Interview with Matthias Nebus
Matthias Nebus
Co-founder
Mybudapester.com
Co-founder
Mybudapester.com
Chinese will be biggest buyers of luxury products in future
Berlin-based Mybudapester.com was founded in July 2015 and has established itself as a well-known retailer of designer brands, especially in the footwear category. This year it is opening up to the Asian target group with an office in Beijing. Co-founder Matthias Nebus deliberates on consumer trends globally and the sneaker craze in the luxury footwear niche.
What was the idea behind Mybudapester?
When we founded Mybudapester. com four years ago, it was actually our idea to expand the stationary shops of Budapester with its locations in Berlin (existing since 1939) or Hamburg with our own online shop as a new sales channel. In addition, we wanted to position the brand internationally with a worldwide dispatch. The actual buying behaviour of our customers was to determine our actions in the future. Their interest in buying our products online was high at that time.
Why did you open stores in Berlin and Hamburg?
Behind Mybudapester.com stands the ASLuxury Budapester.com GmbH with the partner and managing director Andreas Schläwicke. He took over the well-known Budapester Schuhe 25 years ago and developed it into a multi-brand store. At that time there were five stationary shops. Now we are concentrating on the two most profitable shops in the fashion cities of Hamburg and Berlin and on our own online shop. The demand for luxury shoes and accessories is enormous. We have customers who come to our store from abroad, try on various shoes and buy them and then fly home again.
Who are your key investors?
As already mentioned, Mybudapester. com is backed by ASLuxury Budapester.com GmbH with the partner and managing director Andreas Schläwicke. The second partner, Tomasz Rotecki, is head of technology at Mybudapester. com. He is a successful series founder with a long history in e-commerce and an expert in online shop systems, payment methods, conversion, shipping and merchandise management. And the third in the group is myself as head of marketing and communication with an extensive and worldwide network of decisionmakers from the marketing, industry, event and internet sectors. In the first few years, we financed ourselves with healthy organic growth combined with a seven-figure investment three years ago. Although we still feel like a start-up, we want to continue to grow strongly into one of the world's leading platforms for designer brands and expand our product range, including our own products. This year we expect sales of €25 million, and in the next three to five years we are aiming for sales of €100 million.
Why introduce footwear platform in the European market now?
Stationary shops need the help of online shops to hold their own in the market. We have found a lean solution to this challenge. In 2018, we set up a platform that enables stationary retailers to sell their products online through us. This is a win-win situation for both sides: we minimise our merchandise risk and increase sales, and the local branches will continue to generate strong sales and will not remain in their inventory.
What is your retail presence?
We have two stationary shops in Berlin and Hamburg as well as our own online store. This also acts as a platform for other stationary dealers. The idea behind it is simple. Many classic dealers have the following problems: If a customer does not find the products he wants on the spot, he often buys online. However, the smaller local dealers have little time and rarely the technical expertise to set up their own online shop, let alone the personnel to operate successfully. With our platform solution we support the stationary trade and know where the shoe pinches through our experience and from conversations with traders. We set up an individual shop for each retailer and take over the administration and support. In addition, we are actively building up our distribution network with our own stores on Amazon and Ebay as well as on Ceneo.pl in Poland.
What is your retail distribution strategy in Europe? Do you plan to venture outside?
Right at the beginning of the online shop, we had the internationalisation in Europe in mind. In 2017 we opened Mybudapester.com for the markets in Great Britain, the US, Poland and Switzerland. This year we are opening to the Asian target group and already have our own office in the heart of Beijing with four employees. The next step is the launch of an online shop there at the end of this year. In addition, we intend to penetrate the international markets with strong partnerships in the coming years.
How many collections do you store?
More than 5,000 designer products from over 100 well-known brands such as Gucci, Balenciaga, Jimmy Choo and many more are now online. All are synchronised with the international website, with the exception of a few selected items that we offer specifically in selected markets. We analyse the buying interest of the consumers very precisely and observe the current trends and developments of the respective target markets.
What is the market size for luxury footwear and other accessories?
According to industry reports, sales in the luxury footwear segment alone for Germany in 2019 amount to around €1.4 million. In addition, a market volume of €1.6 million will be achieved in 2023, corresponding to annual sales growth of 3.8 percent. The global market for luxury shoes will be around €28.6 million in 2019. Buyers in the US, Japan and China are the main players. China, with its tremendous purchasing power, has established itself in the international luxury business. The forecasts for China are better than good, since the Asian consumers' desire to buy appears to be unchecked.
Which are the best-selling styles?
The products that generate the largest turnover for us are still sneakers and pumps in the price category between €350 and €500. Pumps are clearly very classic products that fit both the business and casual look. Sneakers are currently more popular than ever, and the limited editions are usually sold out very quickly.
Who is the target audience?
In the beginning, it was the qualityconscious high earners from 35 upwards who we wanted to address. But since we have expanded our range and rejuvenated it in line with market developments, we can now reach a much younger audience. Our current customers of Mybudapester are quality-conscious fashion lovers mainly from the DACH (Austria, Germany, and Switzerland) region and a rapidly growing group of buyers mainly from Asia and the US.
What is the best performing category?
The sneaker has become an indispensable part of women's and men's fashion. This year again, sports shoes are generating the most sales. We do not see any end to this trend at the moment.
Which designers and luxury brands are popular in the EU (for men & women)?
The Gucci, Balenciaga and Valentino brands are the most popular with our customers, whether male or female.
What trends do you see in the EU?
Sneaker, sneaker, sneaker-this shoe will not lose its popularity for a long time yet. The shoe is comfortable, fits every outfit and is always put in the limelight by designers with new looks and new ideas, such as the new models from Balenciaga. But also, Hikmet Sugoer can inspire customers again and again with his exclusive models.
What are the challenges?
The luxury market will have to face several challenges today and in the future. On the one hand, the buyer group of luxury goods is becoming younger and younger. The purchasing and consumer behaviour of the millennials and generation Z is already changing product development and marketing. Traditional luxury fashion only plays a subordinate role, the so-called casual look not only gains in importance, but also in acceptance. This is particularly evident in the developments in the streetwear and, above all, sneaker scene. There, price levels have risen significantly and even the long-established brands are gradually launching their own limited edition sneakers on the market. On the other hand, marketing and targeting is already changing for the new consumer group: companies need to provide much more budget for digital channels. Those who oversleep the path to online sales and social media marketing will soon have to reckon with falling sales. Buyers are already finding out about products online; they are following so-called influencers who draw attention to products and influence their purchasing decisions. Whole advertising strategies have to change permanently in order to be able to play a part in the market, for example through exclusive product cooperations and participation in product design. The third remains product piracy. Customers look for dealers and companies they can trust and who are serious. They want real products, not counterfeits. Here it is important to build up and maintain trust.
Please share details about the last two fiscals and your projections.
In recent years we have expanded Mybudapester.com from a pure online shop to a platform, as mentioned at the beginning, in order to further strengthen the stationary luxury trade. The concept has been fully implemented and we have meanwhile convinced 14 shops of our idea and our approach. As a result, we have been able to increase our warehouse and turnover by almost 100 per cent. In the coming years, we plan to expand into China. There we already have our own office with employees watching the local market, and the online shop will follow soon. Next year we want to double our turnover again. For further planning and investments, it is quite conceivable to get a strategic investor on board.
Any announcements to be made in 2019?
We intend to take the Asian market to the next level and step on the gas there. There are reports that predict that Chinese consumers will account as most buyers of luxury products in the future. But we will also focus more strongly on the Eastern European markets in our internationalisation strategy in the coming years. For the platform itself, we will continue to connect stationary dealers and, as a strong partner, make it easier for them to enter the digital world. It is also important for us to make our own brand more visible and bigger. We will promote this, for example, through our own collections and exclusive cooperation, but also through design competitions for upand-coming fashion designers. (HO)
This interview was first published in the October 2019 edition of the print magazine.
Published on: 31/10/2019
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.