Berlin-based online fashion and lifestyle retailer Lesara wants to make it easier for consumers in Europe to buy ‘direct’ from factories in Asia, thus passing on significant discounts.
However, where its model is different to a pure marketplaces like Alibaba’s consumer arm Aliexpress or Wish.com is that the German company still plays the full role of online retailer, with its own warehouses in Europe and China, as well as handling customer service and all the other facets of consumer-facing e-commerce.
That model is also arguably less scalable, given the additional staffing, inventory and logistics involved. It’s unsurprising, therefore, to see Lesara return to investors to raise Series B funding less than two years after being founded.
Leading the €15 million round is Northzone, along with co-investor Vorwerk Ventures. Existing investor Mangrove Capital also participated in this round, while Lesara has pegged the new capital for further international growth in the near future and bedding down in existing markets, which include Germany, Italy, Netherlands, Austria and Switzerland.
“In a nutshell, cross-border commerce and direct sourcing from China has been probably the biggest development in e-commerce over the past 3 years. Alibaba, Wish, Nomorerack/Choxi have all had tremendous success. The issue is that those companies operate as market places, providing a really bad customer experience,” says Lesara co-founder and CEO Roman Kirsch, who previously founded Casacanda, which he sold to Fab.com in 2012.
Kirsch cites things like 60 day delivery times, products stuck in customs, and issues relating to product quality, sizing, customer service, returns and refunds, as examples of how pure marketplaces can fail, creating what he says is an “inconsistent branding and buying experience”.
In contrast, Kirsch says Lesara has created the best of both worlds. “Great price points and quick time-to-market –- the reason why Chinese players are growing so much — paired with great customer experience that makes people actually come back”.
“On a more general note there has been very few innovations in mass market ecommerce (low price points, good value-for-money, which represents the biggest share of retail) since Amazon and eBay. Most of the innovation has happened in the high-end side of the market, such as flash sales for brands, boutique online shops etc.,” he adds.
To that end, Lesara claims 50,000 products listed on its site and is planning to expand this significantly. Kirsch says that typical customers are woman (around 75 percent) with a lower-medium income who are impulse buyers that tend to shop offline with Primark, H&M or Zara.
The draw to shop at Lesara he says is that the company can react faster to fashion trends based on the way it uses online data including “store rankings and reviews of competition, trending merchandise at networks such as Instagram or Pinterest and data from Google trends and our internal search.” That data is then aggregated and sent to Lesara’s sourcing office in China.
“There we source the product, produce the content (which means pictures, quality checks) and store it in our warehouse in 5-15 days compared to 6 months for normal fast fashion retailers,” says Kirsch.
In addition, the startup claims to be around 20 per cent cheaper. “We are cutting out middle men and sourcing directly from factories. No offline branches – instead working on a lean supply chain from source to end consumer”