BRIAN BUCHWALD: Bomoda was founded out of a conversation that I had with a Chinese woman in late 2011. She was a living in Britain, had moved to the Middle East and then two years later moved back to London. By the time she got back to London, she mentioned this massive influx of Chinese tourists and expats flooding the city looking for places to go and things to buy -- but appearing relatively clueless in the process. When I started to research the space and take a close look at what’s going on in the Chinese luxury market, what I saw was something that’s truly exciting. China last year surpassed Japan and the US as now the number one luxury market in the world. It had gone from about 14% of global market share in luxury consumption to about 30% within about a half decade, which is just an obviously phenomenal growth. There are also interesting wrinkles to the market that I thought made it really ripe for new business models and disruptive media and technology plays.
But what makes the Chinese luxury market so right for this kind of project?
For one thing, Chinese consumers are brand new to the luxury space. Every year up until last year you had more new luxury consumers entering the market than you had total luxury consumers the year before. Right now, you have a little over 200 million luxury consumers in China, which is obviously a massive number. The average luxury consumer is 20 years younger than their western counterparts. They’re entering the market at a much younger age which means that A, if you can build an effective relationship with them that relationship can have much bigger customer value. But also obviously if you’re 20 years younger you use the Internet more. In fact, the Chinese consumer researches 90% of their purchases before they actually make those purchases. The luxury consumer also does more buying abroad rather than at home.
The last thing is, there is virtually no luxury e-commerce in China. When you think about helping a market, not just learn about the brands, the products and the lifestyle, but ultimately helping them find the right product selection online and actually buying those products, it’s a massive opportunity that’s still at a very kind of early level.
What is Bomoda? Is it an e-newsletter promoting and curating products the way DailyCandy and Thrillist do?
There aren't a DailyCandy or Thrillist in China. There are some similarities, but there are also striking differences with those brands. What we saw was an opportunity to build something totally different which is a media platform and eventually a transactional platform to essentially be the Chinese voice for the Chinese but to base it from where the brand, the products and the lifestyle emanates. Right now we have 15 employees. We have 13 employees in New York, two employees in China. All of our consumer facing employees are actually Chinese and native Chinese.
Bomoda's newsletters also speak with a single voice and her name is Chloe. I want to give some credit to our editor-in-chief and my cofounder, a woman named Suki Sun who’s a very successful editor-in-chief in China before she moved to the states. Chloe is that friend within your larger social set who has spent significant time abroad, she’s very cosmopolitan, she’s very well dressed but she also likes to throw dinner parties, she likes to get friends together, she’s very social. She’s a person in a group who’s both happy to introduce people to one another but she’s also happy to give friendly advice to her friends. The centralizing concept behind everything we do is this term shishang, which loosely translated, means the beautiful life.
How many e-newsletters do you have?
We actually have five different editions right now – three are weekly and two go out once every two weeks. The three that are weekly is the flagship edition, global shishang, and that is taking the world’s luxury and beauty and bringing it to you in China. It’s what we call our empowerment edition. It teaches you how to style yourself. It teaches you how to find the right cosmetics, how to put those looks together, et cetera. We also have a U.S. edition. The U.S. edition is focused primarily on retail tourism to New York, Los Angeles, Las Vegas and Honolulu, the secondary cities in Chicago and San Francisco. That uses shopping as the central point because the Chinese consumer actually spends 50% more money when they travel than anybody else in the world. They travel to shop so that becomes the primary itinerary driver, not museums or churches or other reasons that people may visit western cities.
What we’ll do is we’ll create 36 hours in New York City or we’ll create a weekend in Las Vegas and shopping will be the center but then we’ll also make recommendations for hotels, for restaurants or for cultural things like a new museum, whatever it might be, for really cool exhibits. When we do restaurants for instance we might do 10 great new restaurants in New York. We’ll show those restaurants, we’ll talk to the restaurants. But then we’ll actually design a look for you to wear to that restaurant.
You told me earlier that you see Bomoda as a media platform and that you were going to add a transactional platform as well. Is the plan to become a direct e-commerce player, as opposed to a curator?
What we want to do is ultimately help brands sell more online or draw to retail. That means that at some level we have to help them drive more transactions. That only happens when we have greater scale, but we also think it can happen when we start offering tools to the brands that allow them to connect both with Bomoda's owned and operated properties, like our newsletters, but also through which they can push out to Chinese social media platforms that then drive back into Bomoda properties where the brands are then put in the right light.
Is a direct e-commerce model part of the plan?
I just want to be careful about the term e-commerce because I never want to suggest that we’re going to be doing e-commerce. But what we do want to help is the brands transact whether driving the retail or selling online and that means giving them tools to help them do that. It doesn’t mean that we’re going to be taking inventory.
I think the market will see some of the early releases, call it early summer. We’re going to be using some of this for our own benefit in the sense that we’re going to eat our own meal before we offer it to other people and then throughout let’s call it December, the Fall, the winter we’ll be opening that up to the brands, the K worlds, et cetera.
How does advertising fit into the business model or does it?
We are running advertising. That’s been going very well for us. We’ve had campaigns with brands like Ferragamo and Bloomingdales and others. What they typically do is buy into very specific newsletters. The larger goal is to build something slightly different where there’s a media advertising component, there’s obviously a transactional component, definitely eventually but potentially even this year.
Data that we’re layering on top of everything. One thing we didn’t talk about is the fact that we ask our users to take part in a pretty extensive survey when they sign up for Bomoda. We get about 40% of our users to take part in that. We ask everything from obvious things like name and e-mail address to hometown, household income, monthly spent on luxury goods, cities they traveled to in the last 24 months, cities that they plan to travel to in the next year, ideal categories, whether they hold a passport, cell phone numbers. We’re getting pretty amazing data that we think can be very valuable to ourselves as well as to our brand partners over time.
Is native advertising a part of the revenue strategy?
There is an aspect of native advertising here, but that concept is not often discussed. Essentially we’re going to use the platform to create content for our newsletters as well as through our own social media. It’s something that brands and other people could also use to create content back at them to push their own newsletters as well as through social media. There’s a certain earned component to that where brands can use the platform just to create cooler stuff or for some of the other social platforms, but it’s also something that they can then promote to Bomoda’s own distribution channels for a fee.
How do you manage your data? In-house or through an outside vendor?
We’re not quite there yet at being at a level where we have enough data to make it really matter. Our CTO, a guy named Ben Wu, Ben and I had worked together at NBC. He had also been an engineer at Tumblr. He was a VP at FX Trading, BNP Paribas, he built a trading book for Bloomberg so he’s pretty solid on the data front so that’s something that we plan to leverage as we grow.