- To date, the company has succeeded by running an asset light operation
- Targets 100% of its product transactions to take place on the web before the end of 2018
SOPHIE Paris, one of Indonesia's largest names in fashion, beauty, and home living retail, announced on Feb 28, that it will take 100% of its business online before the end of 2018.
Since its inception in 1995, Sophie Paris has gained recognition as a pioneer in Indonesia’s direct-to-consumer marketing space. At a time when most brands in the local fashion game were opening brick-and-mortar shops, Sophie Paris started out as an asset-light enterprise from day one.
The company built up and mobilised a nationwide sales force of more than 250,000 individual distributors. Today, Sophie Paris ships today approximately 200,000 parcels per month in Indonesia.
The company’s new chairman Sven Mattsson from Sweden has joined the team in an active role. Mattsson is known for his 17-year tenure in leading positions with Oriflame between 1988 and 2005 -- the last five years as the CEO.
Oriflame is a Swedish cosmetics company that built its own foundation upon the same direct-to-consumer business model that Sophie Paris did. During his time as CEO, Oriflame’s shareholder value increased by 520%. Mattsson is also known for his involvement in the fast food concept “Joe and the Juice”.
Sophie Paris’s shift to online-only comes in the form of a social selling platform, which alleviates multiple pain points for users. Users can now sign up and become Sophie Paris members anywhere, anytime via mobile phone. Previously, they had to sign up manually during working hours or via one of the brand’s existing members.
Members can now view and buy all Sophie Paris products online. Previously, they could only see products from a 240-page catalogue book each month.
Going online helps Sophie Paris save money on capital expenditure, but it also provides a more seamless experience for users.
In the realm of direct-to-consumer selling, a ‘community’ refers to the members you have recruited or who have joined the programme after you did and whose sales or referrals also generate income for you as an entrepreneur. In the past, anyone who wanted to join Sophie Paris’s network had to go through a multi-step registration process.
Now, with the company’s digital platform, members can easily share referral links with one another, thus allowing new users to automatically become someone else’s community. For every sale through Sophie Paris, members can get a monetary bonus of up to 20%.
To date, Sophie Paris has paid out bonuses to its members via bank transfers. According to the company, there is a substantial cross section of Sophie Paris members who earn in average seven million rupiah (US$490) per month net from bonus payouts.
As part of Sophie Paris’s new online-only strategy, users will receive their bonuses via a specialised e-wallet on the platform. Members can check their bonuses easily and withdraw money afterward directly to their bank accounts.
All products on the platform are conceptualised by Sophie Paris’s in-house team of French designers, with goods being manufactured locally in Indonesia. These products are exclusively available on Sophie Paris’s platform, with up to 200 new SKUs being added each month.
Thanks to its internal production process, the company is also able to give 30% rewards to all of its members in the form of price discounts.
“The entrepreneurship I see in this organisation, the speed at which the team is moving, and the hunger to make the company even bigger is what got me on board. It coincides with the way I look at business myself,” explains Mattsson.
“I think we very much share the same understanding of what we can do with a company in this position. We have a shared vision of digitalisation but also about the power of having a friend -- or somebody you know and trust – to recommend products to you.”
When it comes to last mile deliveries, Sophie Paris works with 400 business centres across the nation. These business centres are managed by individuals without any investment from Sophie Paris.
The company ships its products in bulk, then the members who run the centres will send goods to end-customers in their area. Alternatively, buyers can also pick up goods themselves.
“We want to build a social shopping company, and nobody else in Indonesia is able to do this like we can because we have very social assets. We have a strong brand and a very loyal customer base, we are a real creative company, and we have an attractive product portfolio. At the end of the day, the products are what make the difference,” adds Bruno Hasson, CEO and founder of the company.
“We are a grown-up business, but right now we feel like a startup. We are very ready to transform and become a pure digital company.”
Currently, Sophie Paris’ website generates 1.5 million monthly visits, which makes it the third most popular fashion site in Indonesia in terms of traffic, the firm says. The company facilitated 80,000 online transactions in January, which was double what it achieved the month before.
In February, it expects to see an additional 40% uptick in transactions. Twenty-eight percent of the sales force is already ordering online, generating 40% of Sophie Paris’s overall business apparatus in February. The company remains confident this number can grow to 100% by the end of 2018.
When compared to other e-commerce firms in Indonesia, Sophie Paris says its number of transactions are not the largest, but its average basket size is one of the highest at more than U$50, with members ordering an average of two times per month. The average six-month LTV of any given Sophie Paris member clocks in at around US$150.
The firm has around 500 employees and 3.5 million members in Indonesia.
“I think we’re just scratching the surface of what we can do. This era in which we are evolving is very exciting. In particular we are very pleased with e-commerce traffic and conversion ratios: 1.5 million monthly visits, an average visit duration exceeding 10 minutes, 15 page views per visit, a bounce rate below 35%. This is best in class type of digital performance," says Thierry de Panafieu, managing partner at Hera Capital.
Mattsson adds, “During my time at Oriflame, I saw Sophie Paris as an admired competitor. It feels fantastic -- and to some degree like a small world -- to be sitting here at Sophie Paris. I’m ready to be part of making this journey into a global success and I’m looking forward to being thoroughly involved.”
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