Start-up eyes eBay fashion crown
99dresses hopes to take on eBay as the web's pre-eminent online fashion retail portal by overhauling its systems and business model to underpin a possible expansion to America.
Each user of the peer-to-peer clothes-swapping website currently gets their own infinite wardrobe — a digital version of their real-world fashion collection — where credits (buttons) are used to hire, buy and sell items to other 99dresses users.
Founder Nikki Durkin is introducing a cash-based system and phasing out the current "buttons" system because it was too niche, especially for a smaller market like Australia.
"It's basically the same system but users can cash out," Durkin said. "You can still have credit in account and when you sell something you get credit to spend on something else but you can also cash out."
The change is aimed at bolstering the site's attempts to take on the global leader in fashion retail, eBay, the biggest competitor to 99dresses.
"We've always seen our biggest competitors is apathy and sheer laziness and our second biggest competitor is eBay," Durkin said.
"Even though we have less market share the reason people use us is we have a faster experience and a cool community.
"The upload process is easy, fashion focused, the eBay-listing process is same for a garden gnome or designer dress."
She said 99dresses also trumps eBay in the "fast-fashion" space (trendy, cheap items that are under $40).
The site launched last September and also already signed up 6000 members, who have traded 5000 items and uploaded 6000 items.
She said the aim is to create a more efficient way for women to consume fashion.
"It's collaborative consumption of fashion," she said. "Most girls don't wear 80 per cent of their wardrobe and are always complaining about having a wardrobe full of clothes and nothing to wear."
"If we can digitise and connect all the unwanted portions of these girls' wardrobes, then we have this infinite wardrobe for people to choose from."
SWOT analysis
Strengths
The company has identified an under-serviced market — fast-fashion — which has proven consumer interest.
Weaknesses
It could be pigeonholed as purely serving the fast-fashion market, missing out on the opportunity for the lucrative high-end designer fashion market.
Opportunities
The incumbent eBay has completely neglected the market and its product and there is no other clear leader. The idea integrates a very powerful social phenomena dash; fashion, women, community and trading.
Threats
This lives and dies by the community so if there is a bad experience, then it could be disastrous. Also, it would face significant competition if an existing brand or online community (eg, Vogue forums) launched a similar service or application.
Conclusion
99dresses has successfully tapped into a very human urge: female shoppers. The idea is proven, it has survived its growing pains, but needs excellent execution to realise its potential. At the very least it will be acquired by a fashion brand.
Verdict: BOOM