Melbourne luggage startup July has launched in the US, with early sales surpassing targets among a more vaccinated and more mobile consumer base.
July was founded in 2018 by Richard Li and Athan Didaskalou, who set out to ‘reinvent the wheel’, redesigning lightweight suitcases from the ground up.
But, when the COVID-19 pandemic struck, bringing with it both international and domestic travel restrictions, they saw revenues begin to fall.
“We were in a very serious situation,” Didaskalou tells SmartCompany.
In Australia, 2021 hasn’t brought much improvement. So the co-founders set their sights on a market where people are on the go again.
According to Our World in Data, just 59% of the US population has had at least one jab, compared to 28% in Australia.
Domestic flights are back in business, and as consumers embrace travel again, they are also looking for innovative accessories.
“The response has been fantastic,” says Didaskalou.
“It’s just chalk and cheese, after being locked up for so long, going to a market that flies regularly.”
Julio has also attracted national press coverage in the US, securing the feature on CNN, Fortune, GQ and Vogue.
Since launch day on July 1, the startup has sold more than 1,000 boxes in the US, more than ten times its expectations, Li says.
“We had a very modest prognosis,” he explains.
“The market has opened our eyes … we couldn’t follow the day.”
And the demand continues to trend upward. In July, 70% of the startup’s revenue came from Australia, and around 30% came from the US.
This month already, more than 50% of the income has come from the USA.
Trial and error
It’s a huge market, and the July produce has clearly resonated.
Competition in this sector is quite stagnant, globally, explains Didaskalou. The pandemic has also meant that many new players have not entered, while some have left.
“The market share is almost all of Samsonite and its subsidiary brands.”
People are hungry for “freshness” and something new and innovative. The couple also like to think that American customers are drawn to the ‘Australian’ vibe.
Julio also offers customization, with various fonts and colors available, and 14 different languages, plus emojis, of course.
About 70% of the cases the team sends to the US are personalized, explains Didaskalou. And all that customization and shipping work is done from Melbourne.
There is a balance that can be struck here between bringing foreign clients into the Australian experience and maintaining the small business touch, while also adjusting the marketing and customer service to cater to a slightly different audience.
There is an element of trial and error, Li explains.
“If something works in Australia, it doesn’t mean it will work in the United States.
“We have to adapt those ads and those messages and also try to localize as much as possible.”
For example, the US website uses US spelling, not Australian. It’s a small thing, but it helps create the best possible experience for those customers.
If an Australian saw the word ‘personalization’ with a ‘Z’ on a local retailer’s website, “you would instantly be upset about it,” adds Didaskalou.
Australia on hiatus
This is all positive news for business, but it is bittersweet.
This is an Australian growth business, and the founders want to be able to continue their growth in their local market.
My conversation with Li and Didaskalou literally started with jokes lamenting the lockdowns and vacations that we have all had to cancel.
We’re chatting about it happily, but it’s hard to see this market completely out of action.
“There is an emotional and human side, where the confidence of traveling no longer exists,” says Didaskalou.
Not that the Australian market is no longer a focus, she adds. Rather, it is on hiatus. And the American opportunity is too great to pass up.
“Business in the US is just phenomenal,” she says.
“They literally have 15 times the population, and the demand for travel is great … It has always been in the blueprint for world domination. I think COVID just sped up the US process.”
More cash on the cards for July?
Launching into a whole new market when you can’t have boots on the ground would have been unthinkable just a few years ago. There is not necessarily a playbook here.
But Didaskalou says that success comes down to “very good partners” and the willingness to take a call at any time of the day or night.
“We are working day and night,” he says.
Similarly, Li points out that the COVID-19 pandemic means that people understand much more that face-to-face meetings are out of place. Offers can now be made through Zoom meetings.
And that goes for both business partners and VCs.
The successful launch in the US has also accelerated talks about another round of funding. This time around, the founders are targeting American investors.
“We already have a couple of calls lined up,” Li says.
“Our goal is, while we wait for Australia to recover, we will continue to sell in the US, continue to ship to the US, and raise capital from US VCs.”
COVID-19 has “basically normalized” capital raising on virtual calls, he adds. Nobody flies to New York to chat and have coffee anymore.
“It kind of worked to our advantage in a way.”