New York-based modest fashion e-commerce business Haute Hijab recently received an undisclosed investment from venture firm Lightship Capital. The funding is interesting on both sides of the deal.
Haute Hijab will now have the money to build additional infrastructure to help it scale globally, COO and co-founder Ahmed Zedan told Salaam Gateway.
As for the VC firm, the money came from its newly-launched $50 million fund that it said would specifically target minority-led start-ups. Trade publication Biz Journals reported on Sep 25 Lightship’s Candice Brackeen as saying $26 million had already been invested in five companies and that the firm will make initial investments in 35 firms in all. Lightship Capital said the opportunity in the modest fashion space is “significant”. “We consider Melanie [Elturk, Haute Hijab co-founder] an absolute visionary,” said Alexis Alston, senior associate at Lightship Capital.
Salaam Gateway caught up with Ahmed in a Q&A.
Salaam Gateway: There's a lot of talk about the COVID-19 pandemic accelerating digital transformations for many companies across the world. Haute Hijab has been around for a decade. When did you start your e-commerce store and what were the biggest challenges you first faced?
Ahmed Zedan: We started the business in 2010. A lot has changed with technology and the internet in that time, and we've grown and benefited from all the advancements.
Like most brands, the biggest challenge is matching demand and supply. The rise of COVID-19 was a special kind of challenge where we anticipated a drop in demand and disruptions in our supply chain. We were right about the disruption in supplies, but completely missed the mark on demand, which grew during the pandemic.
Part of our brand DNA is our weekly chiffon print hijab drops. Sustaining and evolving our weekly releases over time has presented scaling challenges. Our customer obsession means that we acutely feel and want to solve problems for our customers, so when we hear how frustrated they are to miss their favorite print, it really hits home. It's something we're working on but will take time.
2. How's your e-commerce doing?
2020 is another record year for us. We couldn't be more proud of our team, who has risen to the occasion. Like most e-commerce businesses and start-ups, we're under-resourced and overworked due to the pandemic. Nevertheless, we've almost doubled our order volume from pre-COVID levels, which is amazing considering the supply shortages that we've had this year.
3. How have lockdowns affected sales and demand? Is there a clear trend cutting across all your demand markets, or are there different patterns that you're seeing from different markets?
We're seeing growing demand in the UK and GCC.
It's clear that people are turning to online shopping to meet their needs.
Our customers are buying fewer luxury items but stocking up on staple pieces, and now with the launch of Haute Hijab Sport, they are adding that to their wardrobe as well. It makes sense with what we know - people are using video conferencing to do business and school, they're also getting more involved in outdoor activities.
4. Have you had to make any significant changes to your e-commerce operations because of the pandemic?
Part of our team was already working remotely pre-COVID, so transitioning to a fully remote team wasn't too difficult for us. We already had the internal processes and tools for project management and communication in place, so little has changed from our core business.
It has nonetheless made us embrace remote work much more, and we're still learning and growing as a team on how to maintain our culture and team cohesion. It's an exciting challenge, and it also gives us greater flexibility in the future to hire talent anywhere in the world because we're no longer limited by geography.
5. How has your supply chain with regards design, manufacturing and logistics been affected by the COVID-19 this year?
Our production and design team work on a different time scale than the rest of the business.
Typically, planning and design starts the prior year, so we saw negligible impact there. Global freight has been impacted by the pandemic. This typically manifested in shipping delays and extra precautions taken to prevent the spread of COVID-19.
Our Customer Experience team rose to the occasion and proactively communicated delays to our customers, and we set expectations for delayed launches. We're grateful that this mostly impacted Q2/Q3 of this year. Now, we're starting to see more suppliers and couriers return to business as usual.
6. We've seen the development from e-commerce to m-commerce to q-commerce, and there are constantly new developments in payments and logistics. How are you coping with the very rapid changes and developments in the online retail space?
As a brand, we're always thinking about the future and where our customer will be.
Our vision is that we want to meet the customer where they are and offer them the exceptional product and service they always expect from us.
From a technology perspective, we see online, mobile, retail, etc. as channels, so it doesn't matter what surface you're on - it's the same profile, personalization and history, because we know that our customer appreciates the personal touch.
This is only possible by working with the best technology partners. We're always looking to deepen our relationship with our customers.
7. Haute Hijab emphasizes ethics and sustainability. Do you have a code of principles translated into action?
Ethics and sustainability have been important principles and practices for our company and ethos since Haute Hijab began ten years ago. We believe in being responsible stewards of our Earth, and this has been our way from the beginning, when we sourced vintage scarfs to turn into hijabs to when we began sourcing deadstock fabric for our chiffon prints.
That being said, it has definitely been a work in progress, especially in learning and recognizing which of our products can be more sustainably produced. As we continue to grow, we are intent on investing in eco-friendly, innovative materials and processes to advance our rigorous quality standards and more environmentally-friendly products by expanding our partnerships with other like-minded vendors and improving upon our own manufacturing processes in our Ajman-based factory. Our Ultimate Underscarves, new Bamboo Woven Collection and Haute Hijab Sport line are exemplars of our continued effort in sustainability.
And as we’ve grown, our commitment to ethical manufacturing, fair-wage practices and responsible hijab production continues to be part of our core mission.
As we continue to research and work to align ourselves with certification standards, we intend to launch initiatives to create and measure our impact with even more sustainable products and business practices. It's still early but we're committed to doing the hard work ahead.
8. Related to ethics and sustainability, where do you manufacture and how do you make sure this part of the supply chain maintains your standards of ethics and sustainability?
We have seven suppliers located in the Middle East and East Asia.
Any supplier partner goes through a thorough vetting process that includes a discussion on values and code of conduct. This includes a binding contract that details all our requirements that include fair labor practices, environmental rules, and product standards.
It's common in our industry for brands to switch suppliers regularly, but we've taken a long view by treating suppliers as true partners.
As a start-up, giving our suppliers the kind of information they need is a huge challenge but it's something that's very important to us because they're critical to our continued growth. We do our best to align our interests and regularly communicate with them successes and failures so that they know where they stand. It's important that we give them the opportunity to scale their operations to keep up with our demand.
Our main supplier has grown from a small operation to now owning and operating a large manufacturing facility. We love growing with our suppliers and seeing them succeed. It makes our journey that much sweeter.
9. If just three to five years ago, modest fashion releases by big-name global fashion houses like D&G would make all the headlines, this year releases from the likes of Tommy Hilfiger and high street powerhouses like Primark in the UK come and go without very much aplomb. Haute Hijab has been in the business for some time - do you believe modest fashion has been normalised in the mainstream?
The fashion industry like most industries go through hype cycles.
Muslim consumers and their spending power are attractive to brands looking for new areas of growth, but it's hard to sustain it if you can't demonstrate quick commercial value or you don't deeply understand this customer.
In our years in business, we've shown that there is a real appetite for innovative design in this space and our efforts are accelerating. It's hard to gain real traction in this market if you're not making a multi-year investment.
I think the road to normalization is still early. We just passed the novelty phase. We still need to get to interest and adoption – not an easy task.
10. What's next for Haute Hijab?
We're a brand with global ambitions, and we're just getting started.
Our mission is to create a world where every woman feels comfortable and confident. We've heard the enthusiasm for our brand and product, and we have a dedicated team that is excited to fulfill this mission. There are a lot of exciting and unexpected products that we'll be releasing in the months to come, and it's going to be fun to surprise and delight our community.
(Questions by Emmy Abdul Alim)
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