iFashion to go on blogshop-shopping spree
By Benjamin Cher April 22, 2016
- Strategy includes acquiring SEA blogshops before heading for an IPO by year-end
- Recently raised S$1mil in funding from Rimu Group, currently backed by FatFish
THE online fashion space is pretty crowded and fragmented these days. You not only have a slew of marketplaces, but a horde of ‘blogshops’ too.
A blogshop is essentially a consumer retail business built on a blogging platform. The fashion e-commerce giants may be dominating the space right now, but the blogshops are still nibbling away, and many have been moderately successful.
And Singapore-based startup iFashion aims to acquire and combine such blogshops into a viable contender.
Its founders Douglas Gan and Lau Kin-Wai wanted to do something in the fashion industry but when they spoke to many blogshop owners, they discovered that many did not know how to grow their business, says iFashion Group managing director Jeneen Goh.
“There are three tiers of blogshops; a tier can comprise big blogshops like LoveBonito and MDS, which are doing perfectly okay on their own.
“Then there are those making about S$1 to S$3 million (US$750,000 to US$2.2 million) in revenue a year.
“Many of them started out with a single founder or with partners, and a lot of their success came as a surprise – a lot of them reach this certain level and they don’t know what to do next,” she says, speaking Digital News Asia (DNA) in Singapore recently.
The iFashion founders wanted to help these businesses expand and grow, as well as to take advantage of economies of scale, according to Goh.
“If you actually combine a couple of these blogshops, they can grow so much with just [the proper] economies of scale,” she says.
“They have a lot of common functions like marketing, delivery and even manufacturing and buying – they can do so much more as a group,” she adds.
The plan is to acquire some of these blogshops and merge them together, while letting them run as individual brands.
“If they need funds, we will help them raise funds, and help them grow and go regional,” says Goh.
This ‘roll-up strategy’ would allow iFashion to “grow a business quickly by acquiring other companies under one brand,” she adds.
The startup recently raised S$1 million (US$750,000) from Rimu Group to do just that, and it is backed by FatFish Internet Group, whose chief executive officer is the aforementioned Lau.
Acquisition criteria and terms
Blogshops must meet certain criteria before iFashion would consider an acquisition, according to Goh.
They need to be between three and five years old, have revenue between S$1 million and S$3 million (US$750,000 and US$2.2 million), and of course, need to be financially healthy and profit-making.
“We are also looking for passionate founders who really want to grow the business and who are not just looking for an exit,” she says.
iFashion will be looking across the region for such acquisitions, but the preference would be for those based in Singapore, for the very simple reason of physical proximity, according to Goh.
Its first acquisition was not a blogshop, however, but a company called Invade, which provides retail space for online players via pop-up stores and flea markets. The deal is already done, she adds, without disclosing any figure.
iFashion would also prefer an outright 100% acquisition, but is willing to negotiate terms depending on the target company. However, it will insist on a controlling stake, with a minimum 51% equity.
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