Noa and Bryan Ries of Vie Active.
Cracking the billion-dollar American market is a goal for many Australian entrepreneurs. Fitness wear and technology are among the lucrative industries for Aussies to target. So what does it take to make a dent in the US?
Sydney-based activewear company Vie Active has just established a foothold in the US market.
Researching the US market thoroughly is key.
“As a premium brand we are at the upper end of the mid-market, which is a very niche segment here in Australia, and so the goal from the outset was to build a global brand with a local voice,” says Noa Ries, co-founder of Vie Active.
“Global sales for the sports fitness and clothing industry are projected to reach $US180 billion by 2018 with a CAGR (compound annual growth rate) of 6.8 per cent from 2013 to 2017. The US is obviously a huge market and so the opportunity is really rather significant.”
Ries launched her label Vie Active in May 2013 with eight Merino styles and a mission to take the Australian beach-lifestyle to the world, via activewear.
Noa and her husband (and company co-founder) Bryan Ries, who was born in America, have been travelling to the US for some time and have friends, family and a number of Vie Active ambassadors who provide insights into that market.
Last March, they were invited by American gym chain Equinox to run shows of the brand in 10 of their flagship locations in Los Angeles, New York, Florida and Texas.
“During that trip we also met with additional buyers, press and strategic financial partners and secured a third party logistics solution based in LA to manage warehousing and distribution within America.”
Researching the US market thoroughly is key. Even before Sydney tech company Productify was formed, they did their market research in America.
“When we first had the idea, our initial market research was in the US. Because we believed that if there wasn't a similar product in the US then we would start the company,” says Dean Steingold, the co-founder of Productify.
Productify has built a B2B service that specialises in sharing product information between suppliers and their online retailers.
Currently, their focus is to become a standard in the Australian market.
“Within the next six to 12 months, our plan is to set up an office in the United States and start getting more and more customers there and hopefully become a standard in that industry which is our end goal,” says Steingold.
He says all this involved trips to the US. “It also involves a lot of market research in the US, a lot of Skype calls and phone calls to people we know in the industry and to clients we have in America.” His research includes keeping up-to-date with the technology used to share product information.
How important is a well-planned strategy with specific goals and targets for entrepreneurs heading Stateside?
“I think it's very important to have a clear view of what they want to accomplish,” says Peter Mace, general manager of the Australian Institute of Export.
“Who would lead the charge, so who in the company would be their frontperson over there? How much money they have to put into the marketing and set-up? How would they cover production increases?”
The non-profit Australian Institute of Export runs education courses focused on the process of export for those looking to go international.
“Most people think that the States is going to be really easy,” says Ian Smith, the founder and managing director of United States Connect, an online one-stop shop for companies eyeing trade in the US.
United States Connect lists information about setting up a US bank account, finding distributors, getting logistics sorted out, intellectual property. Exporters pay a nominal membership fee, while service providers - who Smith says have been rated by the community - pay a subscription fee to be listed on the site.
“It's still the largest consumer market in the world, but that also makes it the most competitive market.”
One of the things that companies find helpful is talking to someone who's been there and done it, says Smith.
As Noa Ries did. She met a number of Australian entrepreneurs who've made the leap into the US.
The US, she says, has always been part of Vie Active's overall strategy. As a new brand the initial focus was on Australia. “Our US strategy is continually evolving, especially as we see increased demand from US consumers and retailers. Part of our strategy has been to put in place a robust and scalable infrastructure for the US that complements our existing Australia investments.”
The company has a warehouse in Los Angeles which will manage distribution for the entire country. Over the next 12 months they intend to build a small, local team to help run the business.