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Startup of the day #12. COCOS. How Cocos fashion (Israel) saves customers up to 50% of the cost and strives to become Amazon in the fashion world.

Startup of the day #12. COCOS. How Cocos fashion (Israel) saves customers up to 50% of the cost and strives to become Amazon in the fashion world.

11 Dec 2019

COCOS is a b2b platform for the fashion industry. It unites designers, serial manufacturers, suppliers of the fashion services, traders, buyers and drop shippers, and helps them to become more famous on the world fashion market. Elli Glaybman, a co-founder of Israeli startup, tells how in two years the team united 15000 fashion insiders from different countries, draw partnerships with international opinion leaders, largest dropshipping communities, fashion schools and trade associations.

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Project concept and what problem it solves

For the last 8 years, me and my partners (Nicole Cocksheeva, Tom Linkovskiy) control a Fashion TV franchise. On its base, we opened a Fashionbar nightclub in Tel-Aviv. By developing this project, I got an insight, how the fashion industry works and what designers are up to. Having to know their “pains”, together with partners we decided to create COCOS Fashion. It is a b2b platform, that unites designers, clothes manufacturers, drop shippers, offline and online shop owners, boutiques. In our database, there are about 15 000 insiders. Actually, it makes all these market players visible to each other, eliminates obstacles to build up cross-border cooperation and to provide an international online selling in a quick, easy and secure way.

cocos startup
Click the image to open COCOS Fashion's profile on the Rocket DAO platform 

Let’s face the truth: what are the chances of a Belarusian or any other local designer to be noticed by an owner of a concept-store in Paris? They are slim. To achieve this, a designer must constantly participate in fashion weeks, organize showrooms and search for possibilities to appear in international glamour magazines. Even, if a designer has a team, it requires a lot of time, efforts and money. For beginning designers it is unreal. That being said, there are many stories, when designers gave their fashion units for realization but never received any money, despite the fact of the concluded contracts.

Our startup solves this problem. COCOS platform is a system for searching and establishing reliable business contacts, a tool for creating and processing online contracts, online communication and file sharing, also, a payment system for transactions that we develop on a partnership basis with a payment system provider (in fact, a personalized solution for a specific project).

Besides, we help all participants with establishing local and global networking, clearing up the stock reserves.

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How it works

A showroom owner noticed an interesting designer and he is ready to take a part of the collection for realization. But before this, he has to be sure, that things are of good quality, the designer is able to provide the necessary size range and number of units. By all accounts, they need to meet and discuss things. Earlier, you had to take a plane and fly to another country or this. Now, it is enough to visit our website, learn about a designer from his profile: here a designer describes the specificity in detail, including the working tirage.

Entering the cabinet, designer and retailer can discuss all conditions and sign an electronic contract, that fixates all-important nuances. Document preparation is fully automatic. All communication, that is conducted on the platform in the chat is also saved and can serve as proof when appealing as with Airbnb (it cannot be deleted).

After this, the shop owner submits the payment — for the entire shipment. COCOS platform freezes this payment for 35–45 days. During this time, the designer sends the necessary collection units via post. If the received production meets the shop owners requirements, then the sum is unfrozen and sent to the designer.

In such a way, we do not interfere in the negotiations in any possible way but we give financial guarantees to both sides, that at the end of the day, they will have what they want. We only interfere, if there is any problem. Also, we can apply punitive sanctions. For instance, we can countermand the order, if a designer doesn’t answer it in 24 hours, or hide the showroom if the shop owners behave indecently.

Thanks to the platform, designers and shop owners save up to 40–50% on advertising due to the fact that the platform promotes itself (designers and the shop owners don’t need to take care about it), and offers business partners (so, you do not need to spend money on network development, business trips, etc.). Many marketplaces have paid subscriptions — at least, to one of the parties of the deal. COCOS fashion commercial commission is quite loyal to manufacturers.

Elli Glaybman, CEO COCOS Fashion

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A business model and how project’s unit-economy looks like

We only make money on the commission from the trade transactions. We take 15% per transaction.

Our main goal, for now, is to work out the functionality, by doing it as convenient as possible and useful for the users, before scaling the project stage-by-stage. In particular, the improvements are now aimed at maximizing the selection of business categories that are represented on the platform, and at creating a mobile navigator application.

For this purpose, we cooperate with users, many of which are some kind of ambassadors of the COCOS project. I always say: we don’t have clients, we have partners.

An international team works on the project. Its biggest part (Creative, biz dev and fashion department) is in Israel, Ukraine and in European countries.

Ukrainian designers — clients of COCOS, on a meeting in Kyiv

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How did you enter the market and promote the product

We entered the market with a product, that was named My Cocos — a virtual cabinet for negotiating and concluding deals with integrated paying system.

I decided to enter the market through schools and designer communities — communities in social networks and offline. Those are the insiders’ communities of our strategic partners, like IFT association, Shenkar school, which is in the world’s Top-10 fashion universities.

All our client databases are built on a partnership basis — we have concluded partnership agreements with largest dropshipping communities, fashion schools and trade associations. So, in general, at this stage, we do not process inorganic traffic.

COCOS Fashion team

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Plans

Recently, we presented a new service — “The Providers”. By this, we mean other representatives of the garments industry: fitters, tailors, manufacturing engineers and etc, who can cooperate with designers and garment manufacturers. As the fabrics and labour are expensive, it is difficult for designers to compete with large players. We give a solution: they can outsource part of the work to providers. Here, the working scheme is similar.

The second stage of project development is the launch of the navigation system F-Touch, where all showrooms from all around the world will be presented. The thing is that not all of the showrooms are visible on the map. Somebody has his studio in the apartment, and this goes with the best quality and a decent level of production. So, you can walk along the street in any city, in search of fashion boutiques and not even know that there is a showroom literally over your head in the house where you can buy products from the manufacturer at a better price. With F-Touch application, any registered COCOS user will be able to mark geolocation of his business, and when a buyer opens an application, he will see all shops, showrooms and brands near the place of the current location. This is an amazingly convenient tool, both for the seller and for the end-consumer. It has extrinsic value for those, who go on fashion tours in other countries.

Our global goal is to upend the vision of the world fashion industry, by making it wholesome and each insider visible on the world map of fashion. Also, to give a possibility to young and beginning businesses to develop their brands and make their dreams come true, but not to start a career in a large company.

COCOS is our project and will be so to the very end. We do not have any thoughts of selling it to Google or Amazon. We are striving to become Amazon in the fashion world.

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Hardships and pieces of advice to other startups

  1. For a long time, I didn’t manage to attract investments. I didn’t understand why is it so difficult? The fashion industry is the second largest in the world but still, it is not that popular for investments. Often, startups are told: “It is not ours, it is not our level of investments” and etc. Nevertheless, in the working process I came up with one funny phrase: Your No builds up of our success. So this became my motto. And every time, I heard “No”, I was saying: “Thanks a lot, your No is 50% of my success”. This was a hook, that’s how I stood out of the crowd.

  2. Tony Hsieh, the CEO of zappo.com, once said a great thing: “Stop chasing the money and start chasing the passion”. It is believed that this approach is fully justified. In the first place, COCOS is a project that is aimed at opening the possibilities and changing the industry into better. Only by making your dream come true, you can become truly successful.

11 Dec 2019

 

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