers have personally gone to Indonesia, Singapore and even Brunei, to show their support for the brand, as well as the customers. FashionValet has really built a bridge for both designers and customers. Like any other business, FashionValet did not start off with overwhelming support from designers, but they held on to their vision and belief in the designers they had. Nonetheless, nothing comes easy especially in business. To be a FashionValet today, they faced countless issues and challenges during last six years’ journey. FashionValet was initially inspired by the online shopping trend that was the founders’ routine when they were in London. When they returned to Malaysia in 2010, they realized that Malaysia still has not developed the e-commerce industry. They got disheartened during a shopping trip, driving from shop to shop, in heavy traffic under the rain. It was that kind of aggravation that triggered the idea of bringing online shopping to Malaysia. Therefore, they started to approach the local designers, requesting them to create ready-to-wear pieces for FashionValet. FashionValet basically introduced the idea because ready-to-wear for designers was not that big at that time. Then, they realized that most of the local fashion designers having difficulties to reach the mass market and developing a solid customer base. Hence, FashionValet was founded to encourage Malaysians towards enhancing their consumer purchasing habits, and at the same time promoting the local fashion designers. In that inspired moment, with whatever little savings they had as a
An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Included in the International Indexing Directories
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ECONSPEAK: A Journal of Advances in Management IT & Social Sciences, Vol. 7, Issue 1, January 2017Impact Factor 5.132 ISSN: (2231-4571)
www.skirec.org Email Id:
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capital, and limited knowledge of running an online business, with no background in e-commerce or fashion, the duo had to do everything from scratch with their strong drive and determination to produce FashionValet. FashionValet carries a lot of Asian designer labels. Thus, they are targeting the more premium customers because their products’ price on average is quite high compared to others. They decided to stick with this identity because they wanted to give only the best quality products for their clients. FashionValet has a specific team that will monitor the quality of their products. Furthermore, to sustain the standard of their offerings, there are some important elements that they consider which are consistency, quality, price, and the background of the fashion designers. But, FashionValet still encourages and fully supports any new talent wanting to establish its name in Malaysia’s fashion industry. COLLABORATION: FashionValet has collaborated with major Malaysian designers such as Mimpikita, INNAI and CalaQisya. They even collaborated with celebrity SchaAlyahya and Nora Danish. With this many successful collaborations under their belt, FashionValet has taken up another challenge this time, with an Indonesia brand, Noona in 2015. A force to be reckoned with, Noona is incredibly popular with Indonesians, and it has sold out each time that it has been featured on FashionValet. The latest exclusive collection, ‘Noona