Mondetta Pivots from Wholesale Clothing Manufacturer to Direct-to-Consumer Business Utilizing Afterpay

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Iconic Canadian apparel manufacturer Mondetta has partnered with Afterpay, a buy now pay later service, in an effort to pivot from being a 35-year-old leading wholesale clothing manufacturer to a direct to consumer business.

“We chose to partner with Afterpay because of their commitment to helping consumers spend in a way that’s convenient, safe and easy. The fact that Afterpay does not engage in external credit checks or allow customers to fall into debt is perfectly in line with our values as a BCorp Certified business. By offering Afterpay, we’ve been able to reach high-value customers, which has resulted in substantial benefits, including a 20x increase in our standard website referral rate and a 44 per cent uptick in average order values,” said Ash Modha, Founder and CEO of Mondetta.

Mondetta, which is based in Winnipeg, began in 1986. It started selling T-shirts on Grand Beach at Lake Winnipeg under the Mondetta brand, which means small world. It went from a small company selling T-shirts on the beach to a company selling across Canada, the US, Europe, Asia and other international places.

“We’ve kind of done five iterations of the company over the last 35 years. When we first started we were selling retail partners in small independents, large retailers . . . When that whole product category of big logos started waning in 1996, 97 we recalibrated the company and that’s when Costco Canada approached us and said ‘we love Mondetta, we want to carry your product’. We said ‘wait a second, do we think this is the right way of taking the next level for the brand. They walked us through the model of where retail was going. It was really interesting to see that if we weren’t part of this new retail as we moved forward 10, 15 years from now it would be very hard to get into a retailer like Costco,” said Modha.

Mondetta
Image: Mondetta

“They basically wrote a $5 million order on a napkin. It was that crazy . . . We actually got involved with them and it was an incredible opportunity for us. Today, 26, 27 years later it’s one of our biggest retail partners that we continue to work with.”

It then started making private labels for companies such as the Running Room, Athleta, Lucy and many major retailers.

Currently, the company has three different divisions – private labels, large scale retail under its own brands, and its direct to consumer which it sells to retail partners and online.

“In the last 35 years, the big opportunity for this company is we have a significant back end supply chain. We have 13 countries of origin with 55 factories from Vietnam, China, Indonesia, Cambodia and it goes all the way into the Middle East with Jordan, with Egypt, with Turkey,” said Modha.

“So we’ve really built a significal scale on the supply chain. We have capacity for almost 150 million units a year and fully compliant.”

Years ago, the brand had seven of its own retail stores. But decided over the years to exit that to focus on what it does now as a business model.

Modha said the recent partnership with Afterpay is a “fantastic marriage” and the right thing as a B Corp to be partner with the company.

“They’re very similar to Shopify. They just make everything so simple. I think we were up within six hours, eight hours with this whole linking system and actually getting on-boarded,” he said.

“For us, it’s been really fantastic. We’ve seen that with Afterpay a customer spends 40 per cent more than the average customer on an online order. So we can actually see the ability to scale the average cart size. Secondly, we’re seeing a conversion rate of 20x times the standard conversion rate which is huge. Consumers are looking at it as a great opportunity to buy and they get that flexibility of almost a credit card but it’s not, without having to put all the information  . . . I think Millennials are afraid of credit cards because of the significant impact of interest that is charged on a credit card. This allows them to budget.”

Afterpay also recently launched cross border shopping in the U.S., allowing merchants like Mondetta to reach millions of U.S. shoppers.

“As we start integrating cross border and then we start integrating internationally that gives us a significant run on that. That’s the one thing Afterpay, being an Australian company, they understand very similar to Canadian companies. They understand global versus if they were a US based company,” said Modha. “US based companies think more about the US market only and kind of forget all the other markets.

“These guys are savvy. They’ve thought about not only the US business but how do we expand globally and that ability to expand globally has been I think what is fascinating for us as a company.”

Afterpay has a network of 100,000 global retailers, which allow customers to receive items immediately and pay over time, with no fees. Merchants benefit from Afterpay’s customer base of nearly 20 million in North America.

Afterpay is currently available in Australia, Canada, New Zealand, the United States and the United Kingdom, France, Italy and Spain, where it is known as Clearpay.

Article Author

Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior News Editor with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training.

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