Left to right: Novelship Co-Founder Richard Xia, Snoop Dogg and his son Cordell, Carro Chief Strategy Officer Kenji Narushima
Earlier in June, Singapore-based Novelship named rap icon Snoop Dogg its new strategic advisor for the sneaker marketplace. According to the company, they were the first brand from Southeast Asia (SEA) to have this kind of partnership with the star.
Snoop Dogg will work with the brand to expand its collections from the current 30 sneaker brands and 40 apparel brands under its portfolio while promoting accessibility to the latest footwear trends for collectors in Asia via Novelship’s platform.
“Through continuous innovation and hard work from our team, we constantly strive to understand our consumers and the sneaker landscape. However, despite market changes, our passion for the sneaker industry has always remained the same,” says Richard Xia, the Co-Founder and CEO of Novelship, when asked about the secret behind securing a high-profile partnership.
“I think having this passion as our core allows us to be closer to our users and of course, people who share the same love for sneakers. With this passion as our foundation, countless years of dedicated work to bring greater value to our users will eventually lead us to high-profile key opinion leaders in the field.”
Founded in 2018, Novelship started as a marketplace for buyers and sellers to trade authentic sneakers, limited-edition apparel, and exclusive physical and digital collectibles.
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“Sneakers have long been seen as an asset, and it still is for trading, especially with the reselling market projected to grow into a US$6 billion global business by 2025. But more than that, it’s becoming the zenith of self-expression – a statement piece that appeals to the collectors emotionally,” shares Xia in a press statement.
“More than acquiring limited releases or drops, we’re seeing more enthusiasts looking at the stories behind the sneakers and prioritising how it suits their individual styles. But there’s still a sense of ‘gatekeeping’ within the community – an underlying judgement to qualify legitimate collectors based on their preferences or the number of pairs they own. By partnering with Snoop Dogg, Novelship will be able to create greater accessibility for veterans, new collectors as well as the everyday Joe looking to sport some new kicks for everyday wear and every occasion.”
In 2022, the company raised close to US$10 million funding round to further expand in Asia Pacific and explore metaverse integration.
Novelship said it has seen exponential growth in the past couple of years with a CAGR of 37 per cent in revenue and 55 per cent in transactions.
Through an email interview with e27, Xia explains the role that this partnership plays in the company’s growth strategy and what is coming up for Novelship. The following is an edited excerpt of the conversation.
Do the back-to-back global crises affect your business? How did you deal with it?
The negative global market sentiment is sure to affect almost every business in some form, and our business is not excluded.
Users’ wallets are getting tighter, and we see that in our users opting for cheaper alternatives. To adapt to changing times, we’ve made a strong push to source for even cheaper alternatives to “hype” sneakers and gears and now even provide an under-retail segment for classic sneakers.
As mentioned, optimising our own cost structure also allowed us the bandwidth to pass on the savings to our users.
What is the role of partnerships like this in your business strategy? What outcome do you expect to achieve from it?
Having a strategic advisor like Snoop not only cements our position as a market leader in the industry but also enables us to gain even more insights into subtle shifts in the market and how we can better value-add with the collections we offer to our customers.
The main outcome is, of course, to not only tap into the credibility and reach of Snoop as a cultural icon but also to tap into his views and insights into how we can provide even more for our ever-expanding user base regionally.
Can you tell us about your revenue model? How did you come up with it?
We realised that there was a gap in service matching and authenticity. Coming from a consumer’s perspective, my co-founder and I always found difficulty in getting the latest drops and authentic products.
We simply seek to match users who’d like to sell, and users who’d like to buy, and to provide a peace of mind for our buyers.
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What is the approach that you are taking to build a profitable business?
Being a commission-based company, naturally, costs are what would determine our profits. With our presence in several different countries, we have constantly developed and optimised ways to reduce our fulfilment costs, from sieving out the logistics workflow that works best for each market and also how to make cross-border transactions even more efficient.
We’ve recently managed to reduce delivery fees in Singapore by almost 50 per cent, which our Singaporean users certainly enjoyed!
Who are your users, and what is your user acquisition strategy?
We have two groups of users, sellers and buyers. Essentially, our strategy is simple. With an established regional network, we are able to facilitate cross-border transactions, enabling sellers to reach customers that they previously couldn’t access directly. For our buyers, we consistently strive to lower prices and have expanded the range of products and collections, creating a one-stop platform for everything streetwear.
What improvements do you plan to implement to your products?
We are currently working on improving the quality of our customer service to users, with changes to our user UX/UI already in the pipeline. Customers can expect a more seamless browsing and purchasing user journey, helping them to sieve through our products for the exact items they want at the prices they have wished for.
We are also strategising on different services across different price tiers to tailor them to varying customer needs and income levels. This includes a tiered mystery box that allows customers to get up to 3x to 10x the value they’re paying for!
What is your major plan for the rest of 2023?
We are confident that in times of uncertainty, so long as we continuously innovate our services and how to further optimise costs, it will prime us to be ready to face whatever market conditions and our customers can be assured that we will always be the best one-stop platform for anything streetwear.
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Image Credit: Novelship
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