UAE: An ecommerce startup reducing returns in the region

 By Rachel McArthur for Wamda

If there’s one industry worth taking a chance on in the region, it’s ecommerce.

Arguably still in its infancy in MENA, the market has huge potential as more citizens throughout the region become connected.

Like any industry that’s finding its feet they’re going to find their fair share of challenges, and one regional fashion startup is hoping to reduce a major obstacle by revolutionizing the way we shop.

Launched in May, Miella is not only tapping into the increasingly popular halal market – modest fashion for women – it’s also the first platform to adopt sophisticated technology to ensure consumers are picking the correct size items.

“Ecommerce has allowed us to build a footprint at a fraction of what would have been possible 10 years

Rami El Malak, Founder, Miella
Rami El Malak, Founder, Miella

ago,” Dubai-based founder, Rami El Malak (below) tells Wamda. “Of course, ecommerce poses it own challenges, so we were cognizant of the importance of getting sizing right in order to contain returns and exchanges.”

Reducing returns

According to data presented at the recent ArabNet Digital Summit, ecommerce will be worth $40 billion by the end of 2015.

While region-specific figures are not available, most research agrees that MENA consists of a growing number of online buyers, thanks to 60 percent of consumers being under the age of 25.

However, returns are the biggest drain of profit margins, particularly in the apparel space, due to the possibility of incorrect sizing. At present, it is estimated that return rates in the region vary between 20 to 40 percent.

In an attempt to remedy this, Miella has become the first MENA ecommerce platform to adopt Virtusize, a

One step closer to getting the perfect fit with online shopping.
One step closer to getting the perfect fit with online shopping.

fitting solution that guarantees online customers find the right size every time they shop.

El Malak explains: “All you have to do is measure a similar item in your existing wardrobe and Virtusize will tell you what your equivalent Miella size is.

“We have tried to build something that allows our customers to get the best possible experience of the brand, short of physically touching the products.”

Writing on LinkedIn, Virtusize cofounder and CEO Gustaf Tunhammar elaborates on why the use of such technology can give a platform a competitive edge.

“Retailers must make the shopping experience seamless. Being able to ‘remember’ a customer’s size and fit preference, tastes and habits is not only a competitive advantage, it will soon become an essential function.”

And it seems to be working. According to El Malak, returns are well below the usual 20 to 40 percent rate.

“We are averaging 12 percent returns and exchanges – Virtusize has played an important part in that. As

our consumers get more acquainted with this technology – and as we move away from cash on delivery – we foresee dropping this rate by a couple of base points.”

The rise of halal fashion

As of 2013, Muslim consumer spending on apparel reached $266 billion, representing just under 12 percent of global clothing and footwear expenditure.

The modest fashion industry is growing rapidly.

During last week’s Global Islamic Economy Summit, Abdullah Al-Awar, CEO of Dubai Islamic Economy Development Centre, said that the industry is becoming an important part of the region’s Islamic economy.

“While the Islamic clothing market is still a niche market, there is an opportunity for Islamic fashion to impact and cross over into the mainstream fashion sphere, appealing to non-Muslims, as well as Muslims.”

But the aim isn’t only modesty for women.

“It’s about fostering positive change,” El Malak continues. “And so we contribute a percentage of all our sales to organizations that help children with cancer and other life-threatening illnesses.”

He and his team are also very mindful of where they source their materials.

“We spent about a year travelling back and forth to China and Turkey until we could find the right factories to manufacture in,” he tells Wamda. “It was very important for us to ensure that production was done ethically – ensuring the absence of child labor, and the presence of viable working conditions [among other things].”

Starting off with $250,000 in seed money from a group of angel investors, Miella is off to a great start with the company now gaining interest from other investors.

“It is very humbling, and it also comes at the right time as we are poised to go international,” the founder reveals.

“We just signed a deal with MarkaVIP which will allow us to rapidly expand our footprint across the region. We are also working on rolling-out our collections through various other global e-tailers, in parallel with offering Miella in physical retail spaces abroad.”

And the platform has already received backing from prominent personalities, including Alia Khan, founder of the Islamic Fashion Design Council, as well as the prominent UAE-based businessman Fadi Al Said, who said: “Miella has the right positioning and a well-thought out product that is complemented by a very unique supply chain.”

Rachel McArthur is a Dubai-based freelance journalist, editor, and radio reporter. Connect via Twitter @raychmofficial.