Interview with Jacqueline Lam, Founder of Mihaibao
Listed as one of the 50 most innovative companies in England, Mihaibao is the B2C marketplace Chinese consumers and Western luxury markets have been waiting for. Dr. Catherine Raines, the CEO of UK Trade & Investment (UKTI), is “delighted that Mihaibao.com, a graduate of UKTI’s Sirius Programme, is providing a platform for UK businesses to capitalise upon the fantastic e-commerce opportunities in China. In 2015, 25% of worldwide retail e-commerce took place in China, representing a year growth of 10.1%. We want to inspire 100,000 additional exporters as part of our ‘Exporting is GREAT’ campaign, and look to continue working with companies that are driving e-exporting growth.”
Founder Jacqueline Lam established the Mihaibao platform in order to bridge the access gap between the burgeoning consumer growth in China and luxury products from the West. She brought an impressive array of investors on board, ranging from the English government to veteran VC names like John Wu, angel investor and original CTO at Alibaba and Dave McClure, Founding Partner at 500 Startups.
Tharawat Magazine spoke with Lam about what it is like to run one of the hottest up-and-coming start-ups in China, how she feels about competition and the rise of Chinese female entrepreneurs.
What solutions does Mihaibao provide?
Chinese demand for Western products has been increasing exponentially for years. Consumers have been purchasing products in rather complicated ways, like asking friends and family to bring back goods from their travels. There are also professional shoppers that make trips to get products. Many Chinese now also turn to e-commerce platforms, incurring great disadvantages by paying double or incorrect duties. Even with so many barriers, demand continues to grow. Mihaibao wants to solve the access issue and deliver consumers with the products they want to buy. We have created a well-formatted B2C marketplace to address this issue.
Western product markets are also keen on servicing China since neighbouring countries with such products don’t have enough supply to meet demand. Mihaibao is also closing this gap. We understand and know how to match the diversity of the Chinese market and the huge range of Western products beyond well-known brands.
Mihaibao co-founders team with Jacqueline Lam, Dainius Dulinskas and Jonas Simkus at Paypal in London
What kinds of products do you currently provide?
At the moment we are focusing on fashion but will soon expand into other industries. The number of luxury fashion buyers is higher than in the West, especially amongst the middle class. We estimate to reach about 300 million shortly. This means tastes are also evolving. Many people used to buy items with big logos to make sure they were recognisable. Consumers are now looking to buy more unique goods from emerging designers. We make sure to show off unique brands that are hard to access and much appreciated by this burgeoning market.
There is also a huge demand for authentic Western goods. The counterfeit market is still very strong and consumers are distrustful. Mihaibao is trying to establish trust between the East and the West by making sure that both sides of the transaction are genuine and authentic. This strategy is what gave the UK government and royal family the confidence to back us.
You were sponsored by big names during your seed investment round, winning you $1.6 million. Has your attitude towards business changed as a result?
I feel the same, even after getting big investors on board. My attitude to business and life drives me to fix stuff obsessively. It is more fun to get your hands dirty, solving problems than complaining about them. Perhaps it is one of the reasons why we got the strong backing. I believe business is about building team and culture, with shared purpose, to solve problems and deliver value in new or better ways. One thing our chairman, Alastair Mitchell, Founder at Huddle, taught me is to “hire slowly, fire fast”. I’ve made sure to hire the right people in China and the UK. It is important that our business model has a strong localisation strategy and that we work with people who really understand both sides of the market. We are very adamant on fostering a strong team culture that is both competitive and emphasises friendship. I have always treated everyone the same, be the investors, co-workers, clients or suppliers. I treat everyone as friends. I am not formal – it hinders my creativity. I believe you can only be yourself. Why waste time trying to be someone else?
How do you feel about competition?
It is important to understand the competitive landscape and know exactly how we differ. Mihaibao found a unique angle into the cross-border market, scaling trust with the right partners. Moreover, you decide whether you see competition or potential partner. If you believe the world is about wealth moved within the same pie, then you tend to see competition. It is different when you see the world as a growing pie. Therefore, I believe we would work with many companies, defined by most as our competition. China is known to have a culture of copying business models. Therefore, it is critical to have core capabilities hard to replicate by others. China is also innovating now, evolving. More and more entrepreneurs are truly bringing USPs to the market. As long as you create strong core capabilities, it doesn’t matter how many people imitate your business model. Be aware and stay focused on your mission.
Jacqueline J Lam at 10 Downing Street, UK
We are facing turbulent economic times. Do you believe your business will be affected?
The decline is very specific and will not affect us in any immediate way. There are different ways you can look at it. Market size in our area is still growing despite economic downturn. The question is: Where is the wallet share? The upper and middle class, interested in our products, are still on the rise. In fact, I would say demand for trusted and quality products would boom when the economy is slowing down. It would force some domestic companies to compromise on quality, escalating China’s trust issues further. We also have huge potential to bring offline shoppers online. About 90% of China’s retail sales are still offline, so the growth rate is going to be significant. By 2018, cross-border purchasing will be worth $160 billion, quadrupling since 2014.
The service economy within the luxury sector is also expected to grow between 16% and 20%. Money is being spent differently. People might not invest in real estate, but that doesn’t mean they dress or eat differently. Your investments may vary during a downturn but your consumption habits won’t drastically change as long as your salary stays the same.
Are female Chinese entrepreneurs still a rare occurrence?
I would love to see more female entrepreneurs in China. Often, I am the only woman speaking at tech conferences. Having more female role models could make it feel less scary or difficult for other women to become an entrepreneur. Women need to be more visible to encourage other women. Over 60% of our team is made of women. It wasn’t intentional, it just happened.
I don’t think we should generally feel or act differently as women. If you expect to be discriminated against, then you very likely will be – a self-fulfilling prophecy. Just go in and make the deal. It’s a matter of mindset. Of course, you also make sure to be the best at whatever you do.
Tharawat Magazine, Issue 29, 2016