1.Company Profile

• Founded by Australian entrepreneur Luka Grana in 2013, Grana is a Hong Kong–based online apparel retailer offering wardrobe essentials with luxury-quality fabrics at affordable prices. Apparel categories the company offers include Japanese denim, Peruvian pima cotton and Chinese silk. Grana focuses more on quality and fit and less on fashion. It currently ships directly via DHL Express at favorable rates to Hong Kong, Australia, the UK, the Netherlands, France, New Zealand, Singapore and the US, among other countries.

2.  Notable Developments

• Grana has expanded into three new Asian markets this year.
• In October 2014, the company closed a $1.1 million seed-financing round from Bluebell Group and a group of strategic investors to sell simple fashion with a luxury feel.
• Grana launched globally in November 2014.

3. Business Overview

• Grana sources top-notch fabrics directly from all over the globe, including silks from China, woven cotton from Peru and denim from Japan, and it designs all its wardrobe staples in-house. The company focuses on wardrobes essentials made with high-quality fabrics rather than on creating fashion trends. All clothing is sold exclusively through its online stores and pop-up stores. Once a customer places an order online, the product is shipped directly from Grana’s Hong Kong warehouse within two to three working days.

• Grana’s business model eliminates the costs associated with middlemen (agents, distributors) and physical stores, allowing the company to sell its products at competitive prices. With the traditional model, a luxury T-shirt costs around $6 to manufacture, and after all the markups from wholesalers and retailers, the T-shirt will retail for $24–$50 or more, a markup of up to eight times. However, Grana’s model enables it to sell the same shirt for $12, a markup of just two times, and to provide transparent pricing to customers.
• believes that the company’s products are comparable to J.Crew’s in terms of product quality and style, but are priced more affordably. For example, a Grana T-shirt (made in Peru) retails for $14; silk shirts and tanks in a wide selection of colors range from $30–$52; and jeans (which are manufactured in China) are $45.
• One of Grana’s potential direct competitors is US-based online-only apparel brand Everlane, which has a similar business model and brand positioning. Everlane, founded in 2010, is a US-based online-only apparel brand offering various products including designer shirts, luxury tees, and leather wallets.

4. Target Market

• Currently, Grana’s target market is extensive: quality- and price-conscious customers ages 20 to 50 in Hong Kong, Australia, New Zealand, UK, France, Singapore and the US.
• Grana is expanding into new markets. In 2015, the brand will launch online in China, Japan, South Korea and Dubai. It will also expand its range into new apparel categories: Mongolian cashmere sweaters, Irish linen shirts, French poplin shirts, English oxford shirts and US twill chinos.

5. Marketing

• In addition to Facebook marketing and referral campaigns, Grana sets up pop-up stores in Hong Kong and Singapore in order to attract potential customers. According to the company, most of Grana’s new orders come from customers shopping at its pop-up stores, and the repeat-order rate is high so far.

6. Selected Products and Prices