Written by Tomas Zbynovsky and Celso Roberto Pereira Filho.
Vida transforms the traditional fashion industry by bringing closer designers to customers via online marketplace. It also reduces environmental impact through business model innovation utilizing demand-driven manufacturing, digital print technology and modular designs. Additionally, it fights against bad fashion manufacturing PR in developing countries by providing good working environment and education to its employees.
Traditional fashion value chain
Although the business model in today’s fast fashion has been continuously innovated by big players like ZARA, majority of mass fashion houses still use traditional design-forecast-sourcing-production-fulfillment-store model that is only optimized locally within each of its steps.
Due to the strong focus on speed, this value chain has been stretched to its limits, often causing major issues like sourcing pressures, quality issues, significant waste rates and bad PR caused by poor working conditions of its employees in developing countries. This sometimes includes child labor or low safety standards resulting in disasters like Savar building collapse in Bangladesh, causing death of 1,129 people and 2500 injuries.
The traditional players are also often blamed for pushing further the unsustainable trend of fast fashion, irresponsible sourcing of materials, environmentally insensitive choice of manufacturing process and bad treatment towards their designers that usually remain anonymous, don’t get any validation or rights for their designs and are often underpaid.
Vida’s business model
Vida significantly redesigned the fashion industry value-chain, not only improving their flexibility, speed and bottom line but also enabled empowerment of their designers and sustainable production process, using responsible sourcing, clean production and lifting its workers from the poverty line.
Online marketplace & empowerment of designers
Vida designs are not produced in-house but by a broad community of designers. Designers are generally segmented into one of two categories: promoted famous designers who are themselves influencers and VIDA voices for anyone else who can try to compete with their design for a demand on the platform. They are provided clear steps on how to create their own website on VIDA portal and standard templates to use for their designs. Designers themselves can then market their designs and once they reach sufficient traction and demand, the products are put to production or even featured on the main website. Once the designs are sold, the artisans get their royalties and can still use their designs for other purposes not directly competing with VIDA products. The unsuccessful designs are deleted automatically after a pre-set time period, resulting in self-cleaning process for the marketplace.
Demand driven
VIDA’s production process starts only once the order is submitted. The product offering is modular and different designs are printed on the fabric by a high-speed digital printer. After that, the simple cutting and sewing process is done manually by employees in Karachi, Pakistan and the air compressed batch is sent to Maryland, US. The garments are then folded, secured with a black VIDA ribbon and packaged into sleek black boxes, resulting in luxury feel for their targeted upmarket and gift customer segment. Packages are then shipped around the world to their new owners, who will usually receive it in less than three weeks after pressing the order button.
Digital print
Although the digital print technology is not new, it has been adopted by a fashion manufacturers only recently and is predicted to grow 25% annually until 2019. VIDA started to use this technique right after its inception in 2014 due to its speed and low operational costs. The print of a garment requires no forms and can be done in under 45 seconds. This allows light and fast value chain, decreasing both costs and environmental footprint.
Modularity and customization
VIDA brand started with simple square and rectangular scarves made of micro modal, cashmere or silk. This allowed for simple and fast cut and sew process after the print while keeping the quality standards high. Other categories were selected later, always focusing on simplicity, modularity and “one size fits many” designs – tops, bags, jewelry, or pocket squares.
Digital print in combination with design directly from community of designers creates customized design and is further with demand-driven production a “piece created just for you.” Each garment is therefore uniquely produced for specific customer.
Social and environmental impact
VIDA doesn’t only want to be an efficient fashion brand, but also a environmentally and socially conscious one. Their digital print technology reduces usage of harmful chemicals, enables them retain a clean and safe working environment for their employees and together with design modularization and rationalization reduces waste. The fabrics are sourced from suppliers with high environmental standards and working standards for their employees.
The company also takes good care of its employees – not only by providing a safe and clean working environment but also daily programs for them and their families. They actively support education and make sure that each worker and his or her family receive basic education and eradicate illiteracy.
VIDA is a prime example of a modern fashion house that not only produces its products in efficient manner, but also behaves responsibly towards environment and all company’s stakeholders – from investors and customers to designers and suppliers.
Umaimah Mendhro, the founder and CEO at VIDA, graduated as Baker Scholar from Harvard Business School and prior VIDA worked in West, McKinsey and Microsoft.
Sources:
https://www.shopvida.com
https://en.wikipedia.org/wiki/2013_Savar_building_collapse
https://www.forbes.com/sites/rachelarthur/2017/02/17/digital-printing-technology-custom-clothing-fashion/#505b3a056aef
http://www.esquire.com/style/news/a50655/fast-fashion-environment/
This is quite an interesting example of a company in the fashion industry which is not directly related to construction of goods. It would be interesting to see how this model responds with an increase in demand. In other words if their intention is to grow- how scalable is it?
How does this case compare with the case of SOKO?
It is a very interesting business, but similar to the SOKO case, it does not seem like the social impact is the company’s core value or its driving force. As the company scale and more demand for profitability, do you think eventually the company will scale back on the social impact effort?
@miromiros: Why would it matter whether social impact is their core diving force or not? If they do good out of a business rationale, this only makes the change more sustainable since there’s a business model behind. Social impact certainly seems to be a part of VIDA’s value proposition, which makes me quite confident that they won’t scale back on it once they grow.
Always exciting to see new businesses aim for sustainability and try to compete with the big players, especially in the retail space. How does VIDA give transparency to the customers on their sustainable initiatives? It is a problem that SOKO faced, and I’m curious to here how VIDA is communicating its work to their customers.
Very interesting business model! I like how VIDA’s model provide a better waste management in the textile industry. However, wouldn’t it be nice if VIDA actually focuses on promoting artisans from emerging countries instead of from the western world? This way they can foster innovation and creative thinking for those living in the bottom half of the pyramid.