CEO of DeeZee: Taking risks can pay off in new markets
Written by: Olga Pijanowska
DeeZee is an online store selling affordable women's wear, footwear and accessories for any occasion. It was founded in 2005 by Dominika Zac on the belief that fashion should be a right, not a luxury.
Founded in Poland, the company currently sells across 16 markets and this year plans to expand into new regions including Croatia, Greece, Slovenia, Italy, Austria and France.
Nearly 20 years into its growth story across Europe, CEO Maciej Marchwicki talks us through the different strategies the company implemented to unlock Eastern and Western markets, localisation tactics and taking risks that pay off.
“Some markets surprise us with their scale, which from a demographic or e-commerce market perspective should be much smaller,” - Maciej Marchwicki, DeeZee CEO.
Localisation: Not just websites but products
DeeZee’s strategy for localising its offering for new markets is twofold: start lean and be prepared to adjust the product offering.
The team first prepares the entire back-office to be able to launch quickly. They do this with a very lean set-up with automatic translations and logistics done through intermediaries. Then, when they have the scale, they can switch to local solutions such as local couriers, local logistics hubs and proper translations.
“We are also learning to adjust the product to each specific market during this international expansion,” he says.
For example, they have experienced that in Ukraine winter shoes require much more insulation than Polish customers would want to have. He says customers in eastern markets are also much more daring when it comes to fashion, and something they adapts its product offering too.
For DeeZee, localisation is more about getting to know the tastes and desires of shoppers on the ground and tailoring its product offer to local customer expectations than one-to-one translation of its website.
Market research only tells half the story
Like any brand entering a new market, DeeZee invests in deep research of consumer behaviours but Maciej tells us that sometimes it's worth taking a risk and launching in different markets, even seemingly less attractive ones.
This was the case with Slovakia which turned out to be a very nice surprise - sales there are much higher than they could have expected at the beginning.
At the outset Deezee crunches data provided from Google and Facebook about the market, analysing demographics, consumer behaviours and all the reports that are available. However in his experience, the data and recommendations they get from their business partners don't always align with reality.
“For example, some markets surprise us with their scale, which from a demographic or e-commerce market perspective should be much smaller,” he says.
“Slovakia, for instance, is a significant market for us, although the reports would indicate that other markets should be more attractive to us. This ‘reconnaissance by force’ has its advantages in that we can sometimes be positively surprised.”
Eastern v Western Strategy for marketplaces
Like many online retailers, deciding what relationship they should have with big online marketplaces poses a big question. DeeZee has a totally different strategy for Eastern versus Western markets.
In Poland, DeeZee is not present on Marketplaces. Its offering is available only through its own store, plus CCC and online shoe retailer e-obuwie.
“We don't want to hand over our brand recognition to entities like Allegro or Amazon,” he says. “Here, we believe that being a monobrand and investing in our own store brings much greater benefits.”
In the Western markets, however, DeeZee’s strategy is to integrate with marketplaces to build brand most effectively. The company has a presence on Zalando and is in talks with other players like About You and Amazon to enter their platforms.
“Western markets are much more difficult and expensive when it comes to building awareness, so we'll try to sow our presence there through marketplaces,” he says.
He says its current collection dedicated to Zalando is performing very well, generating real-time data about which products sell, at what price levels, to which countries and what return levels they have. He says Zalando provides excellent reports, and based on that, the team can make decisions about entering specific markets step by step.
“That's the strategy for the West,” he says. “The strategy for the West is to do it through Marketplaces. The strategy for Central Europe and the East is to open our own stores and build the brand, as marketplaces there don't have, with some exceptions, as much exposure to help us build that brand. We prefer to do it ourselves.”
Localisation, localisation, localisation
Each company’s international growth story is unique but the conclusion often seems to be the same: true localisation is a process that simply takes time and care.
In DeeZee's case, it's about being prepared to use different strategies, spend time localisation products to customer wishes on the ground and being prepared to read between the lines on pre-launch market research and take a risk.
Thank you Maciej for sharing some of your key learnings from DeeZee’s story with us and welcome to the community!
This is the latest story in our series where 50+ top e-commerce professionals share their learnings on market expansion tactics, localisation and technology across markets with our learning community. Check out the full collection here for more tips.