NTT Docomo’s fashion e-commerce venture, dfashion, has been operating for six months and is slowly garnering a share of the mobile fashion market – in particular it looks like being a useful source of sales if you sell to men – but faces stiff competition from entrenched players.
Magaseek was acquired by NTT Docomo in March last year, buying the majority of Itochu Shoji’s stake. The purchase was part of a wider effort by the telecoms giant to build up its in-house e-commerce capabilities in response to the growing mobile share of Rakuten, Amazon and within fashion, Zozotown.
Within six months, Docomo had launched a new mobile fashion store called dfashion inside its main dshopping mall. The store is entirely managed by Magaseek, marrying Magaseek’s expertise in brand and merchandise selection and e-commerce operations with Docomo’s 60 plus million subscribers. dfashion has 450 brands and 40,000 SKUs including Urban Research, Snidel, Nano Universe and Ships.
Docomo is chasing the rapid growth in fashion related m-commerce. Zozotown claims more than 40% of its sales now come from mobile devices and Rakuten claims similar numbers for mobile transactions overall. Having launched, Docomo has been advertising heavily through TV advertising and mail messages to its subscribers, and eight months on Magaseek claims that more than half its brands now sell through dfashion – with sales increases per brand averaging 20%. Magaseek has seen sales increase from ¥9.5 billion to ¥11 billion in the last year with most of the growth coming since the launch of dfashion in October.
Magaseek says dfashion is attracting a new type of customer beyond hard core fashion lovers. Many customers are new to buying online and tend to pay through their Docomo account – this convenience, along with higher levels of perceived security, are key competitive advantages. The service is also attracting a much higher ratio of male customers; while only 10% of Magaseek’s sales are to men, for dfashion the ratio is 30%. Magaseek also says sales of outlet goods are strong.
Although reports suggest sales so far have not hit original targets it is early days and Magaseek will continue to invest heavily in marketing through TV spots and web ads to Docomo subscribers. Docomo itself has a target of ¥300 billion in e-commerce sales in the medium term.
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