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When a woman looks at a photo of a Chanel 2.55 bag, it’s a Chanel 2.55 bag in any language, says Roger Yuan, CEO and co-founder of Clozette, Singapore based social commerce site launched in January 2011. Since it’s arguable that pictures are a universal language, his site may prove that his theory is right. “If you look at where we are situated-we are based in Singapore- we are surrounded by countries with different cultures, languages and religions and we wanted to do something that could transit the borders by focusing on providing a platform that relies on visuals,” Yuan says. “Look at the visual platforms- fashion is probably the most suitable genre.” To give you a bit of background, Yuan and fellow founders [Kersie Koh, Creative Director, Cheryl Tan, Business Director, and Meng Chua, Chief Technologist] used to work for companies like SoftBank, ZDNet and CNET, which is now part of CBS Interactive. Roger and his founders saw the rise of social media and e-commerce in Asia wanted to do something to do something different- a marriage of social media and commerce to make the shopping experience fun. Yuan created Clozette to make shopping an entertaining experience where you can interact with your peers and with people who have similar interests as you. FashInvest sat down with Yuen to discuss the sites recent funding and Clozette’s burgeoning sites in Singapore, Indonesia, Taiwan and Japan.
FashInvest : Can you tell the readers what Clozette is?
Roger Yuen: Clozette is a social commerce ecosystem where we are building a community primarily of women who have a very strong interest in things that are focused around fashion and style, beauty and shopping.
F.I. : When a person uses Clozette what are they going to find?
R.Y. : We’ve created this virtual closet where users can edit things that they have or things that they desire and within the platform we make it very easy for them to collect things or share things that they have. We have a virtual styling tool that is a little similar to Polyvore where they create an outfit with things that they have and with things that they desire. Users can engage with the community and get comments and feedback or even share interesting finds that they may come across anywhere else on the web.
F.I. : You said that Clozette is a social media network for shopping. Do you think it’s made an impact on social media in Singapore?
R.Y. : Yes. Just to give you an example of how much impact we have made in the last three years- we’ve garnered collaborations with megabrands like Burberry, Fendi, Estée Lauder and SK-II. We’re working with major agencies, so the way we approach it is very different from other social media sites, because typically we provide a platform for brands to engage with users and vice versa. We combine the best of user-generated content and bread content. As an example we’ve been running a campaign with SK-II for the last nine months. SK-II is one of the premium beauty brands that came from Proctor and Gamble. This is where we produce beauty tutorials using our community, but we basically do it through products and it’s shared, digested and commented on by users within the community. We’re not just about user-generated content but also taking content into our community as well.
F.I. : Tell us about your strategic partnerships with P&G, Glam Media and Rakuten. How do you use their products to buffer your content?
R.Y. : Rakuten is one of the top e-commerce companies in the world, just behind Amazon and eBay. They’re headquartered in Japan but they have a site in Taiwan and in Taiwan their community is predominately women and they have very high fashion content, but it’s a market place. Within the marketplace they have fashion, food and electronics and this is where they actually use the Clozette platform. At the front end, users can come and they can discover user-generated content that is linked to purchasers of the Rakuten marketplace. Clozette has an interesting technology. We partner with research organization, Visenze , that has this very powerful virtual intelligent visual recognition technology. For example if you go to the site in Taiwan a user can look at a photo and the technology recognizes what the user is wearing- a dress, a bag or a pair of shoes and then it searches the database. In this case it searches the Rakuten marketplace, and returns things that are similar and this contains an image. Clozette has this technology on all our sites as well, and, even as we speak, we expect to launch end of next week or early next week a mobile app where you can take a photo of clothing, a bag or shoes and it recognizes that image and it sets up a Clozette database of 3,500 brands and it [suggests] similar items you can buy. We bring a lot of innovation in the social media space and this is the reason why companies like P&G, Mediacom, Rakuten and Glam Media work with us, because we have this ecosystem, utilities, innovation and technology that helps them better engage with their constituents.
F.I. : We noticed that you have sites in Japan, Taiwan and Indonesia. Why did you decide to expand there?
R.Y. : When we first conceptualized Clozette, the fact that it’s visual transcends cultural, geographical and language barriers. However, we did notice that there was a need for what we call ‘hyperlocal’ communities. Today, if you go to Clozette.co we may have users from Indonesia, but they are probably the upper echelon, where they are very comfortable connecting with people beyond their local community and this is partly because this was driven by local partners saying, ‘ We are this existing community and we would benefit a lot by introducing your platform.’ When we looked at that, we were intrigued because it would help is deepen our reach into the local community, who overtime might then be more comfortable to navigate beyond the local [reach] into Clozette.co or even to the Japan or Taiwan site, to engage with their peers outside of the country.
F.I. : Can a person who is not from Singapore or Asia have a closet featured on the site?
R.Y. : Yes, we actually have users from more than 100 countries. If you go to ‘Clozette Shoppe’ we actually have a lot of shops from the U.S., shops from Nordstrom, Shopbop and Saks Fifth Avenue, among others, so we do have a fair amount of organic traffic from the U.S.A. and the U.K.
F.I. : When you first started the company and you were first looking for investment how did you go about it?
R.Y. : Fortunately I have already been involved with four startups, so when I started Clozette, Clozette was actually my third one. The first company I sold and after that I got started with a social media monitoring company and that’s in part where I got to get deep insights in the rise of social media. Through the two startups I had already built a descent reputation, good contacts with investors, who were obviously very key right from the inception of Clozette, so I was able to line up interest even before the company was conceptualized.
F.I. : What advice would you give to fashion tech startups looking for funding?
R.Y. : As with most startups if you look at the market that you are trying to serve, this is as you are trying to answer this question-what problem are you trying to solve. So in our case when we do Clozette and this network of sites we’re trying to solve the problem of how do we get each of these local communities to interact beyond the local community whether its in Singapore, Malaysia or Indonesia. We have very distinctive cultures in Asia, and big fashion and brands are equally well known in the community, so when we look at the market and designed our business model, we saw a need and we are fulfilling that need. I would say to any startup whether you’re in the fashion space or any vertical, you really have to look at what is the need that you are trying to fulfill. Where is the gap? Where is the opportunity for you?
F.I. : You just mentioned your business model. Can you explain that further?
R.Y. : We have a couple revenue streams. Given that we have a very rich, vibrant community a lot of brands – for example the P&G brands, SK-II, and Burberry. As an example Burberry every year when they launch a new winter-autumn collection or spring-summer collection they do a live stream, from Hyde Park or from any of the [other] countries we are always invited to that. So we become a platform of choice for a lot of these brands. A lot of agencies will use our platform instead of or in addition to Facebook to create what we call ‘engagement.’ Clozette is providing a platform for brands instead of just appetizing them. It’s really about where the brands can come and engage and this is where we get paid an engagement fee or sponsorship fee. On top of that, with the shopping, we drive leads through these merchants and we get paid a referral commission for every successful transaction, then we refer to them [on Clozette].
F.I. : You were talking about how your site is valuable to brands. When you first started Clozette and at this moment, how do you convince brands that your site has value to them?
R.Y. : Extremely difficult but I think we were fortunate [because] when we first started we were very focused. We had some really local brands- they were some brands that gave us money but they were not really fantastic and we felt that those brands and advertisers might not have given us the image that we wanted so we persevered and we really worked hard at soliciting brands. Burberry was actually one of our very early customers. Because Burberry was a believer in technology, they believed in social media and they saw that we’ve got credentials. The good thing about Clozette was that we were the pioneers in the digital media space in Asia- we’re talking about the Internet and digital advertising in the late 90s- so we had that reputation that we were a bona fide company. These early companies took a chance with us and we went out of our way to make those campaigns they ran with us were successful. With each of these successful campaigns we gradually got more and more companies on board, but I think the biggest break that we had was working with Glam Media. So Glam Media, as you probably know is based out of the Bay Area in San Francisco. They are the world’s largest women lifestyle network, with more than 260 million unique users a month. We were connected to their Asian headquarters in Japan when we were about six months old through some contacts that I had. They took a look at our platform and they said, ‘Hey, you know we like what you guys are doing,’ and [they asked us if we would be] open to them licensing our platform in Japan. Obviously we were extremely happy to do so. At the same time, they wanted to launch some of the properties in Southeast Asia and knowing our background in the digital space, they in turn, trusted us to launch some of the properties. We operate Glam Southeast Asia out of Singapore, but the site serves the English speaking community across Southeast Asia and operating with the biggest women’s lifestyle network in the world gave us tremendous credibility with the brands, communities and agencies.
F.I. : You just talked about how Clozette was a pioneer in the digital space in Asia.
R.Y. : Why did you decided to jump at the chance to start a website like this in place that didn’t have a site like Clozette?
My early days in the mid 90s I was working for SoftBank. SoftBank is a well-known internet player- they were the early investors in Yahoo. I was inculcated with this culture to explore the local digital frontier and before I started Clozette I started and invested in two successful companies. I wanted to do something fun. The early companies were focused on technology- one was security and one was social media monitoring and I thought the fashion space would be really fun. I was convinced by my co-workers and I made the remark that when I was in technology I used to visit a lot of tradeshows looking at servers, routers and all those hardware boxes and when Clozette was three years old we were invited to the front row of a Malaysian fashion show and for me that was a defining moment, being there looking a these beautiful creatures in their interesting outfits.
F.I. : Where are you taking the company next? Are there any more plans for expansion?
R.Y. : Right now we intend to focus on Asia. With this funding we want to grow our footprint in key markets here. We are present in Indonesia- Indonesia has a population of 250 million, almost the size of the U.S. -a huge market, rising middle income and social media is huge. They are one of the top four users of Facebook on mobile, e-commerce is rising so these are our markets. Southeast Asia alone has a population of over 600 million people so there are tremendous opportunities for us not just Asia , but that doesn’t preclude us from opportunities in the U.S. or even in Europe when they arise. We are the official media sponsor for Fidé Fashion Week [in Singapore] so we actually want to bring all this rich user-generated content beyond the shores of Asia and I think users outside of Asia Clozette will be a very interested in finding all this fashion content that may not be available in their home country.
By Ashley Paintsil