Over the past few years, Shein has taken over online fast fashion by exporting affordable wear from China to customers around the globe. Its success has attracted a wave of imitators, but a startup called Body404 believes China isn't just about cheap runway knockoffs. The country is also seeing a budding generation of cosmopolitan designers crafting high-quality garments and accessories, and Body404 wants to help them reach Western consumers.
At first glance, Body404's indie designer collections are reminiscent of retro-90s looks of acid-house colors and baggy denim (disclosure: fashion terminology is way out of my area of expertise). Or they are something that you'd imagine Billie Eilish and her Gen Z followers would wear. Unlike throwaway fashion, the clothes seem to be designed to last -- a pair of flared pants cost $135 and an occult printed long sleeve asks for $144.
Body404's offering has won some investor support. Founded less than a year ago, its valuation jumped to $50 million after closing a Series pre-A round totaling $6 million in March, it told TechCrunch. The investment was led by BAI Capital (Bertelsmann Asia Investments) and will allow the startup to expand beyond its current team of 100 employees across China and the U.S. Existing investors Kuanzhai Venture Capital and One Capital also joined in the round.
The startup doesn't hold inventory, which keeps its costs down, but it provides manufacturing resources and marketing help to designers who might lack the know-how of telling their stories to a global audience.
Most of Body404's 100 designers are currently located in China, but it doesn't want to stop short there. Its co-founder and CEO Jeff Zhang, a serial entrepreneur who ran an IDG-backed flash sales app, also wants to connect boutique designer brands from other countries to China's well-oiled supply chains -- which is often cited as a key ingredient to Shein's success.
A major pain point in cross-border selling is high return rates. Zhang said return is relatively low at Body404 -- around 2%, which is much healthier than the 10-15% seen on fashion marketplaces that emphasize affordability over quality. Body404 boasts $1 million in monthly sales and aims to reach $20 million in annual total this year.
Most of the company's customers come from the U.S. and Europe, whose average basket size hovers around $50. Surprisingly, its customer profile isn't that much different from Shein's -- 16-23 years old, 80% female. That's because "there's a growing segment of consumers who want high quality and something different to wear," said Charles Wang, the company's chief marketing officer.
Users are discovering Body404 on Facebook, Google and, in particular, TikTok. Click per mille (CPM), a way to measure return on online advertising spent, ranges from $3-$5 on the short video app, while CPM on Facebook in comparison stands at $10-$15, according to Zhang.
Unlike some companies with Chinese roots that try to obscure their origin, fearing an increasingly negative perception of "Chinese companies", Body404 wants to "rebrand what it means to be made in China."
"We don't want the border between China and the world to close down. We want to show the world what Chinese designers look like," said Zhang.
Corrected funding amount.