Third-generation Chinese-New Zealander Jessie Wong, 26, founder of one of Commercial Bay's new Kiwi retailers, talks about starting her handbag business Yu Mei while studying at the University of Otago and how technology will revolutionise the retail sector.
What does your business do?
Yu Mei (my middle name) is a handbag brand that started about five years ago when I was studying at the time, I studied fashion down in Dunedin, and that's where I started to make handbags even though I studied clothing. Today, it has retail shops in Wellington and most recently in Commercial Bay. Our minimalistic bags are made from South Island-farmed and tanned deer napa leather.
What was the motivation for starting it?
I started Yu Mei because I couldn't find a bag that could carry everything that I needed in a day and it was really frustrating to me because I really felt like the handbag market hadn't caught up to modern working women and the fact that they might be carrying a laptop and an A3 visual diary, their keys, chargers and makeup bag. Every single Yu Mei bag is named after someone close to us who had a need that wasn't being met.
How much did you invest to start the business?
To start this business I won an AMP scholarship that was $10,000, so that was all of my starting capital to begin with. We have been quite a slow-growth company so we've done everything ourselves and built everything up based on our sales. We do bootstrap everything quite a lot and I still own 100 per cent of the company, we haven't had any outside investment. We're in a really strong position at the moment and we're quite happy with our rate of growth so we won't be looking for any external investment.
How big is your team?
We took on our first team member, a production manager, about eight months after launch in 2016 and today we have 11 fulltimers.
How has the Commercial Bay store been received?
The retail category defying consumer confidence predictions
ASX-listed Aussie footwear giant's aggressive NZ expansion plans
Kiwi retail firm plans to open 20 stores in Australia
It's been really positive and successful in its first few weeks, I've been completely blown away by the success, especially so quickly after lockdown and in a big precinct like that. Commercial Bay had something like 250,000 through in its first few days of trade and that was definitely reflected in our individual store's foot traffic.
The Commercial Bay store is our second location, about twice the footprint of our Wellington flagship that we opened in August last year. That was our first store front, foray into retail and the focus of that space was to offer an experience for people to come and learn about the brand and the process of how the handbags are made, that aspect of it is really important to me as I made our first 500 bags myself and I've always been a stickler for details. The space was designed to be a Yu Mei lounge where people can come in, have a drink and learn about the brand, and we're expanding this out to Auckland with the Commercial Bay store. Our bags are priced from $200-$300 mark-up to $1500.
What are your long-term plans?
We have big plans to grow. We are looking at opening another store front in Auckland before Christmas, after the first couple of weeks of Commercial Bay and seeing the reaction it has validated our plans. The majority of our business is conducted online, but Auckland is our largest market. We're also looking to grow internationally. We were looking further than Australia pre-Covid, Hong Kong and the United Kingdom, and now that Covid has hit we're looking more towards Australia. The other markets, along with LA and New York, are more longer term.
At present, we're in massive growth mode. The first three years of business was us learning the DNA and developing our style and where we wanted to grow. The last two years has been the beginning of growth for us and now that we have a more world-class supply chain we're ready to take the next step.
How has Covid-19 and lockdown impacted sales?
It has affected Yu Mei positively. We have a really strong community and they really came to the party when Covid-19 hit, and we've just had our strongest quarter ever. It also caused us to very quickly see things in a different way; when we were all at home and only had our computers we ran an online archive event and we tried to make everyone who attended that day feel like they were in the same room as each other. It was a very different approach for a digital e-commerce platform - we had a photo booth in the event room, effectively a shop page. I was on Instagram live, my team was on Zoom and customers could ask questions in real time, there was a tracker so we could see how many other people were online with us, there was a waiting room and we had 11,000 people shop with us across that day - that was just a couple of weeks into lockdown.
How will technology revolutionise the retail sector?
The changing face of retail is everybody's guessing game at the moment, but we're looking at more of a community and thinking about e-commerce and what that is going to look like in a world where you can't travel, or if you can't even leave your house. I'm really interested in game-fying the brand experience. For example, you might buy a bag from a store and it might have a really great loyalty programme that keeps you coming back and you might make friends with some of the shop assistants, but for us we're looking to create more of a narrative and story so that you come along online on a bit of a journey with us throughout your interactions with the brand; we're still fleshing out all of the details but want to have things like instead of the physical Yu Mei lounge, it may be virtual with a 3D lounge that people can visit us in - there's lots of angles to explore within this world.
I know Commercial Bay is the story at the moment and foot traffic and sales are amazing, but really shop fronts should be all about marketing where you can touch and feel goods, but we consider the biggest area of growth is in the digital space. We're having meetings about our virtual Yu Mei lounge - the Internet is infinite and there's so much possibility that hasn't been tapped yet.
What advice do you give others thinking about starting their own business?
Nobody knows what they are doing until they are doing it so just get started. Everything is changing all the time, and if you start something without all of the background of having done it for another company, you often see things in a different way that might be easier than the blueprint of how things were done before.
There's a certain advantage to not having a blueprint in your mind of how things should be done and instead thinking what's the best and most efficient way that makes sense to me and doing it that way. Leadership is all about undoing things that were done previously.