From now until 2025, we will not change our online strategy and will not have a store.
Coolmate, a menswear brand that delivers products directly to customers via D2C E-commerce, has raised $2 million in a Series A funding round led by Access Ventures. Before that, Coolmate was invested 500,000 USD from Mr. Nguyen Hoa Binh, President of NextTech Group. The company currently has more than 100 employees.
Founder and CEO Pham Chi Nhu recently shared with Nguoi Dong Hanh the business story as well as the development orientation of this startup.
Investors are shareholders, support Coolmate when needed
– Your startup has just been invested 2 million USD. In your opinion, why is Coolmate “the chosen one”?
– I think there are several main reasons that make Coolmate attractive to investors such as good growth, profitability and the company’s model is working well. Besides, there are some external factors, fortunately such as e-commerce is the trend, the offline shift to online is very strong.
– Could you please share the role of investors in Coolmate?
– Coolmate has just received 2 million USD investment from 4 funds. Investors stop at the shareholder level, providing more support when Coolmate needs it. The rest, Coolmate is not monitored or interfered in business activities. That is the story of unity from the beginning before raising capital.
Funds support us a lot in terms of technology and NextTech supports us a lot in e-commerce, market…
– Going back to the time of the Covid-19 pandemic, how was your company affected?
– Last July, some factories stopped production, Coolmate’s sales decreased by about 50% but fortunately we maintained the team. Some units do triples on site and so is the operation. When Covid-19 subsided, Coolmate returned quickly, still had plenty of stock for sale and was operating as usual.
After September 2021, Coolmate is growing at about 30% a month.
By 2025, Coolmate will only focus on online
– How does Coolmate operate and are the factories owned by the company?
– Coolmate cooperates with the links in the supply chain of the garment industry. We localize 100% from fabrics, textiles and products sewn at factories in Vietnam.
We send all fabrics, threads, buttons, designs to 7 garment factories to make products. Thus, Coolmate can completely control the input materials.
– Recently, the price of raw materials for the garment industry has increased, has Coolmate been affected or not?
– Since the beginning of the year, the price of cotton yarn has increased by more than 10%. As input costs increase, the company’s profits decrease. Most recently, the company required a product code and clear notice for a low-margin, 100% cotton product. That product is at 99,000 VND and after adjustment is 119,000 VND.
– What products are selling best at Coolmate?
– Underwear is our best-selling product, followed by polo shirts, T-shirts. At the end of this quarter, Coolmate will sell more sportswear.
– The company is focusing on online sales. Will the business go offline in the future?
– Coolmate is selling online and mainly on the website. Besides, we sell products on e-commerce platforms but the percentage is small. From now to 2025, we will not change our online strategy and will not have a store.
– Why did you choose men’s products, not women’s products?
– I’m not a fashion expert and don’t know much about design. And when it comes to design stories, the inventory is huge. Besides, design is not Vietnam’s strength. Vietnam’s strength is in manufacturing, so I chose a minimalist approach in design, focusing more on production.
– How is the inventory in the fashion industry and what is the status of Coolmate’s inventory?
– Coolmate has little inventory, about 1.5 months of sales. We optimize by producing little code and no collections. There are shirts from our establishment to the present, we still sell, this reduces inventory. Besides, Coolmate has a pre-order sales program, so the inventory is also reduced.
– Are there many models like Coolmate in Vietnam market?
– I don’t see many of you focus on online. You still want to open a store, focusing on the wholesale channel. This is the good and safe way. And Coolmate wants to focus on online because my opinion is that startups want to go fast, they have to focus on what they are doing. Coolmate chooses men’s clothes, definitely won’t choose women’s clothes until 2025.
The two things Coolmate chose to do was focus on online and not make womenswear.
– It seems that women’s fashion is very “terrible”?
– Doing online, women’s fashion will not be effective because women need stores to see and try on clothes. Currently, e-commerce in Vietnam is very new, unlike in China and the US, where people have been shopping online for a very long time.
Besides, changing the customer is changing the whole process. If making womenswear, Coolmate needs to have its own design team as resources, design team and like starting a new startup.
Coolmate will only focus on online.
I find Coolmate suitable for an IPO in 2025– Coolmate aims to IPO in 2025. Could you share more about this story?
– Coolmate has an IPO roadmap in 2025, with shareholders investing in, this is an exit opportunity. As for Coolmate, the IPO is the destination. In general, for startups, an IPO is a good way to enter a new, much more scalable stage.
Coolmate is aiming to make 100% in Vietnam, sell to Vietnamese people and hope to IPO in Vietnam because it’s more of a community story.
There are many doors for startups, but an IPO is a good way to grow.
– Do you think Coolmate’s IPO is too fast?
– I don’t think it’s fast and it depends on how you go. Coolmate focuses on doing and doing very aggressively. Coolmate’s way to go is to grow 3-5 times/year. For me personally, I find it suitable, comfortable.