Sopa takes high-stakes gamble by reviving Leflair

July 12, 2021 | 08:51
US-based Society Pass (Sopa) has taken a risky move by acquiring Leflair but it is confident it can revive the brand in Vietnam.
Sopa takes high-stakes gamble by reviving Leflair
Sopa is inheriting an established e-commerce brand with Leflair

Founded in 2015, Leflair provided luxury fashion brands and beauty products at steep discounts. Since its launch, Leflair has raised millions of US dollars from angel investors and venture capital funds from the US, France, Italy, Singapore, Hong Kong (China), South Korea, and Cambodia. However, in February 2020, Leflair suspended its local operations, blaming “changes in the investment landscape for startups” that caused operational inefficiencies.

Last year, Leflair filed for brankruptcy and received legal approval. However, the startup failed to pay suppliers several months after the company ceased operations, causing some disputes. In June 2021, SoPa announced that it had acquired Leflair LLC from a company in Hong Kong with a view to relaunching the brand in Vietnam in this third quarter.

Samuel Son-Tung Vu, partner at law firm Bae, Kim & Lee Vietnam told VIR, “To our knowledge, in the past the Leflair e-commerce site was run in Vietnam by Leflair JSC (Vietnam), which has gone bankrupt. However, as we check the Industrial Property Digital Library under National Office of Intellectual Property of Vietnam, a Hong Kong entity called GoodVentures SEA Ltd., not Leflair JSC, is registered as the true owner of the Leflair e-commerce site. Thus, Leflair JSC and its liabilities – true or disupted – should not affect the right to transfer the Leflair brand by its owner (unless there is an agreement between Leflair JSC and the owner precluding this) nor the rights of Sopa to acquire the brand.”

He stated that when entering the Vietnamese e-commerce market under the “Leflair” brand, Sopa shall not be responsible for any disputes/liabilities related to Leflair JSC unless there is a separate agreement assigning and assuming liabilities.

Sopa takes high-stakes gamble by reviving Leflair
Sopa shall not be responsible for any disputes/liabilities related to Leflair JSC

Indeed, Sopa decided to change its business strategy and development vision to revive the popular brand. COO Ray Liang said, “By developing the new e-commerce site, consumers will have opportunities to purchase premium goods from a trusted online address, which serves different lifestyles.”

“Sopa would like to join forces with prestigious suppliers of premium consumer goods from Vietnam and the world. Together, we will jointly find effective marketing and business solutions to match consumers’ lifestyles and consumption demand,” he added.

To accomplish this, a team of senior managers from Sopa will take part in the operation of Leflair to ensure sustainable growth. Making the most of its technology and platform management capabilities, Sopa aims to improve user experience and service quality for the new Leflair.

Ralf Matthaes, managing director of Infocus Mekong Research said that Leflair is a familiar brand among Vietnamese consumers. While Vietnam’s lucrative premium market is wooing more international brands, the acquisition of Leftflair will help Sopa penetrate deeper into the premium segment.

Sopa takes high-stakes gamble by reviving Leflair
The acquisition of Leftflair will help Sopa to make deeper penetration into the premium segment

According to a survey conducted by Nielsen, Vietnam ranks third in the world in terms of fondness for branded goods, only surpassed by China and India. Moreover, the number of ultra-high-net-worth individuals living in Vietnam is forecast to grow strongly in the next five years. By 2025, Vietnam will have 50 ultra-high-net-worth individuals with a net worth of at least $30 million each and 25,812 high-net-worth individuals with assets of at least $1 million, says The Wealth Report 2021 by Knight Frank.

These trends will drive the development of the premium segment. However, most of the clients are buying premium products directly from international brands or via local sellers who offer full ordering and shipping services from overseas. Since the outbreak of the COVID-19 pandemic, it has become more difficult to buy premium goods from overseas. Due to border closures, customers cannot travel to foreign countries to shop for luxury goods. Meanwhile, it takes a long time for luxury goods to be shipped to Vietnam amidst global supply chain disruptions.

Matthaes noted that the new Leflair is expected to fulfil the unmet demand in the market in the coming time. With the revival of Leflair, Vietnamese consumers can now shop for their favourite premium goods online. Meanwhile, local suppliers can access valuable business opportunities to work with Sopa and distribute their products on a new e-commerce platform.

With the new hands on the wheel, Leflair is expected to heat up the e-commerce market in the high-end segment. As e-commerce continues to boom in Vietnam due to social distancing, Sopa has quickly decided to venture into the market to seize opportunities. After setting up a strong footprint in Vietnam, Sopa will expand Leflair into other Southeast Asian countries in 2022.

By Olivia Bui

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