How Kristy Chong built $3 million underwear business Modibodi and marketed a “taboo” product
Wednesday, August 9, 2017/
Kristy Chong always wanted to run a business, but she never thought it would be one that sells underwear. However, after seeing and experiencing the issues many women face with incontinence and menstruation, Chong took things into her own hands and launched high-tech performance underwear brand Modibodi from just $20,0000 in savings.
Running a “very lean” three person team, Chong has since developed her underwear business into an Australian market leader with a projected $3 million in revenue. And despite not making the cut for last year’s season of Shark Tank, the business has continued to hit significant milestones, including locking in a US launch through Amazon.
Chong spoke to SmartCompany about the challenges of marketing a product dealing with taboo issues, and how to face new competitors when entering a foreign market.
I launched Modibodi in 2014 from nothing more than my own personal inspiration. I have two children which involved a lot of running about, and I was also suffering from some pelvic floor issues.
My underwear was failing me when I exercised, and at the same time I discovered one in two mums have incontinence issues. Disposable hygiene products are inconvenient and costly, so it got me thinking about what could be done.
We have seen so much advancement in all aspects of technology, I thought it was time to apply that tech to fashion. It took me about 18 months to develop the product, which involved a lot of investigation and time spent speaking to textile engineers and conducting scientific tests.
Eventually I developed a prototype and I put it out to friends and family, but it was a long process.
Prior to launching Modibodi I had worked in various PR and marketing roles for large multinational organisations, the latest of which being McDonald’s.
I had always wanted to start my own business, but I didn’t think it would be an underwear label. But this was the first idea that my husband and friends said might actually work.
Despite my experience in the area, marketing the product was difficult because the issues it solves are typically taboo issues, and hard to talk about in mainstream media.
But I found with the onset of social media and influencers, there are a lot more people out there now who are happy to talk about these things. Women bleed monthly, and that’s not something to be ashamed of.
I think it was the right time to have launched Modibodi. Five years earlier or later and it might not have taken off, as the ability to speak about the product and sell it directly via online channels has been essential.
Big Australian retailers tend to shy away from innovative products, and that’s why e-commerce channels make up for 85-90% of our sales.
There have certainly been a number of hurdles along the way, but one of my strengths is being a problem solver. When I see an issue, I can work out a way to deal with it.
Early on I struggled with getting projection right. We would have big sales and run out of stock, so I realised in those situations it’s about finding good manufacturers who understand what we’re trying to do.
I also found it hard to balance cashflow while being a startup and doing everything yourself. I didn’t get any investment to start the business with — it was self funded from about $20,000.
We began to run off our profits pretty early on and I took on a bit of angel investment later on to help push sales and marketing along.
I view the business as a startup but I don’t think there’s much difference between a startup and a small business. For us, we’re looking to scale quickly, and that places us as a startup.
A lot of small businesses just want to stay small but we want to grow into a large self-sustaining business, and we’re in the growth stage now.
I still only have two part-time employees, so it’s a very very lean team for the size of the business. Next year I’m hoping to switch them to full-time, and I’m doing a lot of work with my contractors to see what area that next hire should be in.
I recently launched into the US market through a partnership with Amazon over there. That was facilitated through the female entrepreneurship program Heads Over Heels, which was able to connect me with the head of womenswear at Amazon US.
It’s a massive milestone for the business and means we can get into the American market. Going through Amazon is a great way to expand into other markets because it means you don’t have to set up a website and be your own vendor.
Expanding overseas is challenging and a bit worrying, especially as we do have competitors in the States. There are no other companies in Australia that do what we do.
I try not to worry about those competitors. They’ve created the category awareness for us and educated consumers, and we have a better product and at a better price point.
The most important part of expanding overseas is finding a good warehouse and distributor. I found a consultant who has a lot of logistics experience and has done a lot of business in the US market, so I didn’t go in blind.
Don’t try to do it on your own — find someone who can mentor you and help you figure out how to breach these difficult markets.
Fashion tech has grown and it will continue to grow. People want more out of their clothing than just cotton, so developments will start to happen in everyday wear.
Our biggest challenge looking forward is to make sure we have the right structures in place as we grow. We will hit $3 million in revenue by the end of this year, and $10 million by the end of next year, so it’s about getting those operations and systems in place to support our growth.