The World’s 50 Most Innovative Companies- 17: Greenbox

HEADQUARTERS
Shanghai
WEBSITE
www.lvhezi.com

FOR INVENTING THE NEXT-GENERATION CHINESE FASHION BRAND

Here are five words every children’s clothing chief hopes to hear in her lifetime: Disney wants to work together. Fangfang Wu heard them last year, when the House of Mouse asked the CEO of Greenbox, a children’s clothier based in Shanghai, to manufacture a line of Disney-branded apparel. With Shanghai Disney Resort set to open in 2016, Disney wants to stoke the Chinese appetite for all things Mickey, Winnie the Pooh, and Disney Princesses. The company’s licensing division is a $28 billion global business that could immediately boost the fortunes of an upstart brand like Greenbox.

Wu, of course, said no.

“The players in children’s clothing in China are original equipment manufacturers,” says Wu, who is soft-spoken but totally self-assured. Greenbox is the exception to that norm, a strong brand with a deep commitment to distinctive design and worker safety. And Wu was not going to have her brand name subsumed by Disney’s. In a telling surprise that reflects the growing power of cutting-edge brands catering to China’s emerging middle class, Wu persuaded Disney, after six months of negotiation, to collaborate. (Disney did not respond to our repeated requests for comment.) The labels on the line that the two brands launched last August read Disney by Greenbox. “Among China’s rising middle class, brand consciousness is becoming more and more important,” Wu says.

Launched in 2003, Greenbox is now the No. 1 children’s apparel retailer on Chinese e-commerce giant Taobao. Wu, a former marketing exec, started the company a few years after she and her husband welcomed their daughter, Alice, into the world. “I wanted clothing that reflected a personality,” Wu says. “I wanted Alice to live and behave like a princess.” Dismayed by the shoddy, boring clothing she found for sale, Wu, a self-taught designer, created her own. Indeed, part of the reason for the company’s success may be that Wu is her own best customer.
Wu designed her first brand, Miss de Mode, with Princess Alice in mind. The line is ultra-girly-think ruffled dresses in floral prints with plenty of eyelet lace-intended to groom “elegant” girls. (So far, it seems to be working at home: Wu reports that Alice, now 13, enjoys music, art, and cooking.) Early success on EachNet, China’s eBay, inspired Wu to open some physical outlets in 2006. But the global financial crisis forced her to shutter the storefronts, and creditors pressured her to sell the business. Instead, Wu relocated to Taobao, which allows companies to open branded online stores. “She realized that a lot of moms-young, white-collar workers who spend their days on the Internet-have the desire to dress up their kids,” says Hurst Lin, a partner at DCM, which invested roughly $10 million in Greenbox last year. That sentiment is increasingly common among the Chinese middle class, especially those affected by the one-child policy, which leaves six adults-two parents and two sets of grandparents-to dote on a single child.
Made in a moment of duress, the shift to Taobao has been Greenbox’s most valuable move. “Offline retailing is not an efficient system in China,” says Lin.
“Once you send items to the store, you almost lose control of the inventory.” Moving online gave Wu-often described by employees as a perfectionist-greater control, but it also allowed her to drop prices by 30% at the very moment that e-commerce was beginning to blow up in China. The number of Internet users there has jumped 63% since 2008, and 36% of the population is now online. “Greenbox just really hit that growth trajectory,” says Torsten Stocker, an analyst with Monitor Group. In 2010, Greenbox netted $8 million in revenue; in 2011, that number more than quadrupled.

Greenbox is also a pioneer in product safety. “Currently, there aren’t strong safety standards for children’s clothing in China,” Wu says, noting that in recent years, apparel containing dangerous levels of formaldehyde and heavy metals have hit store shelves. Needles have even been left inside clothing. “We’re working with industry associations and the government to create standards.” Wu monitors Greenbox’s quality with regular visits to production facilities and also champions the use of environmentally friendly materials and processes. “The fact that Greenbox delivers a brand that’s more than just a name and logo, with good design and the use of nonharmful materials,” Stocker says, “makes it stand out from many other apparel businesses in China.”

Wu, who gave birth to son Jerry in 2004, is now building two families. She employs 30 designers (though she still insists on designing at least 20% of the items herself) and has added three additional brands. Jenny Bear revisits the princess aesthetic for younger girls; M.I.L. Boy offers tough-guy street style, complete with big sunglasses and rock-and-roll prints; and the newly launched Hi Girl, boasting metallic puffer coats and faux-fur jackets, is for the young urbanite. Some American shoppers find Wu’s clothing too precious or too adult, and it certainly is a far cry from the mini-me look of Gap Kids. That’s the whole point, she says: “Design from overseas doesn’t fit the Chinese market, and the Greenbox look is not easily replicated.” Which is, of course, why Disney came calling in the first place.

By Stephanie Schomer
Photograph by Flickr user Thomas

From: http://www.fastcompany.com/most-innovative-companies/2012/greenbox