Showpo founder Jane Lu reveals secret to $85 million fashion empire
Just ask any entrepreneur — starting a business isn’t easy.
It involves a lot of work, commitment and perseverance — perseverance to keep going even when you’ve failed.
Jane Lu, the founder of one of Australia’s biggest and fastest-growing online fashion retailers Showpo, knows about setbacks and business failures all too well.
In 2017, the company turned over a comfortable $30 million. Today, that figure has more than doubled to $85 million in revenue — but it didn’t come without many lessons learned.
Ms Lu could have given up when she launched her first business idea in her hometown of Sydney due to its business model.
“I used to run pop-up stores throughout Sydney where I would give emerging designers a platform to expose their brands,” Ms Lu told news.com.au from LA, where she has scored her first international pop-up store.
“But the business model didn’t work, and for me, I learned that no matter how hard you work and the passion you have for something, if the model doesn’t work it can cost you.”
All of a sudden, the then 25-year-old had gone from a job in corporate finance with a great career trajectory to being in debt and unemployed, with a failed business.
But it didn’t stop the now 34-year-old from pursuing another idea — a business that is now raking in $85 million in revenue — Showpo.
Being an only child and the daughter of Chinese immigrants, Ms Lu refused to tell her parents what was happening, as job security was a big deal for them.
And so she plugged away at her new business idea for the next six months at local cafes and libraries — people just assumed she was going to work.
Ms Lu went on to build a tiny business into an online fashion phenomenon — she started by getting clothes on consignment from manufacturers (they didn’t have to be paid for until they were sold) and paying her models in clothes instead of cash.
“A lot of factors were involved when we first started. It was definitely luck and timing, as when we started back in 2010 we were still part of the first wave e-commerce stores, and having no funds at all, we learned how to go grow organically,” Ms Lu said.
“From there there’s been a bit of social media, which took us on the next big wave, and from there it is all about hiring the right people and having an amazing team who work towards a common goal.
“The biggest mistake is hiring the wrong people — you really have to experience first-hand and learn your lesson just like everything with a new businesses.”
In its early days, the business was called Showpony — and Ms Lu never thought it would be such a success, let alone a global hit, and so she never bothered searching Google to see if the name was taken — but it was taken by an American brand and she was forced to rebrand it to “Showpo”.
“I didn’t think we’d grow that much. When my first business failed, I wanted to be a success but I never thought like this,” she told news.com.au
Apart from those mishaps, Ms Lu said simple mistakes like lack of number analysis also led her to lose big money — she even released an honest Vlog talking about all the woes, including glitches with coupon codes and warehouse orders.
“One December I thought we were killing it because the sales were rolling in at an all-time high. It wasn’t until I actually looked at the numbers and reviewed our margins the following month that I realised that we over-discounted and our cost for acquisition was too high — I should’ve looked at our numbers much sooner,” she told the Daily Mail in 2017.
“I always check numbers now. I look at our sales daily, our stock expenses weekly and overhead costs monthly. And I review it comparing with the prior month, the prior year and keep an eye on key ratios.”
The 34-year-old admitted she never considered herself an entrepreneur — let alone starting up a business on this scale.
Ms Lu went on to become a regular on SmartCompany’s Smart 30 Under 30 list having also come third in the company’s 2014 Smart50 Awards — and, as time went on, her sales went up.
Her young, mainly female staff continued to post selfies of themselves at parties wearing the latest gear — and her mainly millennial cliental wanted in.
Showpo’s Instagram page now boasts 1.5 million followers and has more than 5000 different styles, with 80 per cent of it being their own brand — which is designed, produced and made in-house in Sydney.
Ms Lu said apart from social media being a strong driver of growth early on, the business’s success also came down to a strong marketing strategy — something she learned the hard way with her failed pop-ups.
But now she has come full circle.
Apart from Australia contributing to the bulk of her sales, the US is her second biggest client — and she’s currently in LA at her first pop-up store on the popular fashion strip, Melrose Avenue.
It launched on Saturday, March 9, with the opening attracting a slew of celebs and influencers, including dancer Maddie Ziegler, who known for starring in a series of music videos by Sia, and American DJ, model and YouTuber Chantel Jeffries.
“I have come full circle with the pop-ups,” she said, adding Showpo has experienced 48 per cent year-on-year growth in the States, particularly in California.
“Our initial growth in the US was driven by social, and when we recognised the potential here, we adapted our sourcing strategy to complement this (by investing in a USA-based warehouse solution).”
“Essentially, the primary objective isn’t profit, it’s prominence, and we’re using a retail presence to establish and reinforce brand and purchase confidence in the USA.”
Ms Lu has no immediate plans to set up office in LA but instead will look to do her best remotely with her now more than 40-people-strong team.
Part of the project also involved creating a space, the Showpo Cafe, for shoppers to share their own content journeys on social media.
Having not dabbled in bricks and mortar since the business’s founding days, Ms Lu’s approach to retail is decidedly marketing driven.
Her advice to anyone wanting to start-up a business is “go for it”.
“I don’t want to sound too cliche, but I tell everyone to really go for it. You learn so much once you start,” Ms Lu said.
“For me, had I not failed at doing this I would have ended up working for a brand like Showpo.
“But even if I fail at Showpo now, I feel it would have been worth the experience and journey.”
Ms Lu is also the co-founder of the popular online community group Like Minded Bitches Drinking Wine, which has more than 100,400 Facebook members.
Originally published as Failed business to $85m fashion empire