Ropstar, leading the second-hand revolution in Latam2022-03-09 | Raphael Kromer
Second-hand apparel is a rapidly growing market that is expected to reach $77B USD globally by 2025, with an expected growth of 11X, faster than the broader retail sector. In Latin America, we have seen the effect of this acceleration; transformation of consumption patterns, increase of second-hand purchase, and less stigma from young shoppers. Ropstar, a Polymath Ventures company, is Latin America’s second-hand fashion marketplace empowering fashion curators championing sustainable fashion.
In this new blog post, we talked to Raphael Kromer, founder, and CEO of Ropstar, about the purpose of the company in Latin America, their team, and the goals they are undertaking in 2022. Raph is an experienced entrepreneur with an academic and professional background in finance. Before leading the design and launch of Ropstar, he worked with Polymath in the investment area and then led Nido, during its initial stages of design and development.
THE OPPORTUNITY IN LATIN AMERICA
In Latin America, the willingness to purchase second-hand is already transforming thanks to the increasing trust in e-commerce and less stigma from young shoppers. This behavior is also encouraged by global trends and leading retailers and brands, such as Adidas, H&M, and Nordstrom, which have significantly increased their resale activity in the past 2 years, especially after the COVID-19 crisis. Considering this pattern of growth, Latin America could reach $7B in the next 5 years, representing 9% of the global resale industry by 2025.
COVID-19 transformed established behaviors and needs, creating opportunities to build new business models and keep pace with the radically changing market. The e-commerce landscape will show powerful growth; 29% growth in volume between 2020 and 2024 with a projected volume of more than $580B USD, according to Americas Market Intelligence (AMI) analysis.
The pandemic also triggered new behaviors; it has been estimated that 13M people across the region made an online transaction for the first time in the last year. Just in Colombia, e-commerce grew 53% and the expectation for the upcoming 5 years is to grow 75%, which would mean that e-commerce could represent 18% of the total retail sales in the country.
DIGITAL SECOND-HAND ENTREPRENEURS
There are over 300K young people in Latin America with the potential to become top second-hand clothing sellers, however, to leverage the boom of second-hand in Latin America, sellers and buyers need intentional and sophisticated tools to enhance their experience.
Currently, there are thousands of second-hand sellers in Latin America leveraging social media platforms to establish their businesses, increase their online presence and generate extra income. The well-advanced positioning of Social Media channels, their discovery features, and their visually driven interface has proven to be positive for the category. But their ability to enable scalability is limited due to a lack of operational functionalities, including inventory management, and efficient communication tools.
WHAT IS ROPSTAR?
Ropstar is Latin America’s second-hand fashion marketplace, connecting formal digital sellers with thousands of clients looking for affordable, sustainable, and unique pieces.
The goal is to transform the second-hand space in Latin America by helping professional sellers grow their business, reduce the operational hassle, and help them make informed decisions while offering a differentiated experience for buyers, always prioritizing transparency and accessibility.
THE DESIGN PROCESS
Ropstar was designed to enable the sale and purchase experience of second-hand clothing. The sellers, also called Ropstars, build online stores in the platform to showcase and manage their inventory, operate the business, and increase their presence with a growing community of potential second-hand clothing buyers looking to find sustainable and affordable pieces.
In 2020, the business design team at Polymath Ventures partnered with Vertical Partners to research the social commerce landscape. This partnership merged the expertise of Polymath building companies from scratch and deeply understanding the emerging middle-class in Latin America, along with the deep experience of Vertical Partners in the fashion industry, thanks to their massive success with Leonisa, direct sales leader in Latin America.
Esteban Urrea, Vertical Partners CEO, shared that “the trend of second-hand consumption has been accelerating in the region and fashion has been directly impacted by it. A few years ago we started betting on sustainable fashion. First, it was through Leonisa, creating products with recycled products and now through Vertical Partners, we are enabling second opportunities along with Ropstar. The proposal is unique and sustainable, always thinking about fashion from the identity, it is not about following trends, but actually offering an experience and inventory that suits the style our clients look for.”
In addition to the overall ecosystem acceleration, the design team also unlocked three relevant insights that conducted the building and launch of the company.
- Conscious and savvy shoppers are the fastest-growing segments. The new wave of second-hand clothing is led by conscious buyers questioning the standard of fashion. But the team also discovered a new generation of savvy shoppers that are looking for smart deals. It's not about price, it's more about leaving behind the transactional behavior, and actually buying with intention.
- Consumers are breaking the stigma around second-hand clothing at a fast pace, with celebrities championing the movement globally. Willingness to buy second-hand has shown a dramatic increase in the past years' thanks to the massive adoption led by celebrities and influencers. Initially, the narrative was oriented towards vintage clothing, but as the ecosystem evolved, we learned about more personalities selling their clothing in second-hand marketplaces, and also encouraging the purchase as a way to reduce our carbon footprint.
- Retailers and brands globally are launching their own resale platforms or partnering with leading resale players to adapt to the changing needs of consumers. Buyers' needs and expectations are transforming, consumers now expect unique digital experiences, great customer service. But, they are also looking for conscious brands with purpose.
GROWTH OPPORTUNITIES FOR SELLERS
The Ropstar solution aims to help sellers grow their business, reduce the operational hassle and help them make informed decisions. The proposal is based on two core pillars that were identified during the design process.
First, the company focuses on creating business growth for sellers. This means bringing new customers to the platform so they can reach a broader market and increase their sales. It also means having greater exposure in multiple channels, including the Ropstar homepage and social media channels.
The second pillar is related to enabling a streamlined operation for sellers looking to professionalize their business. Current platforms utilized by sellers, including other marketplaces and social media channels, are not designed to solve some of the most common problems. This includes features such as integrated communications, inventory management, payment options, and logistics.
DISCOVERY AND CURATION: NEW SHOPPING EXPERIENCE
At the same time, the company aims to improve the second-hand fashion shopping experience by helping buyers make better decisions, transact and feel motivated to come back. After understanding the social commerce landscape, the team understood the relevance of social media channels for consumers looking for new trends, discovering local brands, and even sharing their discoveries with friends.
But, the team also understood that the overall experience was limited due to the natural restrictions of the existing platforms. Some of the most used social media channels are not designed or optimized to support a positive buying experience. Usually, transactions are made through direct messages, which is not efficient, and in some cases, it is not safe.
Ropstar offering aims to enhance the shopping experience while reducing the natural risks of e-commerce. However, their commitment goes beyond the experience, they also care about educating the market about the sustainability of the shopping cycle and enabling a platform of discovery of local entrepreneurs.
WHAT IS NEXT FOR ROPSTAR?
Being a pandemic business, designed and launched during one of the most critical periods of our generation, Ropstar learned first-hand the relevance of social commerce interactions. The boost of the e-commerce landscape in Latin America was the perfect scenario to kick off their path. The urge of local entrepreneurs looking to grow their businesses and increase their income-generating opportunities was the confirmation of the need for this business model in the region.
It has been less than a year since its launch and Ropstar continues to refine its shopping experience, proving the relevance of the solution for this audience. The team led by Raph has grown significantly and counts with great professionals in different fields such as product, marketing, and service design.
The company is now raising its Seed round, to accelerate the growth of the business in the region. In terms of metrics, this means onboarding new and exciting sellers, strengthening their platform of services for sellers looking to enlarge their businesses, and continuing positioning the brand in Colombia to attract more buyers.
2022 is just starting but the team is ready and excited for everything coming next: “In the coming months, we will continue creating an entertaining fashion discovery and shopping experience for our users, getting away from the boring, transactional nature of traditional eCommerce. For our seller network, we will continue building solutions that make their operations more efficient, allowing them to focus on growing their brand and reach their full potential as fashion resellers”. Raphael Kromer. Co-founder & CEO