Fab will postpone plans to enter emerging markets

According to the Wall Street Journal, Fab.com CEO Jessen Goldberg Jason Goldberg said in an interview recently that the company will postpone its plans to enter emerging markets. In less than two years, Fab.com has become the e-business industry

According to the Wall Street Journal, Fab.com CEO Jeson Goldberg, the creative commodities flash-purchase website, said in an interview recently that the company would postpone plans to enter emerging markets.

In less than two years, Fab.com has become the star of E-commerce industry. By selling novelty products such as patchwork cushions and animal-patterned T-shirts, it has gained millions of of its subscribers and has earned about 700 million dollars in the latest round of funding.

However, even fast-moving start-ups need to slow down. Goldberg said he and his board had recently decided to postpone a 2013-year plan to expand into a huge emerging market. The company made the decision partly because Gilt groupe and other flash-purchase sites were in trouble after overly aggressive expansion.

"We're still a relatively young company," Goldberg said. "We need to be cautious and avoid spreading the stalls too much." ”

Fab was originally a gay social network, and later Goldberg saw its potential as a design based sales website. He uses mobile and social media to drive the growth of the site, currently registering 10 million users and covering 26 countries. During the "Black Friday" to "net purchase Monday", Fab Web site sales reached 4 million U.S. dollars, compared with the same period last year, a significant increase of 1 million U.S. dollars. The company has not yet made a profit, but says it expects to achieve revenue of around $140 million trillion this year and will be keen on profitability in 2013.

The 40-year-old, in an interview, talked about how he managed to do business around fake beards, bear-shaped night lights and other commodities. Here is an edited interview excerpt:

Q: How is the holiday shopping season so far?

A: The holiday shopping season has started to start off much faster than in previous years. In November, our daily sales were over $500,000 trillion, compared with 150,000 dollars at this time last year. In the first 20 days of November, the company's total sales rose by about 300% per cent year-on-year. The average turnover of orders and the number of purchases per product have increased. Now people are definitely shopping.

The demand for novelty, fun and colorful goods is very high. People work very hard for a year, I think they just want to get some fun by shopping. Shopping therapy is quite reasonable.

Q: One of your best-selling products is a hat that is woven into a fake beard. Why would anyone buy that?

A: Why doesn't anyone need that? It's very warm and makes you look good. We've sold thousands of pieces and we'll see it in our TV commercials. This is the first time we have advertised it this year, which has also brought us great benefits. Over the past two weeks, advertisements have increased the rate of direct access to fab.com by more than 40%, and those visits have reached twice times the average level of the site.

Q: Flash-shopping sites like Gilt and Rue la La are experiencing growing pains, and in some cases they are tightening spending. Is there anything that bothers you?

Answer: User experience. Fab currently has 12,000 kinds of products. And this time last year, we only have 2500 kinds. How do you help people find and find 12,000, 20,000 or 50,000 products in an interesting and useful way? How do you keep the product fresh? The fake beard hat is selling pretty well this year, but how will it behave next year? After all we're not able to rely on fake beard hats next year, You have to keep making the product fresh.

Q: You recently reached a partnership agreement with Facebook to sell gifts on the social network. How much business will this bring?

A: Over time, Facebook will come up with a good development model, and we want to be on their platform when they do that. Its user base is huge and the team is strong enough to quickly improve services and update iterations. We are currently only touching a small part of Facebook's American users, and this year we will gradually cover the rest of the users.

Q: You said that the 2013 fab growth will come from Japan, Brazil, Turkey and India, but now you are postponing expansion plans. And why?

A: We are now entering two major markets: the European Union and the United States. Europe's business this year will be slightly more than 30% per cent of the company's total sales. Now I focus on driving the U.S. business to profitability, and then making the European business profitable. When we begin to see that the two businesses are in a position where we think the future will certainly be able to achieve good revenue and profitability, we will start a new round of investment.

Q: Next year, are you likely not to enter those emerging markets yet?

A: Before that, we were under a lot of competitive pressure in Europe because there are many websites that imitate us. But in Asia and emerging markets, we have yet to find a bigger threat, so we are not rushing to enter these markets.

Q: Earlier this year, your average delivery time was 15 days. How do you improve your delivery speed?

A: We live in the Amazon world-distribution should be fast and free. We invested tens of millions of dollars in two areas. On the one hand, the construction of warehouses, so that can be very rapid delivery of goods. On the other hand is purchasing inventory. During the holiday shopping season last year, only 10% of our products were in stock. Today, the proportion of fab products in stock is 70%, which means that the product can be shipped within a day after the buyer's purchase, and delivery time in the United States is 1-4 days.

Q: How do you use data to learn what users want?

A: We will do a lot of work on customer segmentation and demographic analysis. We are beginning to become smarter about pushing specific products to people based on browsing and buying records. We are already one of the leading companies in the industry using E-commerce data to understand a wide variety of products and marketing. Next year, you will see a more personalized and customized service for Fab.

Q: Will fab open physical stores in the future?

A: We are exploring this. How do you reinvent the retail experience of a physical store? 10% of the goods on Fab are artworks, mainly posters, print and peaceful prints. No one has created a remarkable way of buying such goods in physical stores. We want to do that.