FABricating A Global Future

E-commerce 3.0 is about super-targeted personalized curation and social sharing. Fab, which pivoted from a social site for the gay community to a fast-growing flash sale site for design, selling everything from furniture to art and jewelry, is one of the most successful plays in the space to date. About 50% of customer acquisitions are a result of social sharing, says CEO and co-founderJason Goldberg, a scheduled speaker at DLD 2013, with some 25% of its daily traffic coming from Facebook.

Goldberg is out to make Fab, the start-up he co-founded in 2011, nothing less than “the world’s greatest design store.” So after watching innovative U.S. start-ups in other spaces get both cloned and clobbered abroad he decided to move quickly and authoritatively, snapping up two young European design sites in the first half of 2012: Germany’s Casacanda and the UK’s Llustre.

The teams from the two European start-ups were merged, an office set up in Berlin, and new hires brought in. Today Fab has 180 employees in Europe drawn from all over the world; it is preparing to set up a warehouse in the Netherlands and plans to increase the number of products available on the Continent to 15,000. The company currently attracts 30% of its 10 million subscribers from Europe but the goal is to significantly increase that this year, says Goldberg, a scheduled speaker at DLD 2013.To that end, Goldberg has recruited Maria Molland, who formerly worked for Yahoo! and Thomson Reuters, to run Fab’s European operations.

Fab has also set up operations in Pune, India, and is planning to further expand its footprint with the $105 million its secured in a third round of funding in 2012, led by London-based venture capital firm Atomico. “Atomico is giving us great guidance as we look to other markets,” says Goldberg. “They are so well connected. They have introduced us to people and teams and helped us scout out markets like Japan, Turkey and Brazil as we start to lay out plans about when is the right time to enter those markets.” What’s more, says Goldberg, Fab is benefiting from the experience Atomico founder Niklas Zennström, a co-founder of Skype, has in building global brands.

E-commerce 3.0 is about super-targeted personalized curation and social sharing. Fab, which pivoted from a social site for the gay community to a fast-growing flash sale site for design, selling everything from furniture to art and jewelry, is one of the most successful plays in the space to date. About 50% of customer acquisitions are a result of social sharing, says Goldberg, with some 25% of its daily traffic coming from Facebook.

Goldberg attributes the company’s strong growth  to the fact that the site has personality, in contrast to traditional e-commerce sites, which tend to be boring. “We set out to have an emotional relationship with our customers,” says Goldberg. “We are colorful, modern and spunky and people want to be a part of that. We want them to feel like they have to open their mobile app and see what is on Fab every day because they might miss something if they don’t.”

In order to not just attract customers – but also keep them coming back – Goldberg is working on the supply chain and logistics side of the business. “We are spending tens of millions of dollars on a warehouse in the U.S. to get products to customers as quickly as possible. We are aiming for Amazon-style speed, which is what it takes.”

FAB by the numbers

10 million members

Presence in 26 countries

More than 4 million products sold in 18 months, or 5.4 sales per minute

40% of sales via mobile

56% of sales via mobile on Christmas Day

2/3 of daily sales from repeat customers

Several $1 million-sales days in 2012

30% of sales come from Europe

But it’s the site’s passion for all things design that is ultimately the company’s greatest strength, Goldberg says. The strength of the brand increases the company’s ability to produce its own branded products and that “is a very promising proposition,” he says.

Goldberg attributes the company’s strong growth  to the fact that the site has personality, in contrast to traditional e-commerce sites, which tend to be boring. “We set out to have an emotional relationship with our customers,” says Goldberg. “We are colorful, modern and spunky and people want to be a part of that. We want them to feel like they have to open their mobile app and see what is on Fab every day because they might miss something if they don’t.”

Eventually Fab envisions opening its own bricks and mortar stores. “Will there be Fab stores some day? Absolutely yes,” says Goldberg. “But it is not something we are rushing to do. We need to get one thing right at a time.”

For the moment, fabricating a global future online seems to be keeping the company plenty busy.

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