E-commerce in Italy: the Velasca Case
In 2013 Italian E-commerce has considerably grown; it was a much more rapid increase than the one of other occidental countries. This is one of the reasons why many italian startups have decided to try their hand at joining the industry and have even managed to obtain investments and collect some successes, even though it’s still fairly early to say for sure.
And yet it seems to be an unspoken rule; when the topic turns to startups and e-commerce, somebody surely will turns sour: of course, not every e-commerce website can present itself as a startup, only those who have managed to create a service that’s truly innovative. Some business that have managed to do so are Hula, that supports its clients in their buying choices in base of their friends’ preferences, Velasca, that sells artisanal and customizable shoes at half price if compared with the physical stores, Wine0Wine, offering exclusive wines and rare bottles with a discount that reaches 70%, or even Milkway, a social e-commerce specialized in adventurous sports.
THE NUMBERS OF E-COMMERCE IN ITALY
In Italy during 2013 E-commerce reached a 18% growth (BY: Osservatorio eCommerce B2c Netcomm – School of Management del Politecnico di Milano). Much more of USA and UK, that have grown of little more than 10%. Furthermore the acquisitions made through smartphones and tablet is now 12% of the Total. This tendency is active here more than ever, even if a bit more slowly. In 2012 the worldwide E-commerce market equaled 1.025 Milliard Dollars, with a 21% growth respect to the precedent year.
Among those who have more benefited from this trend there are Zalando, a product that reminds of the american Zappos, created by Rocket Internet in 1999 and acquired by Amazon 10 years later. Zalando is a startup that only sells shoes, without any additional costs added for the shipping or the return of the items, fully centered on the user experience.
THE VELASCA CASE
Passing to speak from Zalando to Velasca is fairly easy. I have chosen this startup since it represents a very inspirational e-commerce case. Velasca was cofounded by Enrico Casati, Fabiano Matteo and other 2 less active partners one year ago, after 5 months of undercover work. Despite the short time, in February it closed a round worth 60.000 Euros thanks to business angels, and reached an agreement with a bank for other 40.000 Euros. It is now seeking other 50.000 Euros through evaluation.
Velasca is the result of Enrico and Fabiano’s passion for shoes: their past in the banking and financial areas notwithstanding, they are the ones to invent the products, that are then designed by suppliers and realized by local artisans. What Velasca wants to do is to distribute online ‘Made in Italy’ shoes at half the price of physical stores, offering also the possibility of customization. This is possible thanks to their business model, based on direct sales to the consumer. The Velasca E-commerce, launched in May, closed 2013 with an active worth 50.000 Euros.
INNOVATION IN THE BUSINESS MODEL
“There is no innovation in design, but only in the business model - explains Enrico -. We wish to sell to foreign markets a quality product that is based on ‘Made in Italy’”. Velasca is now basing its strategy on both E-commerce and, as we said, ‘Made in Italy’. During 2013 in fact, Italian product searches on Google had a 12% increase in comparison to 2012, and almost the same (13% according to Google) the year before.
“During the Fall we’ll launch the new version of Velasca, that will allow our clients to personalize their shoes by adding their names on them”. The idea came to Andrea living overseas, in Shanghai and Singapore specifically: “In these cities if you want quality shoes, the only way is the store. The design is a mass produced one there and there is absolutely no chance of customization”. Clearly the major income will come from stock sales, but this operation will help Velasca to position itself as a brand. Their target is made up by young professionals between 24 and 45, “People who do not have time to go looking for shoes but still want a quality product”.
THE RETURN PROBLEM
One of the most common problems for the online sellers is the one made up by returned products. How can one choose a shoe without proving it?
“We have overcome this particular issue presenting comparative charts for different models and expressing the exact measurement, in centimeters, of the products. Consideration for the client is everything here and this is the reason why we have chosen to make returns free”. For now the percentage of people who have take advantage of this is around 7%, an slightly higher average than normal e-commerce standards, but we are still at the beginning. “We are expecting a ‘3 zeroes’ increase, since we started from very low numbers and we have invested much in foreign markets”.
THE COMPETITIVE ADVANTAGES OF MADE IN ITALY
Creating a startup that works in the e-commerce sector often signify lots of work and little glory. “We knew this from the beginning: if you want to create a startup that works with innovative tech it will be easier to have media coverage, but you will also face higher risks” precises Enrico. In support of the Velasca founders though comes Scarosso, a german startup based on a very similar model (they too sell italian shoes) and it managed to gain an investment of 2 Million Dollars in 2013 after only 3 years from its creation. However, if compared with it, Velasca has the “competitive advantage of Made in Italy”, that translates in the possibility to build a direct relationship with the artisans and the full use of the Italian brand, so appreciated in foreign markets.
By Silvio Gulizia, on Twitter as @SilvioGulizia