South African startup Hello Pretty, which provides an online platform for designers to create and manage their own online stores, is looking to expand into mobile shopping having reported 80 per cent annual growth in revenues since its 2012 launch.
Hello Pretty, which showcases almost 1,300 design entrepreneurs, was founded in May 2012 by Sam Marx, Scott Hadfield and Adeline Levescot, though it was originally planned as far back as 2009. Head of strategy and social Lee Geldenhuys told Disrupt Africa the startup benefitted from waiting three years before launching.
“We’re glad we didn’t do it back then because the technology and the market simply weren’t ready for it – there’s a good chance we wouldn’t be standing here today,” she said.
But the market is ready now, and Hello Pretty is very much “here”. Charging a small commission on each sale – typically between five and 20 per cent – or an optional monthly fee for more active sellers wanting a lower commission and more features, the startup has seen revenue grow by just over 80 per cent annually, with expenses plateauing.
“Thanks to customers and designers adopting online shopping so much over the past year and a half our overall volume on the site is growing even faster, at over 120 per cent yearly and we’re currently doing over ZAR200,000 (US$17,000) in monthly sales,” Geldenhuys said.
She said though sellers on Hello Pretty are all based locally, over a third of its traffic is from abroad. But the startup is not focusing immediately on pan-African expansion, but rather into a different realm of online shopping.
“We’ve discussed launching into other African markets, but our biggest plan for expansion is into mobile shopping. Nearly 50 per cent of our traffic comes from people on their smartphones, so the bulk of our new features will be targeting users looking to shop, browse, and share from those devices,” Geldenhuys said.
Hello Pretty believes it has filled an important gap in the market, as evidence by its impressive revenue figures.
“The number of talented designers in South Africa is mind-blowing, but up until recently there was rarely a way for buyers to connect with it other than at their local weekend market,” Geldenhuys said.
“With Hello Pretty, we wanted to empower small South African design-related businesses and give them a way to connect with both local and international markets.”
Though there are other online marketplaces and platforms in South Africa, she said the startup’s competitors had helped it by making online shopping more commonplace in South Africa.
“We’ve definitely lost more customers to people who are afraid to shop online than to any competitor – so it’s not a case of us trying to trample on each other,” Geldenhuys said.
“We all have the same beliefs, and aren’t trying to take money away from each other so much as pull attention away from mass made products, redirecting it towards our local design communities. The quality of work we have here is so amazing that it deserves all the support it can get.”
Hello Pretty has been self-funded since the start.
“However the founders have all taken reduced salaries or no salaries as we’ve preferred to use the money to fuel the growth of the site. Our biggest landmark was this February when we started breaking even on all of our costs, allowing us to direct more money back into marketing and growth,” Geldenhuys said, adding that though Hello Pretty had “entertained” the idea of taking on investment, it had never found the right match.
Disrupt Africa reported last month Hello Pretty launched Pretty Portable, which allows designers to embed their marketplace stores straight into websites and Facebook brand pages. The startup said the new feature was so simple to use “your grandmother could install it with one hand while feeding her cats with the other”.
In spite of the apparent momentum, Geldenhuys said getting the concept off the ground had not been without its difficulties.
“Online shopping was still new in South Africa, and was a concept largely met with suspicion – by sellers and customers alike. We’ve had to spend a lot of time educating them about best practices, psychologies etc – for instance, how to market yourself online, especially since many sellers had never shopped online themselves,” she said.
“Shipping has also always been a hurdle – sellers are in charge of their own logistics, and while we can offer a great deal of guidance, the onus is on them to come up with a solution that best suits their business. Instabilities within the Post Office have also given us a few grey hairs.”
She said the team had initially spent a lot of time at weekend markets, pitching to designers in person in order to promote Hello Pretty.
“Because we always attended events in support of our designers we were able to get great word of mouth marketing, which was invaluable at the time as we had very little money to spend on marketing.”
These days, marketing is increasingly online.
“In addition to our online social presence, most of our marketing spend is on online platforms such as Facebook and Google, and we’re always experimenting with new advertising tools to see what works and doesn’t,” Geldenhuys said.