Launching a Luxury Fashion Site During an Economic Downturn

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An economic downturn can be the perfect time to start a business- competition is lower, office space deals may be better, and businesses that focus on basic goods and services benefit from frugal customers. According to the Kauffman Foundation, just as many or more startups are founded in tough years as good ones, as recession create tougher businesses in new markets.

While companies that focus on luxury goods or high-end markets are often buffered from a recession, it’s rare to find one that directly benefitted from the global economic crisis. Yet for twin sisters Dara and Dawser Al Hadidi, who started as a weekly luxury industry newsletter in 2008, launching a full-fledged website became easier once high-end brands began to reach for new marketing options in light of reduced consumption. 

The site, which launched in March 2011 as a luxury fashion and style guide, offers fashion news, advice, and event coverage, as well as an insider’s guide to current store inventory, allowing customers to save time navigating Dubai’s labyrinthine malls by crafting a shopping list at home. 

It’s not the customers driving Dubai’s $12 billion clothing industry that were difficult to convince. While Dubai ranks third in the world when it comes to density of luxury brands, according to CEO Dara Al Hadidi, the team of five found it challenging to get high-end brands on board at first.  As co-founder Dawser pointed out at the Luxury Forum in 2010, before the site’s launch, "Luxury brands have been reluctant to use social media marketing for fear of losing control over their image." 

Yet the global downturn forced brands to pay attention to stylendubai’s message. Once the sisters crafted a strict user targeting strategy at parent company BeeWeb and demonstrated the value of their userbase to brands, they were able to convince luxury vendors to come on board. 

We chatted with Dara Al Hadidi about her journey building the brand.

How did you come up with the idea to start? 

I came up with the idea a few years back when I was watching the Dubai lifestyle change, as consumption rose.  After noticing that consumers were relying heavily on online media for information, we created to bridge the gap between online and offline media and serve the luxury fashion market in Dubai. Our goal was to provide the user with information about store inventory, to enable him or her to plan a fruitful shopping trip. 

What is your revenue model? 

We are a highly targeted advertising platform; our revenue stream comes from various online advertisement products and tools.  

How do you differentiate yourselves from your competitors? 

To target a specific set of users, we worked long and hard on gathering our database, following a strict strategy, allowing consumers to opt in to our marketing, and connecting with strategic partners to ensure that we could reach a niche audience. We actually conduct a strict data clean up every month to guarantee that our audience is exactly who our advertisers want to reach. We also focus on creating engaging, dynamic content. Thus far, we’ve captured over 500 luxury brands on the site.

How did you first bring customers on board and get them to trust your brand? 

Getting luxury brands on board with us was not easy; at the beginning luxury brands were hesitant to use online media, as they were mostly familiar with print media. To them, online media sounded like targeting the masses, which is not the market they’re typically interested in. It took us 13 months to convince most of the luxury brands in Dubai to come on board and become active publishing partners. We did that by building awareness and educating the brands about the abilities of our platform and getting them to understand our strict strategy when it came to building our database.

Has your business been influenced by the global economic climate or political climate in the region? 

Unlike other businesses, the global recession has worked in our favor, as a slowdown in sales in brick-and-mortar stores made luxury brands more willing to listen to innovative ideas to help them reach their audience. The prospect of online coverage for their brands became exciting. That helped us to build strong relationships with brands, and once our platform gained momentum, it started selling itself.

How did you market the site? 

We have no marketing budget. I consider it lucky that my co-founder Dawser happens to be a media industry blogger, specialized in web intelligence and social media marketing, certified by the eMarketing Association. Her experience has helped us use social media channels and leverage viral marketing secrets. We’ve also connected with strategic partners to offer access to luxurious events, spas, private clubs and niche magazines, to reach our targeted audience. 

What are your plans to expand? Do you plan to reach the region? Or go mobile? 

We plan to Arabize the site, build mobile applications, and expand the platform to cover different lifestyle industries in Dubai and the region.

Have your family and friends been supportive? 

Let’s face it; in our part of the world, most people are used to see you climb a typical ladder: getting a job, getting married and having children. Taking the entrepreneurship route seems remarkably different; immediately it’s as though a question mark is written on your face. People keep asking, How is business? Are you ok? Being a woman also makes it even more outside the norm.

It happened naturally for me however; I did not plan everything out ahead of time. I just had this drive in me, and I was lucky enough to realize that my twin sister would be a great co-founder, and I talked her into it. Endorsement from ours family and friends came after the idea was implemented, and we are both thankful for their support. 

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