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Grand designs

Written by Adam Pescod on Wednesday, 03 July 2013. Posted in Online, Sales & Marketing

E-commerce design giant Fab has proven how a foray into Europe can bring a multitude of riches

Grand designs

Europe is usually the first port of call for a burgeoning business geared towards international expansion. Before even beginning to consider the challenge of cracking the astronomical American market, it pays to test the water – so to speak – by making waves on this side of the pond. However, there is a certain design company that doesn’t live by these rules. Based in New York, you would have thought that Fab already had enough on its plate seeking Stateside success from the offset. However, such was the ambition of its founders, Fab’s first European foray came after only six months and a year and a half later, it definitely isn’t looking back.

Indeed, you would probably have to be a caveman not to comprehend that our planet has been shrinking over the course of the last two decades. Technology has brought people and enterprise closer together than ever before. Consumers from all corners of the globe have access to products and services that previously they wouldn’t, and they can access them whenever, wherever and however they desire. Moreover, the consumer has the ability to make some significant noise – positive or negative – about their purchase, sharing their buying experience with millions through the magic of social media. E-commerce is undoubtedly here to stay.

It’s safe to say that Fab has tapped into this trend rather successfully. Launched by lifelong friends Jason Goldberg and Bradford Shellhammer in June 2011, it has rapidly become the world’s leading e-commerce design destination, showcasing and selling bespoke products from a host of independent designers at accessible prices. Through a strong reliance on mobile and ‘social’ commerce, Fab has managed to amass a fervent fan base at quite an astonishing rate in the space of just two years.

Putting things in perspective, Fab had accrued 1.5 million members by the end of 2011, and that figure had risen to six million seven months later. It took Facebook close to a year to accrue a mere one million members, whereas Twitter and Pinterest had to wait two years to hit that marker. Fab accomplished this in five months, and now has an impressive 13 million members spanning 28 countries. In order to understand this meteoric growth, two other statistics prove quite helpful. The first is that 50% of Fab members emerge from ‘social sharing’; it is said that on average, there is a tweet about Fab every 30 seconds. Secondly, 35% of sales on a typical working day come via a mobile device, and this can reach as high as 50% at weekends and on public holidays. It is thus little surprise that Fab claims to be leading the charge on mobile and social commerce, considering an average e-commerce firm will see 5-10% of sales arrive via mobile.

Where then does Fab go from here? Well, there can be little doubt that it has its attention firmly fixed on Europe, where both design and e-commerce appear to enjoy equivalent levels of popularity, more so in fact than in Fab’s American homeland. While the USA was a natural starting-point for the design giant, Fab was eyeing global dominance from the offset and Europe was its primary target.

The appointment of Maria Molland as chief European officer last September was certainly a signal of intent. It also acted as a wake-up call to those aspiring entrepreneurs who tend to pin all of their expansion dreams on an American adventure.

Molland explains that Germany was of particular interest to Fab in the early days, and that this was in part driven by the emergence of Bamarang, a company with a strikingly similar appearance and business model to Fab. Bamarang was founded by the Samwer brothers, who have a history of ‘cloning’ successful websites and mobile apps that have originated in the USA. “They had done the same thing with Fab,” explains Molland. “They had created a company that looked almost exactly like us in terms of the font and the colours of the site.” Nevertheless, far from being a threat to Fab, Bamarang opened Fab’s eyes to the overwhelming opportunity that Germany, and Europe as a whole, presented.

“Ikea is about a £30bn business and 15% of their sales are actually in Germany, which is a pretty amazing stat,” says Molland. “Germany is obviously a big design hub and consumers were increasingly opting to go online. So we met with a few companies and we found one we really liked called Casacanda – the people who had founded it were very much in line with the Fab culture. Several months later we also bought a company in London called Llustre, which had just launched, and we consolidated those two.”

Forty per cent of Fab’s global revenue now comes from Europe compared to 10% last September, and following the acquisition of Llustre, the German revenue share has dropped from 90% to 50% with the UK, at 30%, proving a very lucrative part of the business, and one which continues to grow. Nevertheless, Fab’s most recent acquisition – German custom furniture store Massivkonzept – is another significant move, showing Fab’s continued recognition of Germany’s value as a hub for innovative and sought-after design produce. In addition, with this acquisition came Fab’s first foray into the offline retail space. It has taken on Massivkonzept’s Hamburg store, which is acting as a showroom for the online furniture range. “We have re-disrupted and reinvented the mobile side of things and the web side of things, and we now believe we can reinvent the retail side of things,” claims Molland.

It seems that discounting Europe could therefore be a costly oversight for any start-up hoping to make waves in the e-commerce domain. Perhaps it is the ‘language issue’ that sees many an entrepreneur gravitating Stateside for a sniff of success, but Molland believes this needn’t be an obstacle, especially if you have a product that can sell anywhere. “Serving Europe is much more challenging but it is a massive market and there is a ton of opportunity here,” she says. “As much as Europe is different to the US and the rest of the world, the way that the world is moving means you don’t necessarily need to have totally different products. That enables you to scale a lot faster and you definitely don’t need to have unique solutions for every country throughout Europe.”  

 

About the Author

Adam Pescod

Adam Pescod

EB's former editor, Pescod was tasked with ensuring these hallowed pages are rich with excellent, engaging and error-free stories, all written with the entrepreneur in mind. Pescod previously plied his trade penning pieces about pubs and pints. He is also a sucker for alliteration. 

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