Motle is an online fashion, beauty and lifestyle magazine that is complimented in the short run by an online store that sells apparel and beauty products as well as being complimented in the long run by a mobile app that acts as a personal stylist to the user as well as enhancing the users shopping experience through the motle virtual mall. Motle was birthed as an idea in 2013 by siblings Stembile and Boris Brian Mukwambo. The idea was birthed as a solution to the need for an exhibition of the afro-euro centric fashion identity that, many 18-35 year old Africans who are in LSM 6-10 identify with. The founders love for afro-euro centric fashion that their 21st century peers showcase on a daily basis made them want to create a brand that highlights that side of Africa through the exhibition, selling, and showcasing of Afro-euro centric designs and styles whether it be by a designer from Senegal or a make-up artist in the diaspora. The motle business finally became operational through the launch of its online magazine on the 20th of June 2015. Our main aim is to launch the online store in the short run and consequently the mobile app in the mid-long run.
Motle is offering services to four main groups. The first being the online magazine’s readership, the second being customers that buy apparel on the online store, the third being advertisers that wish to advertise their business on the magazine, store or app. Finally we will offer services to African designers that wish to sell their products on the motle virtual mall which is a feature of our motle app.
In order for us to make our brand a reality we are in need of funding worth ZAR 2 250 000. 25% of this money will be used as a 3 month working capital. This working capital will consist of site maintenance, insurance, salaries, advertising as well as data expenditure. The remaining 75% will be used to procure inventory for the online store: www.stylebymotle.durban which will consist of apparel, accessories, bags, shoes and beauty products as well as app development. We will have a 25% markup on all products that are sold on the online store. Through the usage of the NPV profitability analysis method, we see that our NPV is ZAR 313 108.11. As it is a positive NPV this shows that it is a profitable investment for any investor who would be interested in investing in such a venture which is in the online retail sector which is growing 26% year on year according to www.worldwideworx.com
Our target market are the 18-35 year old trendy university students and young professionals who are in the LSM 6-10. These consumers are interested in trending items from fashion to money matters as they are plugged in to information sources through their social media that they access using their smart phones/tablets as well as personal computers. They learn new street talk, make up techniques as well as get inspiration for different looks via their Instagram, Facebook and Twitter accounts. That is why we shall advertise using social media and guerilla marketing which evokes excitement, trendiness, engagement and creativity to those who will be exposed to it. This we find that our target market can easily relate to and find to be inspiring for them to engage with our brand.
We shall use different methods of pricing that are highlighted in our marketing mix which are psychological, penetration, promotional and competition. We believe that these methods will allow us to price our products competitively in a growing sector. With our aim and goals being to highlight and bring forth exposure to the afro-euro centric fashion identity through the designers who are the creators and the customers who are the consumers using our brand, to create jobs and boost the African Fashion industry, to supply our target market with affordable trending clothing and accessorize as well as to offer a platform for up and coming as well as established designers and to be a platform for businesses to advertise their products, we believe that we are a profitable and sustainable business that will offer a good return on investment for any investor.
GENERAL COMPANY DESCRIPTION
Motle means “ beautiful” in sisotho. This name encompasses all that our magazine stands for and focuses on which is to accessorize the beauty of all our readers and customers. motle is an online fashion, beauty and lifestyle magazine that in the mid-term will be complimented with a mobile app that promotes and highlights new and existing fashion designers on the African continent. It aims to exhibit the Afro-euro centric view on fashion, beauty and lifestyle that is evident amongst the 21st century African populace, be it through retailers, designers or the ordinary person on the street.
The magazine [ www.motle.durban ] comes with the following pages and categories:
This page with its’ 8 categories, showcases the week’s fashion industry events in Africa and around the globe, with the focus being on African fashion industry events and participants. An example being that, in the Trendsetter category, we may profile models such as Kenyan born model, Flavianna Matata. In the Edu-Hub category we may write about “how to get your wallet sale ready” because educating our readers on financial matters will equip them with the tools to live the kind of lifestyle they desire.
Fashion show calendar
This page focuses on the trending beauty styles that week from highlighting and contouring, strobbing and baking make up techniques. We bring to light the how tos and the whys in make-up application so as to make our readers trendy in every aspect of their beauty regime. An illustration of this is the daily “style by motle” outfits that we post on our social medias. Please check APPENDIX 1 for examples of our : work, casual and night time looks. In the mid-term we aim to sale the individual items that make the looks on our secondary domain [www.stylebymotle.durban] which will be our official online store.
Style by motle
Yays and Nays
HEALTH AND FITNESS
The 21st century 18-35 year old is concerned about their health. They aim to live a healthy lifestyle through healthy eating and exercise. With so many at home workouts that we see online especially many workout routines posted on Instagram as videos or how to images, we found it best that we cater for this growing demand in healthy living. This we do by posting work-out videos, profiling work out wear such as trainers and work out bras as well as posting healthy, low calorie recipes as the adage you are what you eat is very close to our hearts.
We are sexual beings and as such we are always looking for ways to improve our sexuality whether it is through sexy lingerie, the experimentation with sex toys or from the art of sexual intercourse itself. That is why, we at motle, make it a point to profile all the parameters that make for a healthy and satisfying sex life for the ordinary person with lingerie, toys and sex tips as our main focus.
From the day they are little girls, all women dream of their perfect wedding with their prince charming. They have everything from the dress to the cake and venue decided upon even before they meet the ONE. To help them in making their dream come true, we profile all things wedding from the trending wedding cake for their theme, dress for the season and décor making sure that both the bride and groom have the best day of their lives on their wedding day. We know and understand the fact that a wedding day is made even more special with the anticipation and ultimate enjoyment of the honeymoon, which is why we profile the best honey moon destinations that Africa has to offer, from the intoxicating and breathtaking Safari destinations such as Sabi Sabi Private game reserve to beautiful and romantic beach resorts in Ghana.
The MOTLE LOVES page, show cases the things that we loved that week. From our countdown that lists the 5 must haves for that week , to the staples such as fragrances and vintage pieces such as 1950s dresses that have made a come- back. Our blog that is written by Ste Babur Maya , brings about the humorous and witty nature of the topics covered that range from bad weaves to relationship woes that she touches on always bringing a touch of humor and wit that our readers have come to love and expect from her.
THE MOTLE APP
The motle app is our mid-term goal. It will allow for a more personalized relationship between our readers and the retailers they frequent the most. Our readers once they have the app will get updates on the latest apparel in store in relation to their individual fashion personalities and body shapes as well as size. The app will also act as a personal stylist through features such as the weather forecast which will give 3 outfit options from the user’s closet based on the weather forecast of the day. For instance, the weather could be 27 degrees Celsius, and the user has uploaded summer wear onto their app wardrobe, which is an in app purchase feature on the app. The app stylist will put together three looks as options that the user can pick ensuring that the user has a trendy look based on items they already have. This is something that most of us wish to have, our very own stylist like the ones that celebrities have, now this can be possible with the motle app.
The user has a profile where they enter name, fashion personality, body shape, sizes (shoe, bra etc), location, retailer they frequent the most e.g Mr Price, Woolworth etc. There are lists of fashion personalities for both male and female eg bohemian, minimalist, classic, bombshell and body types for both sexes e.g apple, hourglass, banana etc. The user will click on the icon and the personalities and body shapes appear as avatars on a catwalk with photographers taking pictures as if on a fashion show. It also gives examples of celebrities with same body shape and fashion personality so that our app users can identify with their favourite celebrities. With many more features that are in app purchases and free the app ensures that with motle ,our users are always looking trendy and well styled regardless of what they have in their wardrobes.
On the app as well as on the online store and magazine, our users are able to get updates on the latest posts on the website, they are able to buy clothes, shoes, accessorize as well as make-up and hair essentials from our online store. On the app they are also able to interact with other users as well as comment on the posts that they like.
Motle’s mission is to highlight the afro-euro centric view and adaptation of all things fashion, beauty and lifestyle for the 21st century African 18-35 year old. The emphasis is not just to highlight what is trending but to make it available for our readers on our online store thus giving them access to the beautiful and unique designs by African designers for the African populace and beyond.
Motle’s main goal is to be a world leader in the fashion, beauty and lifestyle sector. This we believe we can achieve as our magazine is not only complimented by the mobile application but the application in itself is the flesh to the skeleton which is the online magazine. This allows us to increase our market share and increase our interaction with our customers which is vital in an industry where there is a lot of competition in terms of print magazines, fashion related television channels and fashion blogs. Increasing customer interaction with the mobile application will give us a comparative advantage over our competitors. Our clientele is able to link the fashion styles and tips that are show cased in the magazine weekly, with what is available in their favourite retailers that they frequent the most as illustrated on their profiles on the mobile application. They are able to keep track of their fitness journey with healthy recipes, exercise tips and of course the best trending work out apparel available in their retailers of choice. With these and many features, we believe that our goal of being a world leader through close reader interaction will be achieved in the long term.
Our second main goal is to expand. Africa is full of potential that needs to be developed and South Africa is the gateway to Africa. Africans express their culture through the way they dress.....through their fashion personalities. In expanding motle into the greater African continent we will be able to show case more of the African vision of fashion, beauty and lifestyle. This show case is targeted more on bringing awareness of our designers so that the world and indeed Africans themselves get to appreciate and buy African designers' apparel and accessories. We believe that through this we are able to facilitate job creation especially in the textile industry. In being a platform that connects the target market to the designers and retailers we are bringing more awareness and boosting Africa's textile industry which has been on the decline especially in the South African context. In a continent that has a low labour absorption rate, this will boost entrepreneurship activity in the African fashion industry and thus creating jobs.
Our third main goal is to open our very own online store that sells motle merchandise. The merchandise will constitute of all “ style by motle” different look items. These include bags, shoes, clothes , eyewear and jewelry. The products will be proudly made in South Africa so as to create employment and boost the economy of our community as a whole. We will source as much of the raw materials that we can locally and import the rest from across the continent if the need arises. In due course we aim to employ in house designers that will create clothing that our target market can relate to and wish to have as part of their day to day wear. The design teams will constitute of male and female apparel design teams, male and female foot wear design teams, eye wear design team, jewelry design team, lingerie design team and a bag design team. These will form our in-house fashion department. Our long term goal includes having our own beauty team that will create beauty products that will suit the skin tone and texture of African women and men regardless of race and ethnicity.
Our fourth goal is to be able to offer an online virtual mall that comprise of the top 30 retailers that our users frequent as well as established and up and coming designers. This number will increase as we expand and the retailers being offered will be location specific. We aim to offer free delivery for all purchased goods in South Africa and for the rest of the world they will have to pay for shipment.
We at motle believe that the only way we can reach our goals is to make sure that we set realistic objectives that correspond to the industry , the South African and in due course the African economies as a whole.
Our first and foremost objective is to be able to provide a service that offers customer satisfaction and indeed be a complete customer solution based service. It will offer all the requirements and needs of the end user and overall, offer a comprehensive solution to their problems. In being a customer based service, we believe that we will be able to acquire and retain our customers. This through recommendations, word of mouth and advertising both traditional and social media adverts will enable us to build a strong and popular brand amongst our competitors.
Our second objective is to build a brand that is synonymous with customer satisfaction, excellent and innovative product lines and above all else the answer to all the end users’ needs when it comes to fashion, beauty and lifestyle mobile apps and online magazines.
Our third objective is to be the product leader in our industry. This we aim to achieve by offering a lock-in strategy that will allow our end users to be able to use the online magazine as a link to the mobile application which complements it. We will also achieve this by offering low prices and incorporating ways in which we minimize our costs as an organization thus enabling us to offer our end users low prices on our products as we strongly believe that looking fashionably chic should not cost one an arm and a leg.
The exit strategy for the founders is one of our top objectives as a company as this signals a change in leadership that our investors and employees will be interested in. As this is a family owned business, the Mukwambo family will have majority shareholding of the company for as long as it is in operation. With the retirement of the founders we plan to employ a competent CEO and management team who have experience in running such a business and who have the firm’s culture and objectives in mind so as to enable a sustainable business model that will allow the business to have an industry acceptable growth rate over the years.
These objectives will enable us to provide a cost effective product that will offer a complete solution to our customers’ needs. In thus doing, it will increase customer satisfaction which will lead to an increase in customer retention, website conversions and good referrals. This is all translated in an increase in sales and thus revenue.
THE motle PHILOSOPHY
The main reason for the establishment of motle was stemmed from the fact that African designers did not have a large platform in which they could exhibit their designs and very few are well known compared to their Western counterparts. To address this issue we thought of motle which highlights and exhibits African fashion and consequently African designers.
Another reason was the declining textile industry in Africa with many designers and retailers opting for Asian labour markets. This exacerbated the already declining labour absorption rate in that industry and in the economy as a whole with South Africa being a case in point. Seeing that many of our youths are unemployed, boosting the South African textile industry is another way of creating employment. This is very important in a country with a high unemployment rate with 70% of its residents whom are between the ages of 18-24 years of age being unemployed. Thus what is important to motle is just not to offer a state of the art service but also to create employment. This we feel is of paramount importance if we are ever to alleviate poverty, crime and inequalities in South Africa and the continent as a whole.
The financial well-being of our target market is important to us. We believe that by boosting the economy through small businesses like our own, we create jobs and thus improve the living conditions of the people. This is translated into more of the populace being banked, having an increase in disposable income, an increase in their marginal propensity to consume and ultimately their ability to purchase more of goods such as apparel. This results in an increase in revenues for businesses such as ours and those of our counterparts and partners.
INDUSTRY & MARKET CHARACTERISTICS
Although online retailing is still in its infancy in Africa, a lot of retailers have started to notice an increase in their online retailing revenues. Sites such as spree.co.za, zando.co.za and heels.com have become household names. It has become easier for people to purchase trending clothing and accessories with the click of a button using their devices in the comfort of their homes.
The online retail landscape in South Africa has been growing in itself. An example of this is seen with the release of the World Wide Worx data on online shopping. It’s MD Arthur Goldstuck has said that online shopping has stayed in line with forecasts that have been done over the past few years. For instance the forecast for 2013 was that the online retail market would be worth R4.225 billion, but it surpassed that to become R4.4 billion at year end.
The estimates of online retail market worth for the three largest economies in Africa as per 2015 GDP estimates are:
Nigeria with a 2015 GDP estimate of $657.218 billion has an ecommerce sector worth $13 billion as per the survey done by This Day, a Nigerian based business news website. This is mainly due to the increase in the country’s population that now has access to internet either through their smart devices or PCs. The increase in users and hence participators in online retail has translated to an increase in sales by online retailers such as Konga.com and Jumia.com, which have increased from just 1,000 per day in 2012 to 15,000 in 2015. Thus the value of daily transactions has grown from $35 million to over $550 million. This translates to over $2 million worth of transactions per week for some retailers.
South Africa with a 2015 GDP estimate of $352.528 billion has been estimated by World Wide Worx who together with Master-card, monitor South Africa’s online retail market to grow 26% year-on-year in 2015 to reach a market size of R7.5 billion. The country’s total retail market size is forecast to be R807bn this year.
Egypt with a 2015 GDP estimate of $ 324.267 billion has an overall penetration rate of e-commerce in the Egyptian population of 3.4%. But, Egypt’s online purchases are expected to more than triple by 2016, with Egyptians spending as much as $447.3 million on e-commerce, according to Euromonitor.
With such attractive numbers, it is clear that the online retail sector of the African continent is a fertile ground for growth and investment thus we feel strongly in the profitability of our company. As an online retailer as well as an online magazine we feel confident that the upward trend of internet usage, online shopping and confidence in the process amongst our target market [ 18-35 year olds, in LSM 6-10] will translate as sales and thus profitability for us.
The online clothing retail market as well as the fashion industry media sector is a very competitive sector. There is such a high level of competition that unless a business finds a niche that will separate them from the rest, they will become just like the other many choices the customer has at their disposal. With that in mind, we saw that many clothing retailers sourced their products from mass production factories in India and China. This has resulted in a saturation of Chinese clothing being sold in, on and offline stores all over Africa. These stores sell low quality, almost identical, cheap products that appeal to consumers on the lower income end. Fashion media, we saw, mostly focuses on the trends that we see in the Western countries and very little coverage is given on African inspired fashion and beauty trends. We realized that the African designer had a very small platform to showcase and thus sell their products to their early adopters who are the African consumers. Thus there was a gap between the African designer and their target market, there is a gap between the African fashion industry, beauty industry and its audience, who are the African consumers. African fashion industry produce was not being consumed by its target market and if it is, it’s at a lower rate than expected since it is mostly western influences that are communicated to the African fashion enthusiast.
In order to fill the gap between the African fashion and beauty industry and their audience, the African fashion and beauty enthusiasts, we created an online fashion, beauty and lifestyle magazine that we called motle. We see this as an African solution to many of the 21st century afro-euro beauty and fashion queries that our target market encounters. These include maintenance of afro hair, how to take care of their skin in the harsh African summer weather, to bleach or not to bleach or how to dress for that African wedding as well as the African view of sexuality and sex. Although these are universal issues that anyone from any part of the globe experiences, the experience and resolve and the logic behind differs with culture, religion and tribal links.
In order to fill the gap between established and up and coming African designers and their target market, we will be the middle man between them and their target market. This we will do through our online store and the motle online mall where designers can sell their products in the virtual stores they can rent from us. Because we already have their target market as our audience, it will be easy for them to reach them and increase their sales as well as brand awareness.
In order to fill the gap between the African consumer and affordable clothing that personifies their afro-euro centric view of fashion, we will have a motle clothing line designed by our very own in house African designers. As they are African, youthful and trendy themselves, they are the best people to capture the afro-euro centric fashion identity of the 21st century African 18-35 year old in LSM 6-10.
Selling products directly to the customer
We are providing a platform for designers to sell their products thus reducing their operational costs such as brick and mortar store rentals, store staff etc, which translates to lower prices for our customers
We are an online store, therefore accessible to anyone and everyone
National and international shipping of customer purchases available
Through the app we are able to bring together many retailers in touch with their customers through our customer profile and store notification feature as well as through our online mall feature
In-house designers who understand our brand
Desire of shoppers for African fashion
Desire of customers for a portable personal stylist on their phones/tablets.
Desire of customers for a one stop shop/virtual mall, where they can shop for all their favourite brands and discover new brands in the form of up and coming African designers without leaving the comfort of their homes or on their phones as they are on the go.
Potential exists of Latin America and Middle East expansion of the brand.
We have no partnerships or strong relationships with clothing retailers
High shipping and customs costs
Short staffed when it comes to inventory management
Prone to be affected adversely with any strike action by unions in the retail and textile industries
Foreign exchange rate risk is high especially with a weak rand
Fluctuating inventory costs due to foreign exchange rate risk
Strong brand names of competing online retailers such as Spree and Zando.
People fear low security when it comes to online shopping payment methods and do not want their sensitive information to be hacked
Delay on delivery due to strike action by logistic firms
OVERCOMING THE WEAKNESSES WE FACE
We have no partnerships or strong relationships with clothing retailers
South Africa has got four major clothing retailers in the form of the Mr Price Group, The Foschini Group, Edcon and Edgars. The majority of South African consumers buy from these retailers. With our app users being the consumers of the retailers’ products and with the more interaction and personalization of their shopping experience at these retailers through our app, we believe this will act as an incentive for the retailers to partner with us and create stronger relationships with motle as our app directly increases their sales.
High shipping and customs costs
The customs duty we have to pay will depend on the amount of inventory that we will purchase. In order for us to have a higher ROI in terms of procurement cost we shall use a shipping service that is fast, reliable and secure and that offers insurance for our goods in transit. Thus we have opted to use DHL express as we believe that it will meet our needs of cost minimization and reliable, secure shipping services.
Short staffed when it comes to highly experienced inventory management professionals
As a new business, we are unable to afford more experienced supply chain management professionals. In order to combat that, we will employ highly motivated, innovated and eager to learn graduates. In a world were one needs to have experience in order to get a job, we believe that we could be that place were freshly graduated young professionals can be innovative, apply the knowledge they got from institutions of higher learning and thrive. Their innovation and eagerness to learn and constantly do better is an asset that will help us combat the lack of experience.
Prone to be affected adversely with any strike action by unions in the retail and textile industries
South Africa goes through strike season where different sector employees strike. This results in many loses that are incurred directly or indirectly by the employer. The textile and clothing manufacturing industry in particular experiences crippling strikes that cause losses that cripple many small to medium manufacturers in South Africa. As we will be manufacturing our own clothing line, we will also face such challenges. As a first course of action, we plan to go through peaceful conflict resolution following the guidance of legislature and ethical fair conduct company guidelines so as to prevent strike action. In the unfortunate event that a strike does occur, we plan to make use of a reputable labour broker who can provide us with alternative workers. This is done so that production is neither reduced nor halted because of the strike action.
Foreign exchange rate risk is high especially with a weak rand
To minimize the risk of fluctuations in the exchange rate, and thus reducing our ZAR cost of inventory, we shall have a forward exchange contract in place with a Standard Bank. Forward exchange contracts cater for a diverse type of commercial and financial transactions and thus we as an importer can make use of it. As a company we will be protected against unfavourable exchange rate fluctuations . another reason for choosing this is the fact that the exact value of the import order can be calculated on the day it is processed as well as having an accurate budget and costs.
Every new business needs a combination of pooled knowledge and technical capacities that allow for it to be competitive in the marketplace. With such high levels of competition from both, established fashion, beauty and life style magazines both print and online, as well as blogs and online retailers targeting our specific target group, the need for a core competency is very high if we are to be a success. Our main core competency is our mobile app. We believe that with the app, we will have a comparative advantage over our competition. First and foremost the ability of the app to be able to style the user’s look based on:
The weather forecast for the day, with the aid of our weather feature on the app.
The user’s fashion personality
The user’s body shape
The user’s actual clothes that they upload pictures of via the wardrobe feature of the app
results in a personalized, highly interactive and thus satisfactory experience between the user and the app itself. If customer satisfaction is high, user retention will also be high which translates into sales and thus higher profits.
Secondly, on the app the user is able to have a personalized interaction with their favourite retailers of choice. They are able to know if new items based on their :
Size [ shoe, clothing, under wear]
are available instore. This reduces the frustration that most of us feel when it comes to shopping for clothing. The long hours spend finding the right item that suits your fashion persona, size and your body shape can be both time consuming and discouraging. Being able to walk into a store knowing that the item that you are looking for is there, waiting for you, is every shopper’s dream. It is a tailored way of shopping that is befitting the 21st century shopper.
Last but not least, the app comes with a feature that we call “THE MALL”. The mall, is a localized feature that has virtual stores that cater for the 21st century shopper. Most people nowadays are more comfortable with shopping in the comfort of their homes using their smart phones, tablets or PCs. The issue comes when you have to go to different online retailers to get the items that you desire. Motle’s mall feature, provides the online “Wal-Mart” for every trend conscious, fashion loving shopper out there, whether they are a busy stay at home mom, an executive or an entrepreneur. The mall consists initially of 30 virtual designer shops that will be selling apparel, accessories and make up by African, designers and fashion and beauty industry entrepreneurs.
LEGAL FORM OF OWNERSHIP
The legal form of ownership that we wish to have is a Private Company. We believe that this form of ownership is going to be beneficial for all parties involved. With this kind of business entity each shareholder is able to enjoy limited liability, the company itself can enjoy continuity of existence since the business is not affected by the status of the owner and it will be easier for us to raise more capital as the maximum number of shareholders allowed is 50. The greatest advantage for this type of business entity is that the scope of expansion is higher because it is easy to raise capital from financial institutions.
Stembile Mukwambo and Boris Brian Mukwambo, the founders of motle will be involved in the day to day running of the enterprise whilst our investors will get a monthly report regarding the progress of motle in terms of:
Social media presence
to name but a few. The shareholders will come with a shareholder agreement, were they will sit down and agree on the conditions of the enterprise.
With this form of business entity we believe that we will have a strong and intimate relationship, clear and conscience communication and be able to be more productive and work more efficiently as a smaller group of people with a common goal of working hard and efficiently so as to ensure motle’s growth, prosperity and success in Africa and beyond.