From our Hot Seat series.
Ever since its launch in 2014, international direct-to-consumer and eCommerce apparel GRANA has been taking the region, and way beyond it, by storm. Hong Kong-based founder Luke Grana gives The Loop HK the manual to disrupting the fashion industry using technology and a little bit of common sense.
A Little Background
The idea for GRANA first came about when Sydney-born entrepreneur Luke Grana was visiting his brother in Peru and came across Pima cotton. The fabric’s plush feel inspired him — along with his dissatisfaction about the lack of quality, and high mark-ups in traditional retail stores — to disrupt the market with a fresh take on eCommerce.
In true American dream fashion, Grana then moved to Hong Kong armored with an ambitious plan and all of his savings, got Dutch investment banker Pieter Paul Wittgen on board, founded his eponymous brand, and the rest is history.
GRANA’s concept is as simple it is clever. By dealing with fabric mills directly and doing everything — from designing to PR to packing the clothes in its trademark cornflower-blue boxes — in-house, in a spacious warehouse in Wong Chuk Hang, GRANA is able to offer quality wardrobe staples that are accessible to everyone. In addition to its online store, GRANA has set up a physical ’fitting room’ and pop-up shops where customers can try on the clothes before ordering them online.
5 Things You Need to Know, According to Luke Grana
1. Hong Kong is a great place to set up a start-up
I did some work experience at French Connection and Zara to learn about the industry, and then I started researching locations to set up a global distribution center. Hong Kong is such a major hub, and I realized that setting up in Hong Kong is great for sourcing, tax, global shipping. The prices that DHL could give me for global shipping were really amazing — I was just so excited to learn this. I had US $200,000 of savings, and I got a one-way ticket to Hong Kong.
I’ve been living here for 3 and a half years now. I definitely love Sydney, but I like the mix of east meets west here and how fast-paced it is. Things can happen really, really quickly in Hong Kong — what we did in Hong Kong in one year would have taken about three years in Australia! It’s quite difficult to raise capital there, because it’s only a limited market, and it’s not easy to get people to believe in what you’re doing.
But coming here, people really thought of GRANA as a global brand, and we were able to raise capital and hire team members very quickly. I really like Hong Kong, and I see it as home now. I’m hiking most weekends, I’m active, meeting people, going out for dinner most nights. It’s a really fun city and it just really suits the start-up lifestyle. It’s been great so far.
2. It’s a never-ending learning process
Before starting GRANA, I set up some cafés and other types of businesses, but I didn’t know much about the [fashion] industry. I’ve learned a lot, and learning all about different types of fabrics is a big passion of mine. I love learning where they come from, how they’re made, different washings, how to make the fabrics soft, the whole process from the raw material all the way through to creating the yarn and the end product. That’s been really interesting to me.
The most challenging was coming up with an idea for a fashion brand that’s based on quality. I think early on, the biggest difficulty was to find the right partners and techniques, and to make sure that our suppliers, fabric mills and garment makers adhere to a very high quality standard. I was very new to everything, so I didn’t know how to set [this standard]. I think that the quality of our first few batches — we call them version one — was good but I think we’ve improved a lot over the past two years. So just to give you an idea, the T-shirts that we are selling right now are version four.
The quality early on was a challenge, but you know, we’ve learned so much, we made so many mistakes, we’ve put in the right systems and suppliers, and now I believe that our quality is our strongest component.
3. Quality is everything…
The way I feel is that there is a trend among Generation Y — In western markets and Hong Kong as well — which is what I call “back to quality basics.” We don’t need big patterns and we don’t need big logos on our clothing. We don’t like to shop fast fashion: you wear those clothes once or twice and the quality just dies. We love buying luxury brands, because sometimes they don’t have the big logos and patterns, the product’s great and the quality lasts, but we don’t want to pay those prices. And I think that’s where we’re trying to break into the market: we can provide people quality essentials without the price tag. Honest and low prices, that’s what I believe in.
And whether it’s a service, café, mobile app, or clothing line you’re setting up, the quality really needs to be great. And for us, for GRANA specifically, the price point needs to be great too. But it works the same way in, like, a restaurant: if you serve bad food, people won’t be happy, and they won’t come back — that’s how we see it. When someone tells us the quality is really great, that means our job is done well, and when the quality is not good, we’re not happy and we got to fix it.
4. …and so are your team and customers
Getting a team all aligned around a single vision is really quite difficult but you know, choosing the right team members and creating an environment for them to shine is really important.
We have a group of about 3,000 active members who give us feedback on the quality, the fit and the design through GRANA labs, an initiative we set up about a year ago. So we keep getting their feedback and feeding that into the design team so that the team can update the potential products and the existing ones.
5. Don’t lose sight of your core values
The best advice that I was given came from one of our early investors. He told me to stay true to the core value propositions, and to remember why the business was started, the ideas about great fabrics, prices and creating essentials. And that was really good advice, because over the past few years, a lot of people have come up to me and said, “GRANA is doing really well, why don’t you increase your prices, start doing more fashion-focused products, get this fabric and just go to China, because it’s much, much cheaper.” I’ve been sticking to our core value propositions since that chat, and in twenty years’ time, I can hopefully sit here and say that we do the best fabrics and essentials at a great price.
And looking towards the future?
There are so many exciting new innovations happening in eCommerce in the fashion industry at the moment: offline & online experiences merging together to improve the customer shopping experience, for instance. E-Commerce brands are seeing the value of using smaller physical stores, stocking lean inventory and giving customers both an offline and digital experience with digital displays and smart fitting rooms. Introducing technology in-store — such as iBeacons — provides more opportunities for brands to gain insight from store data and the potential to transform a single store visit into multiple online sales.
However, to stay on top of your eCommerce game, the post-purchase experience is crucial in keeping the millennial customer satisfied. It’s all about having local drop-off or pick-up points, anytime and anywhere local return locations, same-day delivery and reducing shipping costs.