“Spain is about more than just price” #LTM138

The Spanish brands are much more agile.

It's a dynamic market, not only driven by price.

The European people think that in Spain you need to bring price.

It's not only about having the right price, it's having the right service.

It's having the capacity to play around the return issue.

Let's Talk Marketplace the Marketplace podcast with Ingrid Lommer and Vana Ritistu.

Welcome back to another episode of let's Talk Marketplace.

I'm Ingrid, your host, as always, and today we will do some more traveling together.

Regular listeners might remember we did a deep dive on the French fashion market last year with Deborah.

And yeah, she was from the Marketplace consultancy, the Agent.

And I distinctly remember her passionate plea against brands working with fast forward fashion giants like Shein.

So that's where I got the idea from that we might dive a bit deeper into this topic and go to another key market in Europe.

So let's head a bit more south towards Spain because that is a very fascinating landscape as well and maybe even more than France because here on the one hand the influence of Chinese player is even more massive.

I think she and Timo Aliexpress all shaking up the ecosystem.

And on the other hand, the Spanish e commerce scene is by far not as much developed as the French one.

So fighting back could be a bit harder.

But, well, you know what, what do I know?

I'm not the expert for the Spanish market, but fortunately I know someone who is.

That is a colleague of Deborah's and an absolute expert on the Spanish e commerce sector, especially on fashion.

So a very warm welcome to Romain Emerich, managing partner of the Agent.

So, Romain, it's really great to have.

You on the show.

Thank you, thank you for the invitation and happy to share a bit of knowledge.

I don't know if I'm the real expert of the market, but at least I will share some knowledge and understanding of a country which is very different from France or even Germany and uk and happy to share some experience that we have and that I have in the Spanish market.

Yeah, really, really cool.

I'm looking forward to that.

So maybe to start off, why don't we go a bit deeper into this?

You're a Frenchman yourself, Justice Deborah.

So what do you have to do with the Spanish e commerce market?

Well, I have a long story with Spain actually.

I am a French guy, but I've been living in Spain for more than 30 years and working into fashion and e commerce environment.

So I have a quite a good knowledge of the Spanish market in terms of fashion.

Distribution and not only E commerce.

I've been running some brands myself into the Spanish market and then I had the chance a very long time ago now to set up the Spanish subsidiary of vp.com into the Spanish market at that time and now co managing the agent as well.

And we settled ourselves more than three years ago into the Spanish market.

We have some teams over there with a deep understanding of the complexities of the market, but also because it's a market, in my opinion, that goes into two directions for the fashion industry.

There's a very, very large attitude into fashion.

So a lot of brands, a lot of brands with a DNA that can international but also a market with some key challenges.

We will talk about it I think later on.

Key challenges.

Firstly, because the actor, the player that used to be the king, which is El Court Ingles, has set up into the marketplace and environment some time ago, but with a particular approach.

European players such as Asalando, American such as Amazon, are strongly present into Spain.

And since some years now, first with Aliexpress, then with Meravia and now with Shin Otemu, there is a strong attitude from the Chinese players.

So it's a tough market.

Very interesting, very challenging, quite.

I would say very dynamic, but very different from other markets into Europe.

Yeah, absolutely.

Looking forward to that.

So Chinese players having attitude.

I like that expression.

I think we have to dive deeper into that a little later after a very short advertising break.

But the bureaucracy and language barriers and the logistics.

Yeah, these are yesterday's excuses, to be honest.

With Kaufland Marketplace you can sell quickly and easily in seven countries and scale your business.

Kaufland removes multiple hurdles at once with an integrated EPR service, professional translation tools and the Kaufland shipment solution.

And your software, if you've got plentymon or GTL or Bilby or whatever.

All major providers are already integrated, so the workflows are in place.

All of this and much more is available starting at a base fee of 39.95 per month.

So register now on Kaufland Global Marketplace.

You'll find the link, as always, in the show notes.

Okay, Remaan, and then let's go into it because something stuck with me from your introduction when you said when you were building up VP for The Spanish market and entering Spain as a person very deeply involved in the French fashion ecosystem and now coming to Spain.

So what do you say in like, in one sentence, how different, in what way is the Spanish market different from the French market when it comes to fashion?

When it comes to fashion?

Firstly, today, if I look at the knowledge that we have today, I see that the Spanish brands are much more agile.

So at the end of the day about the market, I would say that it's a dynamic market, not only driven by price.

Okay, Most of the, the people, let's say, and the European people think that in Spain you need to bring price, it's part of being right, but it's also bringing the right level of service.

For example, the return process when you want to sell in Spain and the return process of the, of the marketplaces in Spain needs to be adapted to the habit of the consumer.

I give you an example.

When you buy on Kotinglis, 70 to 80% of the returns go back within the stores.

So you need to be able to pick up those returns at the stores and bring those returns to you.

Because the habit of the consumer buying on Kortingless is that he goes quite often to the stores and he brings his return to the store.

So at the end of the day, the complexity to run the Spanish market, it's not only about having the right price, it's having the right service.

It's having the capacity to play around the return issue according to the expectation of the consumer.

And it's a market very dynamic into proposing new innovation, new products, new new trends.

It's a very dynamic market in terms of fashion trends.

And this is not very known from people outside Spain.

We have, unfortunately, the visibility most of the time of if I want to sell in Spain, I need to have the right price or the right promotion pressure.

It goes very much further than this.

And in a way, this is why Chinese websites went quite fast into Spain, because they understood this point.

Not only the pricing, not only the, let's say, good product at the good price, but also this, this, how can I say this capacity to bring a lot of novelties on a short period of time, matching the right trend.

And if you look at a killer player like Inditex and Zara, this is what made them being successful worldwide.

It's not only because of the pricing, it's because of having the right trend at the right moment.

And the consumer in Spain is looking for this.

That's an interesting point that you're raising there because that's normally what we reduce the success to the Chinese players too is because they are cheap and they can offer stuff in the most cheapest area of the entry point, point, price.

Price points that no one else can go to.

But if I get you correctly, you're saying, yeah, they do that, but they also understand that they don't.

They can't just sell any stuff, any.

Anything that is not fashion, that is not up to date or that is not, I don't know, going for the trends or whatever.

So.

So you would say that she is as much a cheap player in Spain as it is a fashion player.

Yeah, I mean, I'm going to be very honest and I have the same culture of Deborah here in France.

We are, we are quite all the fashion industry.

We are quite linked together about, you know, about being very, very careful about those, those players such Sheen.

But I would say that apart from the pricing point, mostly due to the fact that the, the production system of Shein is very, very industrialized and very, very, very aggressive.

So this is why price point is an option for them.

What I look at Shein, it's also the fact that they are, and I want to say maybe unfortunately for the European brands, capable to bring very quickly the trend and the right.

And in Spain, a player like Sheen, a player like AliExpress that was on the market before Sheen, are capable to bring this to the Spanish consumer.

And the Spanish consumer is maybe for myself, unfortunately, looking a bit to that.

As I said in the introduction, what also struck me about the Spanish market is especially if you compare it to something, a market like France, also Germany, what struck me is that there is such a lack of local, strong local players.

I mean, there is El Cotti Ingles, but apart from that, I had trouble finding anyone.

So.

Yeah, was that, is that correct from your point of view?

It's the particularity, this is right also into Italy, you know, so at the end of the day, this is the particularity of southern European countries.

Very first of all, Spain, it's very centralized country.

You know, you have Barcelona, you have Madrid.

And all businesses are very, very centric in those two areas.

So all businesses that, that were born are at the end of the day very, I want to say, very, very single.

So Cort Ingles is a heavy elephant.

From the brick and mortar historical distribution into Spain with I think more than 100 stores came late into the E Commerce, but being very strong into E Commerce very soon because there was no other option at that time.

But like Italy, in terms of local option for fashion, you don't have that many things.

So this is also very interesting to understand that for foreign players such as Amazon, such as Zalando, Chinese, there is an option to be considered as local.

But in my opinion, except a bit for the Chinese.

An example, Meravia, those players didn't really play the game to be local.

For example, Amazon went very late into Spain with a local entity with local teams.

Zalando did a try get out and now he's starting to come back step by step.

In those countries, if you want to be successful, you need to be perceived as someone local.

Local for the partners you partner with.

So in our ecosystem is brands, but local towards the consumer because you don't run the business and you don't sell the same way into Spain than into UK or Germany.

And my understanding of how companies run the Spanish market sometimes is that they don't play local.

Well, then let's talk about the local player for a second here.

Cort Ingles.

It's one of those marketplaces that I always hear about in a negative way, actually, because German brands come to me and say, what is up with those guys?

Delacorte Ingles, why can I only upload my products with Excels or CSVs or whatever?

So why is all the RP so bad?

Why is the connection bad?

Why is it so difficult to sell on Alcottian glaze?

But from what you said up to now, I gather whoever wants to conquer the Spanish market won't get around El Cortian Glass.

Is that correct?

It's correct.

It's correct.

And there is a but.

But the but is changing a bit recently.

Courtingless is a department store, as everybody knows.

And like Galeries Lafayette here in France.

I don't have the knowledge that much for the German market, but I know it's also the same into uk, into the department stores.

The buying teams have a kind of decision power.

Okay, so first of all, into Coatingless.

Any brand willing to be on Coatingless, they need to have the approval of the buying team.

Okay, so that's the first approach, is that the marketplace team, which is in a way not really a marketplace because it is called the digital corner.

So it's a kind of hybrid marketplace run under a miracle, which is a specific miracle account, very complex to handle.

The cuttingless approach for a brand, first of all needs to be included into a global strategy into Spain.

It will be very rare.

Unless you have a big brand and a big name and a big brand awareness.

It will be very rare that Coatingless will take some brands coming from abroad without a proper distribution strategy into Spain it means wholesale, it means your income that you are yourself selling into into Spain.

Why not when you have some traction and some identity play retail as well.

And definitely it's starting to change a bit recently, but if you were not in the stores of Cortingless, you were not going to be able to be into their corner digital, which is the marketplace.

This is now starting to change because we all know that getting out of COVID things have been a bit more difficult for Ecom players and Kot Ingles is now a bit more open in terms of their strategy to welcome brands.

But the approach of such players, and in a way the approach that we consider and we share at the agent is when you want to go to a market, the marketplace by his own won't be enough for you to be successful in this country.

Yeah, well, if encoding glaze is still so difficult to get into, even if that is changing, we will have to look for other options here, which we will do after another short break.

We are quick to call out marketplaces for bad merchant services or shoddy integrations on this channel, but let's face it, building a marketplace is not an easy task.

Software setup, integrations and all the technical details make it challenging enough.

And then there's the questions.

How do I get strong, high quality sellers for my platform?

That's why our new partner Octopia can help.

It's the first fully integrated suite of marketplace services developed by an actual marketplace operator.

Behind it is the French generalist CDiscount.

With 20 plus years of experience, over 2 billion GMV, 450 specialists and 10,000 vetted sellers, Octopia's mission is clear.

They acquire the sellers for you, onboard them fast and drive the performance so your marketplace can scale without complexity.

Octopia stands out with its operational strength, targeted sellers sourcing onboarding in just three to five days, pan European fulfillment sponsored product solutions and access to 100 plus marketplaces.

That's why Octopia delivers fast scalable growth that's proven across markets.

Whether you want to diversify categories or accelerate your internationalization or reduce dependency on a handful of of sellers, Octopia delivers scalable growth without operational headaches.

If you want to know why platforms like Rakuten, Allegro, Cdon or Fnect trust Octopia, listen to our podcast in two weeks in that episode and buy one of the customers of Octopia will reveal how their platform leverages Octopia to support its large scale European expansion.

Or you can also take A look at our company portrait on our website.

You'll find the link in the show notes.

Okay then, Romain, let's talk about what we can do as a German or UK brand that wants to go to Spain and maybe doesn't have that kind of Spanish distribution strategy that you've been talking about that Corta Ingles wants or they just want to try out the market which marketplaces can, should they go for?

So it really depends of course on the, on the positioning of the brand.

My expertise has been always into, let's say lifestyle and more premium, mainstream, premium brands.

Myself, I've been working into different brands into the Spanish market and now after vp, running the, say the strategy of the brands, working with the agent.

So I would share a bit my expertise which is more into lifestyle and mainstream.

First of all, I think that you need to bring emotion, you need to bring high quality content.

So this is very important because at the end of the day, the consumer in Spain is, is looking for a trend.

As I was saying before, compared to Germany, the consumer into Spain is less rational.

Okay?

So at the end of the day.

They want to discover, they want to be engaged.

So at the end of the day it's important that you bring, as I was saying, this trend relevance.

You are very, very dynamic.

They buy fast.

The consumer in Spain, if they like, they buy.

Okay?

So it's very important.

It's maybe not that linked to the marketplace ecosystem, but they are very, very mobile.

So they are very engaged towards them buying and discovering and buying via mobile.

Okay?

So I think that the UX experience is very important.

They don't care that much about the checkout and they want a payment flow which is very, very, very, very lean.

Okay?

So these are the key areas of success for someone willing to sell into Spain.

In terms of options.

For a premium, mainstream, premium brand, you have of course Cortinglais, if you can be with them, but you have after international players.

So you could be on Amazon, you could be on Zalando, you could be playing with fashion outlet marketplaces like Prevailia, like vp, which we all know are trying to move from their original segment, which is only, only, only discount, to starting an entry season where you play with your current catalog at food price and when there are some promotional periods, you bring some discount and this is where you, you boom your sales.

But at least during all the season, you are catching the eye of potential new consumers for your brand.

At the end of the day, for the, let's say again, lifestyle, mentoring and premium brands, you have Other options than coatingless that will bring you local visibility.

I give you an example at the agent we run some brands on about you on Zalando on Amazon into Spain and we are capable to bring in those marketplaces.

When I take Zalando for example, we are capable to bring around 10 to 15% of their business into Spain onto one single marketplace.

For example, a brand which is on Zalando, we are capable for some brands which are not Spanish to bring them up to 12, 15% of their business in Spain.

Okay.

And we do it through what I was mentioning which is bringing a new trend, bringing a store, bringing high level content, bringing the right promotion at the right moment, but not only.

And it's working.

Okay.

So more of a broader approach in a way and not like looking for one or two or three particular marketplaces but more like which product, which of my products would fit at what time, on what platform?

Yes, we are working with nothing to do too much with fashion, but we, we've opened successfully Decathlon also in Spain.

Decathlon has a.

Has quite a good footprint into Spain because it's in Europe.

If I'm not wrong, it's it's the second or third market before they acquired the German player.

Spain has been always a very good market for decathlon.

So they have a footprint into offline and their E Comm and marketplace is quite successful and quite successful for non Spanish brands.

Interesting.

Let's talk for a second about Solano because you said in the beginning they don't have that of an easy relationship with this market going in, going out again, now, coming back in.

So how does Zalando at the moment go for the Spanish market?

What are they doing here?

What kind of brands are they accepting here and is that maybe different from what they are going for in France or in Germany?

No, I think I know quite well Eloisa who is operating and managing the country with the team.

I think they have a very similar approach towards the French market or the Italian market market.

They're being very selective in the brands they are willing to catch.

It's maybe a market compared to France and Italy where they are maybe a bit more behind in terms of the brands they are willing to have on board.

They were very strong since a very long time into the shoe category because of course there is a long and historical tradition into shoes in Spain.

But they are now you have very beautiful brands arriving into Zalando in Spain such as Scalpers, Brownie and those brands are matching completely Zalando current DNA.

So I think that when I compare Spanish brands to French brands, for me Spanish brands were able to go abroad and far abroad much stronger than France.

Okay, The French brands for me when they are abroad, they are in Belgium, they are in Switzerland, but not much further than this.

And the Spanish brands are having the capacity to go abroad much stronger.

You have a lot of DNVBs Digital native brands that are very strong in Germany, such as we run some of them.

For example, Tropicfeel, which is an outdoor shoe is selling very, very strong in Germany in dtc.

And those brands are coming step by step now into Zalando because I think that at the end of the day Zalando, with the country rich they have are bringing to the Spanish fashion brands an attitude which is at the end of the day matching what they were doing, doing themselves into wholesale.

Spanish brands are very well established in countries like uk, like Germany, of course, like Latam, some of them are very strong in Korea.

So there is a knowledge of going international since a very long time into fashion brands.

And I think that by the diversity of countries that Zalando has been developing into their partner program over the last years, it's matching quite well the DNA of the Spanish brands.

And when I look at, for example, I don't know, I can give you examples of some brands we run into Spain that are going multi country with Zalando.

They don't do more than max, max, max 30% of their business on Zalando Spain, very max.

Then, then the rest, the rest is of course they are strong in France, they're strong in Italy, strong in Germany.

Some of them are doing very well in Switzerland, very well in Poland.

I was very surprised about the business that some shoe brands from Spain do in Poland.

Very, very surprised.

So yeah, that's, that's how I see a bit the topic on Zalando and in my opinion, I feel, I'm feeling at least in the last two years Zalando betting quite strongly into Spain because they saw that with the level of brands having in Spain, if they can enter those brands into Zalando they will have what I said at the introduction of this, of this, of this discussion, they will have the capacity to be seen as a local player because they have the local offer.

And Zalando is calling this the local hero brands.

That's interesting.

As we're talking about the local hero brands.

I think there's another player that we can address here because they are targeting this area as well and that is TikTok Shop as many Chinese players They particularly chose the China, the Spanish market to start on continental Europe, apart from UK of course, which I find interesting because that was TikTok shop, that was also Meravia and others as well.

So how is TikTok shop doing in Spain at the moment and what do you expect from them in the future?

So I'll be a bit transparent there.

I'm not a very, very, how can I say, I don't know the TikTok shop that much, but we've been deep diving a bit what they were doing here in France also into UK.

For me, TikTok is matching the Spanish consumer DNA.

Why?

Because I said to you before that the Spanish consumer is mobile first.

Okay.

So the attitude and the feed of TikTok is matching this young consumer, this young Spanish consumer is matching also the fact, and this is in a way the Chinese approach, the fact that it's, let's say the right product at the right price because like in France, like into UK global fashion brands, let's say strong brands into fashion are not in TikTok yet.

They do some test, they do some test and learning, they try.

But at the moment for fashion brands it's not a destination.

And in Spain is the same.

When you talk to Spanish brands about TikTok, they've tried, the engagement is poor, results are not that important.

But it's working for the brands we were saying before, which is, I don't know, the right T shirt at the right price, it's working for cosmetics.

But for the fashion brands, we're talking about lifestyle and more mainstream, it's still not a destination now, even though I think that like UK social commerce into Spain in my opinion will go faster than countries like France, maybe like Germany, where we are more traditional in our way of buying or way of spending.

And I think as well there is a consumption in Spain you have two rhythms of consumption.

You have, let's say the older mentality, older consumer who continues to go to a coating list, for example, okay.

And you have the younger consumer, very mobile, engaged, looking for trends, looking for novelties, going to buy abroad and matching a sheen, matching a TikTok.

But brands are not, are not capable right now to engage with this, how can I say, with this audience and we see it also in France, the beginning of TikTok in France for fashion is not easy.

And from the brands I'm talking to in Spain is the same.

Interesting.

Yeah, because that's what I directly thought about TikTok Shop.

When you're talking about the young consumer, the fashion driven the people who try to try out D2C brands and stuff like that.

So I was like, yeah, that sounds like TikTok shop.

So are there other established brands sort of sleeping on the trend here?

What I would say something that has been working quite well into Spain and we will go a bit outside fashion and we will go more to sports and outdoor is, is trading.

Okay.

So trading marketplace with every specificity they've been building apart from each different sport categories, they are very, very successful in Spain.

Very successful.

So they are not that capable to go outside the border.

But for sports brands into Europe, in my opinion, you need to be in a player like Tradit because they are very well established to Spain.

Interesting.

I'm looking a bit at the time, but I'd like to rise one last topic and that is secondhand because when I was talking with Deborah on the French market, she really insisted on saying we can't forget about Vinted and how much they have grown in France.

And when I was doing our last update of the Spanish marketplace quadrant that I'm doing on several countries in Europe which are the most relevant marketplaces in this area, I did the same there and put Vinted up, which I hadn't had before.

So how important is second hand in your opinion for fashion e commerce in Spain?

At the moment?

I would say it's less mature than a country like France.

So Vinted is there.

But it's interesting to deep dive on a local player which was born before Vinted arrived, which is called Wallapop.

So you have, you have a local player which has got.

I think that compared to.

I tried to get a bit of data before this discussion.

They have three or four times more unique visitors than Vinted into Spain.

So it's within the B2C fashion secondhand starts to be away into Spain, but it's a trend that arrived much later and it's gonna take a bit of time.

That's, that's my, that's my opinion.

Interesting.

Okay.

Right then I guess let's wrap up this discussion with maybe your last tip for everyone starting out in Spain.

What kind of mistakes should a foreign fashion brand avoid when they start in the Spanish market?

So I will go back to the fact that you need to apply for a local approach.

Okay.

So that's for me the first one.

So local approach, the first of all is assortment.

So sometimes you see brands going with the same assortment in each of the countries.

So I think that you need to get at first the appropriate local assortment according to which marketplace or which, which network you're going to go.

That's, that's very important.

You need to be selecting the right partners.

I don't think that I see sometimes a lot of brands that we discuss with before partnering.

I want to do 5, 6, 7 Marketplace at once.

So if you go tomorrow to Spain, you need to be selective.

So if you have the capacity, because you already have a distribution to enter to Cortingless, you need to play with Cortingless and maybe with Amazon or maybe with Zalando, depending on your categories or your positioning.

But you don't have to deep dive in four or five options.

So that's the second topic.

So first, assortment.

Second, being selective in your strategy.

Third, as I said, I think in one of the topics before, what content you push.

Okay.

So you need to be very, you need to be perceived as trendy, as bringing innovation, bringing fashion.

You have a strong network into Spain of sustainable brands.

There is in my opinion, if I compare Spain to France, I am happy to say that a lot of the new brands that came in in the last eight to five years, they are very, very strong into sustainability.

So if you can bring to the Spanish market this attitude by your DNA, by the type of products you have, I think that play this card because sustainability is recognized and important into Spanish market.

Okay.

And then this you have, you need to have it.

If you are a brand with no promotional DNA that you feel that promotion is going to hurt your, your positioning is going to hurt your image, which is completely understandable.

You will miss this part about pricing, pricing sensitiveness of the Spanish market.

But I want to be very, very transparent.

It's not the only entry point.

Yeah.

But still an important one, I guess.

Okay.

Right, Roman, So thank you very much for your insights on the Spanish market.

I think that gave a lot of fashion brand some food for thought.

So thanks to you all for joining us and for listening to us.

I hope it was helpful and if you want to do join us again in two weeks time while we talk about another new and interesting marketplace player which is on Buy, who's now coming to continental Europe.

Yeah, that should be nice as well.

So.

Right.

Thank you very much.

Thank you, Ingrid.

It was nice to be with you and I hope that I would will I will be able to give a little key of entry to this beautiful market.

Absolutely.

Byebye.

Bye.

Bye.

Bye.

You listened to let's Talk Marketplace, the Marketplace podcast with Ingrid Lommer and Vanari Dichtel.