Deals | NEIWAI, a lingerie brand, scores US$9.5 million in series B+ funding

NEIWAI, an underwear brand, has picked up 60 million yuan (approximately US$9.5 million) in series B+ funding from Huaqiang Capital.

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Deals | NEIWAI, a lingerie brand, scores US$9.5 million in series B+ funding

NEIWAI (内外) is an outstanding brand emerging in China’s lingerie battlefield.

Comfortable wireless bras with simple and natural design were NEIWAI’s prediction on Chinese women’s preference about lingerie when the company was established 5 years ago. It then believed that Chinese women would become more independent and confident, focusing on themselves instead of currying favor with others, as such, chose light and fitted bras instead of sexy push-up ones with thick sponge padding.

NEIWAI is a mom-and-pop start-up run by LIU Xiaolu and LI Jiang. LIU had come from a family with members that specialized in the underwear business and was occupied with brand planning on female consumer goods and luxuries in consulting firms, while LI graduated from Nanjing University and Columbia University in the City of New York successively and worked in strategy consulting firms and multinational pharmaceutical companies with a rich experience in operation and management.

With their cooperative management and development strategy of decreasing SKU and promoting knockout products and popular ones, NEIWAI has realized three consecutive years of growth rate, each year by 5 fold, and achieved sales of 150 million yuan (approximately US$23.7 million) in 2017 and won over 100,000 orders in one single day in the Double 11 Promotion. It is the sole domestic start-up that is included in the top ten underwear sellers of Tmall (天猫) with other big industry carriers like Triumph, Victoria’s Secret and Wacoal.

In 2018, NEIWAI is launching new operations in several fields other than relying on its sales momentum.

Brand: be recognizable

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In order to improve brand image, NEIWAI had invited DU Juan, a supermodel and actress, for endorsement. Additionally, it began to open brick-and-mortar stores. The two steps are an integrated whole to develop NEIWAI into a lifestyle brand with products of all categories.

Offline stores: data for product revolution

Offline stores are communication channels between brands and customers. Burgeoning e-commerce will not completely kill off offline business, for consumers need direct contact with products like underwear. More than that, brick-and-mortar stores are able to guarantee sufficient inventory and provide better services.

Liu said they would integrate online shops with offline ones to build a comprehensive service system. Currently, NEIWAI has 5 offline stores spread across Shanghai, Nanjing and Chongqing, and 25 more are opening this year.

Offline stores also play an increasingly important role in the age of big data. For example, the store in Changning Raffles City introduced 3D body scanner to collect users’ body data, so that customers can get the perfect bra there. It’s said that the scanner can obtain 3 million data points within 6 seconds with millimeter-level accuracy.

The uniform sizes cannot fit every customer. It applies to all apparel industries. In fact, NIKE and Adidas have both launched a tailor-made project based on the collection of customers’ feet data. This similar reform in production might also be seen in the underwear industry before long.

NEIWAI places weight on the digitalization of customers’ information and combining online and offline data in cooperation with iStore. As such, NEIWAI can improve its service abilities like managing customer rewards and discounts, online purchase and offline pickup, to physically choose products but pay online and receive LBS (Location Based Services) targeted marketing.

NEIWAI is going to expand its range of products to casual wear and homeware. With the success it had in marketing underwear, NEIWAI will easily win customers’ trust in its future development.

Supply chain

With regards to the underwear industry, it has difficulty in finding the appropriate supply chain as it requires a long process with complicated techniques.

The strategy of streamlined SKU and sufficient inventory can help NEIWAI reduce the pressure from excessive inventory turnover and focus on product improvement. Generally, around 30,000 units of the most popular product, and 10,000 units of the popular range of products were sold monthly.

NEIWAI has been focusing on R&D with nearly 40 professionals working on design, pattern, development, procurement, and quality control. It also built a design and R&D center covering an area of 1,500 square meters in downtown Shanghai, one of the most desirable areas in China.

According to LI, NEIWAI has planned its development in overseas markets. By cooperating with Amazon, its products will be accessible in America and Japan in the first half of 2018, which will then be followed by opening the first overseas flagship store in SOHO, New York in the second half of the year.

Writer: DENG Henhen