How Aussie luggage startup July found unexpected success in the US market during COVID-19

Melbourne luggage startup July has launched in the US, with early sales wildly exceeding targets among a more vaccinated — and more mobile — consumer base.

July was founded in 2018 by Richard Li and Athan Didaskalou, who set out to ‘reinvent the wheel’, redesigning lightweight suitcases from the ground up.

But, when the COVID-19 pandemic hit, bringing both international and domestic travel restrictions with it, they saw revenues start to dip.

“We were in a very serious situation,” Didaskalou tells SmartCompany.

In Australia, 2021 has not brought much in the way of improvements. So the co-founders set their sights on a market where people are on the move again.

According to Our World in Data, just shy of 59% of the US population has had at least one jab, compared to 28% in Australia.

Domestic flights are back up and running stateside, and as consumers re-embrace travel, they’re also looking for innovative accessories.

“The response has just been fantastic,” Didaskalou says.

“It’s just chalk and cheese, after being in lockdown for so long, to go to a market that’s flying regularly.”

July has also attracted national press coverage in the US, securing feature in CNN, Fortune, GQ and Vogue.

Since launch day on July 1, the startup has sold more than 1,000 cases in the US, more than ten times their expectations, Li says.

“We had a very modest forecast,” he explains.

“The market has just really opened up our eyes … we couldn’t keep up.”

And demand is still trending up. In July, 70% of the startup’s revenue came from Australia, and about 30% came from the US.

This month already, more than 50% of revenue has come from the US.

Trial and error

It’s a huge market, and July’s products have clearly resonated.

Competition in this sector is fairly stagnant, globally, Didaskalou explains. The pandemic has also meant that not many new players have entered, while some have dropped out.

“Share of market is pretty much all Samsonite and its subsidiary brands.”

People are hungry for “freshness” and something new and innovative. The pair also like to think US customers are attracted to the ‘Aussie’ vibe.

July also offers personalisation, with various fonts and colours available, and 14 different languages — plus emojis, of course.

About 70% of the cases the team is shipping to the US are personalised, Didaskalou explains. And all of that personalisation and shipping work is done from Melbourne.

There’s a balance to be struck here between bringing overseas customers into the Aussie experience, and keeping the small business touch, while also tweaking marketing and customer service to cater to a slightly different audience.

There’s an element of trial and error, Li explains.

“If something works in Australia it doesn’t mean it’s going to work in the US.

“We have to tailor those ads and that messaging and also trying to localise as much as possible.”

For example, the US website uses US spelling, not Australian. It’s a small thing, but it helps create the best experience possible for those customers.

If an Aussie saw the word ‘personalization’ with a ‘Z’ on a local retailer’s website, “you would instantly feel icky about it,” Didaskalou adds.

Australia on pause

All of this is positive news for the business, but it’s bittersweet.

This is an Aussie-grown business, and the founders want to be able to continue their growth in their home market.

My conversation with Li and Didaskalou literally began with jokes lamenting lockdowns and the holidays we’ve all had to cancel.

We’re chatting about it lightheartedly, but it is difficult to see this market completely out of action.

“There’s an emotional, human side to it, where the confidence of travel just isn’t there anymore,” Didaskalou says.

It’s not that the Aussie market is no longer a focus, he adds. Rather, it’s on pause. And the US opportunity is too big to pass up.

“The business in the US is just phenomenal,” he says.

“They literally have 15x the population, and the demand for travel is big … It’s always been in the plan for world domination. I think COVID just sped up the US process.”

More cash on the cards for July?

Launching in a whole new market when you can’t have boots on the ground would have been unthinkable just a few years ago. There’s not necessarily a playbook here.

But Didaskalou says success comes down to “really good partners” and willingness to take a call at any hour of the day or night.

“We’re working around the clock,” he says.

Equally, Li notes that the COVID-19 pandemic means that people are much more understanding that face-to-face meetings are off the cards. Deals can be made over Zoom meetings now.

And that goes for both commercial partners and VCs.

The success of the launch in the US has also fast tracked talks of another round of funding. This time, the founders are focusing on US investors.

“We already have a couple of calls lined up,” Li says.

“Our goal is, while we’re waiting for Australia to bounce back, we’re going to keep selling in the US, keep shipping to the US and raising capital from US VCs.”

COVID-19 has “basically normalised” capital raising over virtual calls, he adds. No one is flying to New York for a chat and a coffee anymore.

“It kind of worked in our favour in a sense.”