CEO Kiyan Foroughi on his journey from Wall Street to worldwide.
From investment banking to winning investment, Boticca chief executive and co-founder Kiyan Foroughi has come from outside of the industry to build a leading online jewellery and accessories marketplace. He discusses finding a gap in the market, international expansion and UK shoppers’ jewellery choices.
When you glance at your own jewellery or that of your friends and loved ones, each piece will have its own story to tell. Whether a trinket picked up on a far flung holiday, a family heirloom worn on the finger or a piece given in celebration, the emotional associations will always be treasured by the wearer.
Back in 2008, wandering through the medina in Marrakech, a young man working in private equity started to weave his own story. Stopped in his tracks by the work of a female jewellery designer, Kiyan Foroughi struck up a conversation about her unusual products. “This one designer really stood out; she was clearly a designer herself, with materials that were very different to those being used by the other merchants and retailers in the medina,” Foroughi explains. “She told us the story of how she grew up in the Atlas Mountains making pieces for herself, when her mother and her friends noticed her designs. Steadily, through word of mouth, she started selling to other women and her business spread to a few villages around the one she lived in.” Now in bustling medina, the young woman was travelling for four hours each day to sell her jewellery.
The encounter moved something in Foroughi, who purchased a number of pieces and was left inspired by her story and dedication to her jewellery. “I realised two different things: the power of a beautiful story, and how hard it is for small to medium brands and independent designers to sell their pieces and get their name out there,” he says.
With a career that had started on Wall Street, where he first cut his business teeth, Foroughi later moved to London to work for private equity firm TA Associates. After four years with the company, and following the Marrakech trip, he began some research and spotted a gap in online accessories retail.
While countless sites existed selling designer clothing, he plotted the idea of a jewellery marketplace – a venture where designers from all over the world could sell their products internationally and have direct contact with their customers, be they in Germany, Australia, Bahrain or Singapore.
With little prior knowledge of the jewellery industry, how did Foroughi set about creating a site bustling with design talent? “While still working at TA Associates I was doing plenty of research,” he states. “In the evenings and at the weekend I was scribbling down ideas, talking to jewellers and actually launched an alpha version of the Boticca website to test the concept and see whether it had legs.” It did, and Boticca became an official trading site in October 2010, two years after Foroughi’s chance meeting in the medina.
A GLOBAL MARKET
Of interest is the decision to launch Boticca as a jewellery marketplace instead of a regular retail site. For Foroughi the reasoning was two-fold and simple. Firstly, it means that the designers selling through the site make more money. They get 65% of their sale compared to the usual 30% to 40% as per most standard retail models, and Boticca takes a commission of 35%.
As a result, the amount of money a jeweller takes home selling through Boticca is far greater, and they can make to order without having to create stock for sale or return or to be bought by a retailer, which then might not sell.
“Secondly, it would have been very hard to emulate the whole experience of travelling with us as you shop, as with a marketplace you are buying directly from the designer and they are the ones sending the jewellery to you, packaging it, with a stamp from their country,” Foroughi explains. “It really adds to the customer experience, and when we ask out top customers why they keep coming back, they immediately say it is the feeling of travelling around the world when shopping; they like to be able to connect with the brand and the designers one-on-one and some have become friends with the designers through buying from them, which would be impossible to do if we were holding the stock.”
Foroughi works alongside Boticca co-founder and chief operating officer Avid Larizadeh, who joined to help launch the site publicly. Larizadeh, a Stanford and Harvard alumna, oversees the tech team at Boticca and has helped to create a streamlined, functional site. She has an enviable CV working for top global companies including Skype, eBay and Mind Candy, worlds away from jewellery retail but each has placed her in solid stead for her own business.
In fact, coming from outside of the industry is arguably one of the reasons why Boticca has grown so considerably since its launch. With Larizadeh’s business skills and digital expertise and Foroughi’s head for figures – he says, with a smile, that he loves crunching numbers – the duo’s understanding of margins, costs and investment has enabled them to launch a business ripe for investment.
And attract investors it has; in early September 2013 the business secured an additional $4 million (£2.44m) of financing from UK-based venture capital firm MMC Ventures and high net worth individuals in Europe, the Middle East and Asia, including Turkish entrepreneur Sina Afra, who is also the chief executive and chairman of Markafoni and former European director of M&A for eBay.
This cash injection was used to launch a French language version of its site, Boticca.fr, at the end of September last year, a move that has helped make France Boticca’s third largest market, after the UK and Germany.
Boticca has grown its sales and traffic 150% year-on-year without any significant increase in marketing spend, with 30% of its sales coming from mobile traffic.
According to Foroughi, 60% of Boticca’s sales are intercontinental, and about 50% of total sales come from Europe, with the UK the leading these. North America accounts for 30% of sales, and 20% come from Australia and the Asia-Pacific region, including Singapore, Hong Kong, plus the UAE and Bahrain.
About 75% of the total 350 brands sold through Boticca offer jewellery, with the rest selling accessories such as bags, scarves, belts and hats. Its analytics also show an interesting split in the styles of jewellery being purchased in the UK compared to the rest of the world, with personalisation and fashion jewellery a big trend among its UK shoppers, with such choices emulated by shoppers in the US.
In the Middle East and Asia bigger ticket items are popular – the most expensive piece of jewellery currently for sale through Boticca is a £3,277 pair of brown diamond earrings – as well as handbags, while shoppers in Australia opt for more colourful pieces.
“60% of our customers in the UK are buying from outside of the UK,” Foroughi says.” The British customer is very well educated [when it comes to jewellery], and given that they are bombarded left, right and centre by the same few jewellery companies’ marketing and advertising, the fact that they want something different and from another country really stands out.”
BOOSTING BRAND BOTICCA
With its recent growth and investment, Boticca has also undergone a re-brand. In 2013 it took time to establish a new company logo and colour palette. With this came a closer look at the company’s business values, both internally and externally. “We want to empower our brands and designers and provide them with a platform that gives them the recognition and sales they deserve, so they can build a sustainable business for themselves,” Foroughi says.
Part of this empowerment is the advice that Boticca offers the designers and brands it works with, many of whom are taking their first steps in business. “If we choose to work with a brand it is a stamp of approval; they are a brand with a story, potential and commercial viability,” Foroughi explains. “But even when they tick the boxes there are still things we can help with, the most important being the presentation of their band, which is something many still overlook.”
Foroughi says excellent photography plays a large role in how a brand is perceived, not only by Boticca but the wider consumer, this impacting sales. “At first we didn’t say that designers had to show how the jewellery looked when worn, but we found that those who did show lifestyle shots were twice as likely to sell a piece than those who didn’t, so two years ago we enforced it that every piece listed on Boticca has a lifestyle shot to give a sense of proportion and size.”
With investment under its belt and a London-based head office with 20 members of staff of 14 different nationalities speaking 15 different languages, Boticca is truly poised for global domination. France is ticked off its to-do list, and the company plans to launch further dedicated sites in Europe, with an eye on projects that can be scaled up. “Our goal is to become the destination for jewellery, bags and fashion accessories on the web, to be synonymous with those items online,” says Foroughi. “Boticca is the global luxury bazaar for jewellery and accessories.”
On the hunt: How Boticca sources its designers
According to Boticca co-founder Kiyan Foroughi, the number of inbound applications from designers wishing to be sold through Boticca has doubled in the past 12 months, totalling between 30 to 40 applications each week, of which just three or four might be successful. However, the brand’s main method of capturing new designers is through the process of style hunting. It has two in-house style hunters who scour the web, fashion magazines and blogs to discover those international designers of tomorrow. They also travel to trade shows and Fashion Weeks in Paris, New York and London in a bid to spot new talent, as well as specialist jewellery and leather design schools. This method accounts for about 90% of Boticca’s origination program. “We don’t look at other sites to find designers,” Foroughi states. “Some brands might be more established or better known in their local market, but not internationally, so as long as they are still a brand our customers can feel like they have discovered, that’s fine. If everyone else is stocking a designer, you won’t find them on Boticca.”
This interview was taken from the January Guest Editor issue of Professional Jeweller, led by Annoushka Ducas. To read the issue in full online, click here.