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China’s golf industry

China Paradigm transcript #96: The reality of brand building in China’s golf industry

Find here the China paradigm episode 96. In this interview, with Guillaume Sergent, founder and CEO at Ailion Golf, you will discover the paradox of China’s golf industry and what it takes to develop a French golf brand in China.

Full transcript below:

Hello everyone. This is China Paradigm, where we, Daxue Consulting interview season entrepreneurs in China.

Matthieu David: Hello everyone. I’m Matthieu David, the founder of Daxue Consulting and its podcast, China Paradigm. Today, I am with Guillaume Sergent. He is French. You are the founder of Ailion Golf. I was asking you how to pronounce it. It’s a very good name. I really like it because I think it gives both a sense of elegance and something like flying. I don’t know if it is the influence of French in this word. With power and also easy to translate in terms of pronunciation for Chinese and we are at China Paradigm, you are based in Shanghai and that’s why I am insisting on the Chinese perception. You started a business in 2015 first in France and then you developed in China and my sense is that it took off and you dedicated more time to your business when you arrived in China because at the time, you found suppliers, you found people to work with and today, you focus more about the brand that is focusing on golf apparel in China. So, it’s about golf apparel in China including jackets; maybe more and you are going to tell us if it’s more. Some numbers about China’s golf industry. You are selling in China and in France. I would say to France because I believe it is more on the website in France and more offline in China’s golf industry. So, the growth market in China; a few numbers and a few dates. In ’93 there were no golf courses in China. Not a single one. The country had opened to the world nine years before and still, there were no golf courses, no China’s golf industry. The first one opened in 1983. It’s said that we have about 1.2 million players in China. France would be 2% of the population, but for China, it’s still pretty niche. Golf is associated with success, to wealthy people and used only 1.4% of the worldwide golf in China compared to 45% in the US. So, if you compare the room for growth, it is huge. It may be a bit mistaken to compare it this way, but still, we are at a ratio which is ten times less. So, we can imagine that it is going to improve. It is a conception. You use golf to show off. You use golf to show you are successful, but yet it is not something that the government wants to show. So, officials are not allowed to join golf clubs (learn more about the golf ban in China). So, it’s sort of a paradox in China as always and golf is represented as one of these that we are presenting as a paradox. Thanks for being with us. It is a long intro because I’d like you to say a few words about China’s golf industry. So, what about Ailion? Can you tell us more about what you do and about the size of the company?

Guillaume Sergent: Yes, thank you so much. A great introduction. I really like first how you explained the business and the golf and the paradox of China’s golf industry. It is exactly like this here. So, about Ailion, I would like to come back to the name. As you guessed, Ailion in French it is a mix of two words. Eagle is that is called “aigle” in French and “lion” which is the lion. So, it’s two words that are combined and we try to make it easy for everyone around the world to pronounce the name of our French golf brand in China. So, that’s the name, and as you pronounce you can say, Ailion, “Ileon”. It depends on the nationality of the consumer. Then about our DNA, I would say we are a fashion lifestyle brand inspired by a golf-like style. The idea about our French golf brand in China at the beginning was, “I’m a golfer” and when I play golf in France, it’s in the middle of my normal day which is the morning I could go to the driving range and I could have a meeting. So, I don’t want to change my clothes and still look elegant and comfortable. So, it was really the beginning of the idea to create a brand, especially pants which are our aero products. Then about our size. We are still a start-up so, we are basically less than 5 people working and we have partnerships here in China and in France, we are just using consultancy. We have Sonny Anderson who is a former football player who played for Barcelona. In the past in France, we sponsor a lot of big events which are the oldest prom in France; 25 years existing with more than 400 players and also the biggest growth charity in France which has helped to increase our brand awareness. In China’s golf industry, we developed our partnership with golf clubs and as you said, we try to mix offline and online shops because as a new French golf brand in China, people need to touch and to see our real product.

Matthieu David: So, you gave a sense of the size of the team. Would you mind sharing the number of clients, number of SKUs, revenue; a bit of a sense of where you are in terms of development. Still recent captains, fifteen or let’s say sixteen. So, it is still as you say a start-up. If you can share any number that would help people listening to us to understand where you are in your development?

Guillaume Sergent: Yes, so at the beginning, we started just by one product because it was just a crazy idea to give to all golfers and also like normal guys like you, for example, to be able to wear pants that is elegant and you can play golf or even ride a bike without having to be wearing sportswear. So, we started just by one product and then, with the success of this product we decided to have more SKU’s and so now we are around 20 SKU’s, but we are not thinking about in terms of SKU’s because now, since a few months by chance, the retail mindset changed a lot and the fashion mindset changed a lot and this is something that we tried to improve which is sustainable predictions. Start producing tons of SKU’s which just makes no sense for everyone and not even for the customers, but even also, for the world. So, we have like reasonable SKU’s with products that you can wear like Diva Life and also then the outdoor activities.  In terms of revenue, we are around 10 000 revenue which is still like the beginning and we are still looking for the second investing time. So, during this special time because as you know, with the Covid-19 it is really special. We try to induce more change with this business model of making on order which we have started to think about before the crisis. So, we will see because, to be honest, this time we are facing a big change.

Matthieu David: Yeah, we are recording on the 18th or 19th of March, 2020. No, it is 20 March 2020 and the crisis seems to be averted in China, but still, it’s recovering. Retail is not I think entirely open, but it’s on the track of being 90% open and it’s in Europe and the west that difficulties are appearing (learn more about China’s Covid-19 recovery). I’d like to talk about the product. What is interesting in the start-up and especially when we are in China is how do you create your first product? I don’t think you have the background of the fashion industry, or as a designer or in finding a clothing manufacturer in China and I think that is a question people have. Where do you start? What do you start with? I listened to one video and you said you found a clothing manufacturer in China at the campus and you saw people shooting and you were asking these people what they were shooting and then they connected you to a producer, but more largely, how do you find a clothing manufacturer in China? How do you manage it and how many can you produce for a start because that’s also an issue you mentioned;  all the factories you have met initially were asking for a huge amount of production. So, if you could give a sense to the people who are listening to us on how you deal with low orders, finding factories you can trust; knowing that you can trust the and there is one more thing is that you are mentioning that you have an innovation with your croquet which can clean golf balls. That is also something that could be interesting. How do you establish innovation? Is it all by yourself? Is it with the factory? So, about the product generally speaking, how do you develop it and how do you produce?

Guillaume Sergent: Okay, so first I had the idea a really long time ago. It was funny; maybe more than 10 years. I even don’t think about launching a company or a product. Just, I realized when I was playing golf and you know when you are playing golf, the only moment you can catch and bring your ball and clean it is when you are on the green and as a golfer, I am really picky with my style and I don’t want to dirty my red pants and so it was really annoyed and in France, we don’t have caddies as they have in China. My type was really far away. It took me really long to think of how to clean my ball and finally, the gamers behind us wanted to play and my friend says, “Hey, we have to play now.” I missed my shot. I was really, really angry and I felt like, “Oh, why?” Why couldn’t we have accessories to help us focus on the stroke? So, I started to have a look on the internet and I just found really just weird things; accessories that you could put on your pocket, which was really not convenient. So, I started to think, “Okay, why we never wrote golf pants?” I mean a golf brand pants itself because it is super expensive, first and then you will not wear it a long time or for example, in the beginning, I was playing golf and I would say, “Oh, I want to buy one pant I will wear like what; 3 or 5 times a year.” So, I think about, “Okay, what about creating a product that you can wear like for your everyday life and also, which could be really easy and comfortable for golf” and then about the accessories about the pocket, we said, “Okay, golfers like to have excuses if they are badly made shorts. So, in the beginning, we thought about just a towel you can plug on all the pants, but most of the time people are not warming up and I was sure they will give the excuse about this accessory. So, we started to think about what about integrating this pocket on our own products. So, we did research. I just did it by myself. I’m just a fashion addict and I’m a golfer, so I just know what I don’t like and if when I swing, I feel discomfort, I say, “Okay no, I don’t pull the pocket on this way. I just use a zipper and not a button.” So, we just iterate a few bends. During this time, I was in Paris.

Matthieu David: So, the first prototype – we talked about a prototype earlier – so, you created it yourself, right?

Guillaume Sergent: Yes. I created it myself.

Matthieu David: So, when you had to find a clothing manufacturer in Chinayou would be able to already show a product?

Guillaume Sergent: Yes, definitely. Before that, of course, I designed it on paper, but then to make it, I hired some designers to just make it.

Matthieu David: How did you find a designer?

Guillaume Sergent: One of my best friends created a company; a professional company and they gave me the first advice of, “Okay, hire a designer.” So, then I just contacted a fashion school which is plenty of designers and they are all looking for experience. So, I met the woman and she did a good job. I gave it to her and we think of how to plug all the details; the feet of the pants. I gave it to her. They are not my favorite pants and said, “Okay, I want it like this fit and it has to be like this; the button” and all the details and so we built it together.

Matthieu David: I see. Which fashion school did you contact? I try to be as specific as possible.

Guillaume Sergent: It’s the classic one; ESMOD.

Matthieu David: ESMOD is in Paris and they have also a school in Beijing. I believe there is an investment from China? The founders are both in China.

Guillaume Sergent: So, I was able to draw, but I was not able to make it. By the way. I choose my own fabric that I really like and then, the same as I had the advice from my friend to hire the designer. I started looking for good fabric and so then I went to an exhibition in Paris to find the proper fabric which I had a really high expectation because during my marketing research I just showed really sporty pants or really fashionable pants. I want to give my customers something really in between, but if you are wearing golf apparel in China; the purpose was, “Okay, you need to be able to wear it with a jacket and with a tie.” It was really tough at the beginning to say, “Okay we need elastin, but not too much because if you put too much elastin you can guess, it is like really sports trousers. So, finally, I found in Switzerland has a very famous manufacturer which is Solo, which used to supply Nike and so on. So, it was pretty expensive, but it was real and it is still the best one. The first words from my customers when they try the pants are, “Oh my god. It is so comfortable. You didn’t lie.” I say, “I know.”

Matthieu David: We’re talking about the fabric? 

Guillaume Sergent: Yes, the fabric of the pants. So, then I did one prototype with the final fabric and to have the exact shape. Also, the number of meters and seeing like manufacturers. So basically, at the beginning as you said, I was in France and at this exhibition, I met some manufacturers, but they asked about ten thousand or like a thousand pieces. So, I was like, “No, I don’t want that. I want around a hundred pieces.” So then, by chance, I moved to China and I followed my wife. She was relocating here. So, I was thinking., “Okay let’s go and see China. It is really known about manufacturing and so I am sure we will find a manufacturer.”

Matthieu David: For the prototype; by the time you had a designer, the designer is doing drawings. I understand you found the fabric. I understand that you created your own prototype yourself, but if you want to go beyond the prototype and to have something comfortable which fits people you need to work with someone who knows how to produce those pants. Who did you work with to produce the prototype? Was it in a small shop? Was it with a small designer who was also able to produce a prototype? Was it yourself?

Guillaume Sergent: No, no, no it was the designer. Me, I provided the drawings and then we worked together about the fit, and then she stitched with the fabric I bought in Paris and we said, “Okay, here you have like too many fabrics. Here we need to add some blabla.” So, we did it like this. At the beginning towards like almost the final prototype which is not really final, but which fitted and then, which was the most important thing which is we did the final drawing on Lectla which is a software you could print the drawing and make the pants through the drawing and you just cut the fabric with the drawing.

Matthieu David: How do you spell Lectla?

Guillaume Sergent: L-E-C-T-L-A.

Matthieu David: Very interesting. So, you have this software that helps you to communicate with manufacturers and with people who produce easily with these standards.

Guillaume Sergent: I will add, ‘supposed’ to talk with the manufacturer. Why suppose? Because in Europe they are using this software and I came into China and so as you said, I found-

Matthieu David: So, we go back to China now?

Guillaume Sergent: Yeah, so those women who are just photo shooting for a fashion brand; they look like say westerners, but they are French. So, it was funny, easy and we started to talk and they gave their contacts to me about their manufacturers which were really small. So, able to make small quantities. So, I was super happy to find a clothing manufacturer in China. So, I met this woman who was managing the smaller manufacturer, and then that’s probably how it started. Why; because they didn’t have like traffic here in China. They are not using this software. So, it was like I had something, but we couldn’t print and we started because China is really strong to make garments. So, we talked together and they were doing fashion in small quantities and so they introduced to me their suppliers. So, when I met her, I came with my software drawing and I say, “Okay I have everything. So, let’s try to make some samples.” Unfortunately, I discovered in China electro was really not used. So, I did just by a copy at the beginning and what I did… 

Matthieu David: You gave the product to them?

Guillaume Sergent: Yeah just my size to be able to wear it, to see and to test them, but at least you really need to have all the software because the software gives you all the sizes. The idea of our product was to be like not tailor-made, but half tailor-made. So, we did the gradation which is like we are using American sizes for our golf apparel in China. So, from 30-40 with the lengths of the legs. So, we need to print these. It was quite tough and finally, by chance, I found the contact of Electra in Shanghai who printed for me the drawings of our golf apparel in China. So, then I could give my small manufacturers the drawings and they could cut my fabric and make the first batch. 

Matthieu David: So, at that time it was a prototype. How much money did it involve? Did you need to pay them for consulting for the time spent with you or what are we talking about? Is it something that they were willing to waste time on before you produce more?

Guillaume Sergent: You have to pay to put it up then they deduct the price when you get your order. The kind of money to make this kind of prototype; because you need to run around and buy fabric and also your time, but at least it is around 5 000 Euro, at least.

Matthieu David: 5 000 Euro for the prototype and the fabric and so on?

Guillaume Sergent: Yeah because you buy the fabric and you are buying small quantities and the small quantities mean it’s more expensive and then you hire the designer to have the drawings. Yeah so, maybe I add more than ten prototypes in my wardrobe that we are not using at all because at the beginning we had these that they made the prototype but on the wrong side of the fabric. Our fabric is waterproof and so on so, that was inside. 

Matthieu David: I see.

Guillaume Sergent: You can guess. You couldn’t have just 3 meters of the fabric. You need at least 10 meters of fabric.

Matthieu David: And then you produce about 100 units? Is that correct?

Guillaume Sergent: Exactly.

Matthieu David: So, we talked about the product. I understand now how you started and I understand the key differences and the unique proposition of the product. Let’s talk about marketing (learn how to achieve your marketing goals in China). You said that you do offline marketing in China’s golf industry and online marketing as far as I understand; online sales with France. Could you tell us more about how you connect clients with your French golf brand in China? In some interviews before you said it’s a lot of connections, it’s a lot of contacts; building clubs, golf clubs, going to shops as well to add your products. Would you mind elaborating more on that?

Guillaume Sergent: Yes, so first what is really interesting is to remember our agents. Four years ago, all of WeChat, Weibo, and KOL (learn more about KOL marketing in China) was not so strong in China. It was really the beginning and now, the game has changed completely. So, at that time you didn’t have so many and so many groups like this. I even don’t know if TikTok was still existing? So, you couldn’t have any chance to promote your product like this, which is the case now for two years, I would say. In France, we realized and when I started a project there, I met golfers and for me, it was the best way to help people to know the brand because we are not known at all and you have so many brands, so many competitors. Everyone is not just a golf brand, but just fashion brands. So, the big thing was, “Okay, how a French guy could sell a product without speaking Chinese in China’s golf industry.” So, I talked with friends who of course were playing golf a lot. I started to meet golf directors and so on and we decided to follow the same strategy as we did in France, which is sponsoring golf events in the golf courses to promote our golf apparels in China. We met our customers and we helped them to know the French golf brand in China and know me, even play with me golf and also, what I learned in China and all the advice I got from people like you who are living there for a while said, “Okay, you should promote yourself” and at the beginning, to be honest, it is a bit tough to promote yourself and sell yourself because you are not the brand and I am not famous. So, it was more about the product. So, that’s the strategy we tried to have; sponsor different golf tournaments and help people to know about our French golf brand in China, know about our value proposition and start this and also, what is fabulous with China is you talk (learn about the importance of networking in China) with people and if they like the product they say, “Okay let’s go.” We started it just like this throughout some shops and throughout some pants and said, “Okay, why not? We try it and that’s it.” It failed. It worked on others. So, it was quite like fun to see how these things go fast in China compared to France.  

Matthieu David: One thing I’d like to go back on is you talked about sponsorship. What kind of sponsorship are we talking about? Is it about moderating an event? Is it about giving some products for free? Is it paying for your logos to be somewhere? I believe that is maybe something you may spare for a later time because that may be costly, especially for golf because golf is where wealthy people go so it should be an expensive place to do advertising and to show your products. Would you mind sharing more about what a sponsor can be when you start your business in China’s golf industry?

Guillaume Sergent: True. So, as we did that at the beginning it was, we tried to pay and give money because people want money, but hopefully, we are a brand so in all golf competitions they are looking for gifts. So, in the beginning, we started like this; providing products like caps and for the winners some pants, some Polo shirts and so on. Then also, a chance at how to promote a brand was to organize by ourselves or with other companies and so as I developed a good network in the golf club, I started to meet some others in the industry of hospitality, fashion, retail, as F&B to say, “Okay, I am a French golf brand in China. We are organizing or we are trying to organize some competitions. So, what do you think about joining us?” You could meet like the final customers which are really tough in China to meet them and to meet us. So, also with the French government, we organize a big and huge competition at the Sushant Golf Course in France. So, the idea was the gathering of the French community, the French style on the competition and all the golfers of course really, really loved it. So, this is the first part of it and then of course as you mentioned, you need to give free gifts and free products to influencers and this is the part that is tough because you give some products to teachers, you give products to people who have good networks, but then you need to push a marketing plan to be involved and when you are starting a fashion business, marketing is really key. Of course, for us, it was our weakness because as you mentioned, my background is a bit funny. I did a business school and so I was really bad at marketing. So, I hired some consultants and we improved that, but then it was also after that, the next step to build brand awareness; a brand story because at the beginning it was a product story. So, that was really key and really expensive also and of course, we did mistakes. I guess this is a start-up life. 

Matthieu David: I see. It is interesting to look into sponsorship at this time because when you look at luxury brands, some took off with strong sponsorship and we are talking about one that is very famous, which is Louis Vuitton (learn more about Louis Vuitton in China). It took off in the US by sponsoring the American Cup and being very present at this competition. That made a difference and we know with horse riding which is sponsoring races; it is also actually a key component of luxury events or gatherings where you have sponsors and myself; my first company was a gift box company and I sponsored as well. There was a question: What is the return on the sponsor in China’s golf industry? It is not clear. WeChat now with the fact that people can write articles on you and sell it themselves after the product gets commissioned. I feel that it’s getting more and more trackable, which is I think the good news for the future.  How do you get an ambassador? You have an ambassador which is I think pretty famous.  I am not good at football (learn more about the football industry in China). I am not good at sports, but he seems quite famous. How do you get him to work with you? He is called Sonny Anderson, right?

Guillaume Sergent: Yes, exactly. It’s a funny story. Because of China, it is funny. So, as you know, we have a lot of WeChat groups here and a friend said, “Oh, my cousin is working in the sports industry and we want to know about the sports industry in China.” It was funny. It was three years ago and almost no one was there and I remember all the comments were, “Oh wow, why is your cousin now coming on this time that no one is there?” Instead, I say, “Me, I am interested and blabla.” So, I was available and I said, “Oh, I want to meet you.” We connected through WeChat. We got a drink and we talked about his business, my business and I said, “Okay” it was already like 6 to 8 months I was doing business in China’s golf industry and I was looking for more things in France and I know France is really important for them to have like luxury and so we started to talk and he was really involved in football which is really famous in France and I just asked, “Do you know any famous people playing golf?” He told me about, “Yeah I know Sonny Anderson.”  I was like, “Oh my god. Are you kidding me” and it was funny because he was one of my idols when he played in Europe and France? So, I was surprised and said, “Okay maybe I would like to meet him or to be in contact with him.” In fact, I learned by the past that he was the best friend of his daughter. He gave me the contact of the daughter and we started talking. It was really interesting and then we got phone calls and I have to say, he is really amazing. He’s really kind, really mindful and we made it through there in France and we started and he helped to develop a business in France, introduced me to some good relationships of him and we started like this, but he liked the product, again and he wanted to also involve himself in start-up’s and so that’s why I think he came into the project.

Matthieu David: Has he invested in the company? Has he done within the company or you… what do you give to him? Is it purely kindness or truly help?

Guillaume Sergent: No, of course. We ‘ve got a contract. He didn’t put money, but he is wearing and advertising us on his social network and we try to develop networks with people inside his network, but for now, he did not invest.

Matthieu David: You said in one article that you have a partnership with CTrip (learn about the possible secondary listing of the company in Hong Kong) and I interviewed another entrepreneur and she is in the travel business. So, it’s more understandable that she is partnering with CTrip and one of the questions we had is, how come CTrip which is a huge company is partnering with the small companies, start-ups who have just started? How do you enter it? How do you contact that? If I am correct. You said that you have some partnership and contact with CTrip, right?

Guillaume Sergent: So, it was funny. During trade golf once, I saw on the golf course, a CTrip event which was organized by the Citroen golf branch. So, I talked with a woman and I said, “Oh, I have French golf brand in China. I would like to sponsor one of your events. Could you introduce me to your boss?” She said yes. So, we had a couple of meetings with them and we sponsored one of the events in the Chi Chong golf course. It was purely random and it’s just because I was playing golf during an event and as I know, every time you organize a competition, you are looking for sponsors so it was a good opportunity and again, they liked the product. They liked the cap very much and it was like this.

Matthieu David: The learning I get from the talk today so far, is that it is important to be present at events, to connect, to be openminded and even to connect with online players like CTrip because actually, they go to the event, they connect as well and here you have your opportunities. Do you agree with that? Is it the way you see immerging your business to be active in the communities, to be present, and to engage with people?

Guillaume Sergent: Yeah, I completely agree. Even big companies need to have new projects, new products and they need to innovate. So, they don’t care if you are a start-up or not and even I think what is funny is just you have to pretend that you are bit bigger than who you are and what you have to be careful of is, don’t pretend you are bigger than who you are, but just be able to deliver good products or I don’t know; good things. Good training, good whatever and even big companies would be happy to have an innovation or to provide innovation to their customers. What they provided in this competition was a unique brand, a unique French golf brand in China and after that event, it was really funny because we started to see some Chinese golfers with my cap with my logo and it was fun because my friends sometimes send me pictures of those  Chinese guys wearing my caps and they were like, “Oh my gosh. They are starting to wear your brand.” So again, I think as you say, the most important is what is the risk to just try to talk to someone except a no? So, it’s really my mindset about that in China’s golf industry.

Matthieu David: What I feel and correct me if I am wrong, but the fact to be a foreigner in China actually is opening you up some doors. It is clearly closing some doors to some settle that you cannot join, but it’s also making you so different, so unique in an event that you can get access. You can get into contact with people and people will not dare not to answer. We are not there not to help you a little bit. So actually, opportunities happen as well by your own identity as a unique identity. Do you agree with my conclusion?

Guillaume Sergent: Yeah completely. I think they are curious and they want to know, they want to learn and again as you say, of course, we can’t access from a certain circle until you are speaking Chinese until you are speaking full about their habits and so on. So, for me, this is the best thing that I would like to bring back the day I come back to Europe is to be open-minded and full. Just listen to people and you don’t care about this Chinese, this American.

Matthieu David: And I feel it’s not happening necessarily in the rest of the world not necessarily in Europe. You are seen as an outsider.  You are seen as someone we don’t want in a lot of circles in Europe, but in China, when you are on this site, we are very different. We want to know why you are here, what do you do? You are a foreigner in a country where it is difficult to make business when you are a foreigner. You are on the golf course and you are a foreigner. What are you doing here? You are creating some curiosity. I’d like to talk about marketing which is more like offline marketing with people. I went to your website because I like technology and we do a lot of research with tech. I understand that you are using Shopify, you use Google Analytics and Facebook Pixel as well. So, you do a bit of online marketing to the west, I believe otherwise you wouldn’t use Facebook Pixel on Google Analytics. So, what do you to create traffic on the website? Do you do anything? I didn’t see anything for the newsletter I believe you have, but I didn’t see a Mail Chimp or anything. Could you tell us more about what kind of technology you use?

Guillaume Sergent: So, we’ve got two strategies. First, for China and another one for Europe because after a few months ere, we tried to use the same marketing and communications tools (learn more about what marketers in Europe can learn from China), but it didn’t work at all. So, for China, we are using Weibo and WeChat and articles not promoting at all almost our product.

Matthieu David: Sorry to interrupt, but do you sell on WeChat because you cannot sell on Weibo, but you can sell on WeChat. Are you selling on WeChat? You don’t sell on Tmall, Tao Bao, but you decided to sell on WeChat?

Guillaume Sergent: Yes, exactly. So, we are using this offline and for now, we are still thinking of how to provide a new program that would be different so we need to think of how and that is really important.

Matthieu David: Why would you need a new program, if I may ask? Is it to add a layer of engagement to other mini-programs?  

Guillaume Sergent: I think it could be more about if you are reading a new program it is more about the experience and how we can give something different because again, we sold a lot of mini-programs, but for me, they are just like embed something or just like embed and/or the classic process and you didn’t have any purpose on this so, again I don’t like to do something like everyone else does because you have to do it. Be different because if you are not different people will give up the mini-program and so on. So, it is more we attract people to be different and do like different content which is creative with China. For Europe, we used to have a light newsletter and we are using a lot of Instagram and Facebook and we are also using our KOL’s a lot because we have got also golf teachers now and they are promoting themselves and help us to promote the brand and also, of course, Sonny Anderson.

Matthieu David: How do you help them because helping; I believe there is something like a relationship with them?

Guillaume Sergent: Yes, we give them some products for free.

Matthieu David: Alright so it does not commission on what they help you to sell? It’s a few products for them for free and if you find out that they are very active, you would continue to sell them products.

Guillaume Sergent: Exactly it is more about steps and if they are able to introduce us to some business. We can talk about the next steps, but until they are, we are just like this, but to be honest, at the beginning we thought about this business model just engage teachers to sell our product, but it didn’t work because teachers are teachers. They are not sellers. So, it was interesting because at the beginning we really thought about this.

Matthieu David: I found out that we always think that people are rational economist people and if you tell them that they will get 30% commission on it, they would sell and they would think to sell, but actually they would do a better job if you actually get them involved in building the product, getting feedback, offering for free or thanking them on Facebook or Weibo or WeChat and soon; getting them involved, getting them visibility and also, thank them actually for most people who could help. That’s good enough and they are not looking for an additional business to make it as a business. That is maybe the mistake of business people or entrepreneurs who always think rationally about relationships. You said that you do Instagram and you are using also Shopify as a tool for your website. For people who don’t know about it, when you create a shop online in the west, you have a few choices with Shopify and it is certainly one that is growing faster. You could use Woo Commerce with Word Press, you could use PrestaShop which is very fresh and you can use Shopify which is Canadian and is doing like 40 billion, I think USD now. It’s is growing fast. 14 or 20 billion to open your own shop, not like Amazon where you would actually be on the marketplace competing directly with people. So, when you need to create a brand, Shopify is a very smart solution. Could you tell us more about your experience with Shopify?

Guillaume Sergent: So first, in the beginning, I started to use Word Press and Woo Commerce because it was just a landing page, but it was too basic and really not appropriate for e-commerce from my point of view. Then we switched from Shopify because PrestaShop is great, but at the beginning of a start-up I will never recommend it and all the consultants I met said, “Okay, you can have PrestaShop, but it’s like give it to you and you just get your license.” So, don’t go and don’t invest in something that you will not use as it has to be used. So first, I did like Shopify and you can make something really, really nice and really friendly. So, that’s why we pick Shopify.

Matthieu David: The comment you just said is also usually what people say about Magento which was built by E-bay which is a very heavy solution and people have the same comment as you said for PrestaShop. You need to start low key. You need to start with a few sales. You don’t want to build a gas factory when actually, you need a small shop to start. 

Guillaume Sergent: Exactly, so then also, I was really inspired by China for making Shopify wide because in China, you buy in maximum and all the solutions we got in Europe was really too slow, but I tried to find a way to make it really short because again, we didn’t realize how European and French people are not really internet friendly, especially when you are in the golf industry which is more on budget. We say 40 or a bit like 30 people, but most of them are between 45 – 65 years old. So, they are not really open-minded and even they are going more on the internet, they don’t know how to buy it. So, we think about that and we try to make something really smooth and simple, actually. In three clicks you can buy it. For me, it was really the most important thing with Shopify and again, we just have really good feedback about our website.  I guess we did it well.

Matthieu David: saw by looking at your website and inspected your website in code, you are using Facebook Pixel. What do you do with Facebook Pixel? Are you retargeting people going to your website through Facebook and Instagram? Are you doing a custom audience? Are you doing look-alike? What do you do with Facebook and does it work?

Guillaume Sergent: Customer audience. It works. We have more and more traffic and we have more and more sales. So, Facebook is not really a complicated tool. It is really useful. I am not managing this on my own. I have a consultant doing it for me. Again, what I learn and what we learn is it takes time. So, you have to be patient to build and to know more your target and to learn your audience because you make tests actually with Facebook and they change a lot or really frequently the tool and you have to try to say, “Okay I pick up someone who is following this kind of brand from this part of the world; Europe, France” and then sometimes you don’t know why your agents are increasing or sometimes it didn’t work. So, we did some tests and sometimes the tests were really good and some were really bad for two reasons from my point of view is just again, in Europe they have more and more advertising, more and more processes so with the new LGBD policy in France it was a bit complicated at that time to target it and to know and people don’t want to get bored about advertising and also because you are a new brand, you need to investigate some ways. So, until that, it was really up and down and now starting to be more stable.

Matthieu David: So, first of all, you need to test on Facebook, but I understand as well that Facebook is a bit working like the brain itself. The more data it has, the more it would be able to target actually your custom audience with the Facebook Pixel helping. So, that takes time because it needs to learn who likes your post? Who is spending time on your post? Who is going on your website from Facebook and so on? So indeed, that’s not like Google where you pay and you get immediate traffic. That is something that takes time. It is so true. It takes time. About funding; you talked about funding in some articles and interviews in the press. Have you gotten any funding and what is your view on getting funding in the fashion industry? I am especially asking that about the fashion industry because fashion seems like something that people want to start because they like it themselves and not necessarily because there is a business behind it, not necessarily because there is a rationale behind it. So, I think the investment industry is less mature in this segment because a lot about the likes and the fun to start a fashion brand. Could you share a bit of your view on that?

Guillaume Sergent: Yeah, it’s even if I can say, irrational because as you say, fashion is kind of a dream. It is like for me to have a sports club and you see all these billionaires are buying football clubs and it’s funny how it’s the same comparison. People want to have their own brand to sell, “It is my brand.” So first is we go to smaller investing as I say, family and friend investors and then we got another investor from the fashion industry and so that’s the product and that’s how we started.

Matthieu David: In France, right?

Guillaume Sergent: No, no in China.

Matthieu David: At the time you were in France?

Guillaume Sergent: No, no at the time we were in China, but it was a French investor.

Matthieu David: Okay.

Guillaume Sergent: So, then I think again about funding that was a key point at the beginning. Involve people who are concerned about you or the industry and not just about money because at the beginning if you are involving people who are not committed to the industry, they will put too much pressure on your business and on you and you don’t need pressure. You already have so much pressure as an entrepreneur. So, that’s the thing and then also, the business model is crazy. We are talking now about the crisis and everything, but if I can, I just have feedback and a reminder that since 6 months, now people are more aware of how to change the fashion business, but before that, when you talked about a new model or producing by orders and everything; people were laughing at you. So even investors, when you present this kind of model, were really skeptical about that. So, it was and it is about finding how you will make your plan first, and then you have to adapt your speech regarding the steps you are funding. So, at the beginning like family and friends, it is easy then. You need to have a plan about how you will settle the brand and so on and then the other steps for a bigger investment are more of what is your new value proposition about fashion because I will not say it is easy to make T-shirts, but almost, you know? If you have a bit of money tomorrow, you can start. I am sure you will have followers and people, but how you can be sustainable and why people will buy our T-shirts more than mine or more than picking other kinds of shirts? It’s more about that. It is a complete process about how to promote your projects and find a good investor for good funding. So, that’s a bit crazy and be aware of me, if I can say that advice; like how you choose the funds and it is really important when you have funders to make some setup’s really clear meeting about who you are, what you want to do, what is the target because fashion is crazy and it can change in one click. So, just be aware of that.

Matthieu David: Thanks for your time. It is one hour already. It goes fast, as you can see. I hope everyone is doing fine, who is listening to us. Stay safe everyone. We are still in the middle of a crisis in the world and thanks for listening to everyone. Thanks for joining us.

Guillaume Sergent: Thank you, Matthieu.

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

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