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Game On: Growth Hacking Tips From A Dubai-Born Brand That's Going Global We realized that The Luxury Closet was excellence not just at a regional scale, but at a global scale! Could we dare to go international?

By Kunal Kapoor

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Back in the earlier days of my enterprise, The Luxury Closet, I remember one of my very first pitches was to an investor, and I expressed the high claim of the company becoming "the world's largest" pre-owned luxury marketplace. He didn't laugh, but he did begin to explain that this was probably not going to happen, and that we wouldn't go beyond our borders. But we did! The Luxury Closet has just completed a growth funding round totaling US$11 million (led by Knuru Capital, which will become a shareholder in the platform, alongside Middle East Venture Partners and Wamda Capital), and we're also embarking on our expansion into Hong Kong through our partnership with Guiltless.com, which will see us taking over operations of the site. Looking back on our business' trajectory today, here's how we went about achieving all of this:


Soon after conception, we realized that we were blessed with an inherently global model. A Chanel bag is a Chanel bag wherever you go. More importantly, since we were reselling older items, it meant our width of assortment consisted of unique styles produced from Chanel from over the past 10 years. Putting the two together, it meant that we could have a globally identifiable product, plus a unique item differentiated by year, condition and price. Also, at US$1,000 (that's our average basket for international sales), global buyers had to pay very little in shipping costs, compared to the value of the product.


In 2012, we ran a real scrappy business. It was still the early stages, and our technology was very basic. In fact, we ran the whole platform on Word- Press, a content management system that is designed to build blogs, not e-commerce marketplaces. It was only in 2014 that we started to build our own platform from scratch, and that meant we had to design every single workflow from scratch. As we gained in size, the problems became more challenging. We soon realized that we had a fairly complicated and unique supply chain. We had to identify items across 500 brands and 10 years of back catalogue, then estimate a resale price, pick up items from individual sellers across the MENA region, authenticate each item, and get them ready to catalogue one by one, as each is a unique sku (stock keeping unit). Once we nailed a process, we had to scale it, and this was even harder. It was a hard engineering feat to build a supply chain that brings in millions of dollars of items from thousands of people, and then resell it to another few thousand people. However, once we built this, we realized that it was excellence not just at a regional scale, but at a global scale! Could we dare to go international?


This is the tricky part. Country set-ups can be expensive and risky, and our first one failed miserably. It was expensive and slow! Within a few months of starting it, we had to let the whole team go. What should we do differently the next time around?

The magic sauce involved the following three factors:

1. Localization We tested a fair bit with site localization. Currencies was the most important, shipping costs and times next.
2. Partnerships We realized that we didn't have to win countries; we just had to win the right partnerships. Could we sell on eBay or similar sites? It turned out to be a great growth hack. We could shortcut our way to making a decision on which market to be in, which products to sell, and build a base of customers.
3. Lean entrepreneurial teams Once we were confident on the market, we needed a lean team that was entrepreneurial, and in all our cases, headed by ex-founders of smaller competitors. In Hong Kong, we took over operations of a comparable business, and in Kuwait, we aqcuihired a fellow founder. The country teams are very focused on managing top customers, and finding the right supply, and our headquarters makes life simpler for them by managing other functions.

It's still early days, and the goal of each country team is to scale the business like I scaled it in UAE. The initial 30-day traction the teams produce is astonishing, and with it, The Luxury Closet is moving to the next stage of growth. Over 40% of our sales come from outside the home region, and we ship to over 40 countries a year, and this portion of the sales is growing 100% year on year. The next stage will bring different and wonderful problems to solve, and I really look forward to that.

Related: How To Get Funded (And Keep Investors On Your Side)

Kunal Kapoor

Founder, The Luxury Closet

Founder of The Luxury Closet, Kunal Kapoor is a serial entrepreneur with a background in luxury and fashion. He built a successful sportswear brand in India, and then received an MBA from INSEAD in France. Kunal subsequently landed in Dubai, working for the French fashion empire Louis Vuitton. In 2011, Kunal founded The Luxury Closet, the largest marketplace for luxury items in the Middle East. This successful and unique venture sees luxury products from Louis Vuitton, Chanel, Rolex, Cartier, Louboutin and 100 other top brands sold for up to 70% off the original price. Kunal strongly believes that the ability to buy luxury items should be available to everybody. His love of entrepreneurship and fashion has been the heart behind The Luxury Closet.
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