Indonesia-based fashion e-commerce company Sorabel is one of the most popular sites of its kind in the country.
The company rebranded itself in February 2019, changing its name from Sale Stock to take on a sharper image. In the fourth quarter of 2018, it was the second most visited fashion e-commerce portal after Zalora, according to an iPrice report.
“We wanted to change Sale Stock’s image, which was often associated with cheap products, into a more exclusive brand that could be enjoyed by all fashion enthusiasts in Indonesia,” Lingga Madu, co-founder of Sorabel, told KrASIA in an interview.
Sorabel’s story starts in 2014, when it was founded by Lingga Madu and Ariza Novianti. The married couple met when they were studying in the Javanese city of Yogyakarta.
During their time in Yogyakarta, the pair realized that it could be challenging for people who live outside Greater Jakarta to keep up with the latest fashion trends that were generated in the capital.
“This was originally raised by my wife,” said Madu. “Yogyakarta’s minimum wage is among the lowest in Indonesia but many high-end fashion brands still opened outlets here, offering products that are not affordable by many.”
Madu and his wife wanted to tackle this challenge by creating quality products at affordable prices for all Indonesians.
Sale Stock’s operation started in Madu’s garage. The two founders traveled to acquire clothes from stores in Jakarta, Thailand, and even China. In 2016, Lingga invited Jeffrey Yuwono to join the team and lead the company as president. In 2018, Yuwono became the CEO.
Business was good during the initial years as the website attracted many customers with low prices. However, Sale Stock was plagued with the issue of inconsistent quality in their products, which hindered customer retention.
“Since we outsourced the products from many suppliers, we couldn’t control the quality 100%. In 2016, we decided to produce our own products by partnering with a factory and warehouses. We placed a team in each location to ensure quality was good and consistent, from the fabric down to the buttons,” said Yuwono.
Spending hundreds of thousands of rupiah on clothes is a luxury for most Indonesians, according to Yuwono. Therefore, they needed to ensure that each customer was satisfied with the company’s products and services.
Since producing their own products, Sorabel has recorded eightfold growth from 2016 to 2019 and sixfold increase in profits.
Sorabel’s unique service that sets it apart from other players is its “try first, pay later” feature, which provides immediate flexibility for customers when they receive their shipments.
“The most common complaint when buying clothes online is that the product doesn’t fit or the material is not what was expected when it arrives,” said Madu. “With this feature, our couriers will wait for 15 minutes after delivery so customers can try the product. If they like it, they can pay the courier; if not, they can choose to return those items free of charge.”
Initially, the costs incurred for this service were high and the rate of return increased by nearly 300%. However, this eventually dropped as the customers became more familiar with the company’s offerings. Sorabel’s retention rate also rose as the customer experience improved.
“This service is one of our strongest sales points,” said Yuwono. “Once customers are satisfied with our products and services, they will tell their friends. So in the long run, the benefits of this service are higher than its costs.”
Multiple styles, a range of price points
Sale Stock’s rebranding to Sorabel was to sever associations with cheap fashion and move the company to a position where it serves a wider market.
And while this has worked, Madu and Yuwono assure customers that Sorabel remains true to its original mission to “bring the most up-to-date and affordable fashion for everyone.”
To achieve this, Sorabel has developed proprietary technology and a data-driven approach to predict market trends and acquire the relevant products, preventing unnecessary stockpiling.
“While some customers are willing to pay a little more for better quality, others may see affordability as a crucial factor. We want to cater to all customers through multiple labels under the Sorabel brand,” Yuwono said.
The firm currently has four private labels and they target to have at least 12 by the end of this year. “Each label has a different style and price, so customers have more choices to fit their individual style,” Madu explained.
Sorabel’s proposition to make fashion accessible and affordable has resonated well with Indonesians. Its revenue distribution also closely reflects Indonesia’s population distribution. For example, according to Madu, over 50% of Sorabel’s revenue is from outside Java.
Expansion plans
Earlier this year, Sorabel took its services to the Philippines under the brand Yabel. It’s currently in a trial phase and has not been officially launched.
The Philippines was chosen as Sorabel’s first foreign foray because its fashion market demographic is similar to Indonesia’s. “Like Indonesia that focused on Jakarta, the retail industry in the Philippines is also very capital-centric,” Madu said. “While Metro Manila is known as a shopping center, other cities usually have limited choices with questionable quality when it comes to fashion.”
Therefore, Yabel aims to reach second- and third-tier cities in the Philippines. As customer behavior in both countries is similar, Madu and Yuwono are confident that their products and services will be accepted there. They expect to officially launch Yabel in early 2020.
The founders do not rule out the possibility of expanding to other countries in the region. In addition to regional growth, Sorabel also plans to open its first offline store in Jakarta this year.
“We are very excited about it, we’ll bring a unique and different shopping experience to customers through this offline store,” said Yuwono. “If most retailers rotate their inventory every two or three months, we are committed to updating our inventory faster so customers will find new styles and products at our store every week,” he concluded.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in Southeast Asia.