Johannes Kliesch is co-founder and CEO of Snocks, a basic fashion startup from Mannheim, Germany that has grown considerably since its founding in 2016 thanks primarily to its clever D2C business model. Recently, Snocks secured a 10-figure investment from Cathay Capital that has Kliesch and Snocks poised to continue its impressive growth and expand into new markets. I caught up with Johannes for this episode of the OMR Podcast International to discuss the impact D2C has had on the company, its primary marketing and customer acquisition channels, which markets Snocks is targeting and what strategies they hope will help their expansion efforts succeed.
50m in revenue? “We are on track”
Kliesch co-founded Snocks together with his cousin Felix Bauer in 2016, the result of a desire to be self-employed. “We tested several business models, set up Whatsapp groups and eventually landed on Amazon FBA (author’s note: fulfillment by Amazon),” Kliesch recalls. The cousins found this model especially intriguing, as they would not require any physical inventory. Then the focus turned to the what. “Before Snocks I had made decent money reselling sneakers and saw that people were willing to spend hundreds of euros on shoes, but still buying socks on Amazon. So we wanted to create a D2C startup for socks.”
When Snocks launched in 2016 the first batch “was shit,” Kliesch says bluntly. “Our vision from the beginning was to sell sneaker socks that did not slip off the heel—and all they did was slip.” With only 4k in capital, Kliesch’s hands were tied. “We had to perform, so we sold them on Amazon—and did surprisingly really well.” In that first month, Kliesch and Bauer turned the 4k into 17k—and have not looked back since. “Our goal this year is to hit 50m in revenue—and we are on track.”
“The biggest D2C brand in Europe”
With eight figures in revenue from socks and underwear in under six years, the company has been very successful and profitable from the start. “For the first five years, we were fully self-funded and have remained profitable, so we never needed to go looking for outside investors,” says Kliesch. To continue growth and scale up the company further, Kliesch and Bauer realized that they needed to look beyond Germany, where 95% of total revenue comes from, to reach their goal of “becoming the biggest D2C brand in Europe for basic fashion.”
After speaking with other D2C brands and eCommerce professionals, the founders realized it was time to seek outside capital. “Internationalization is really tough. You need to invest a lot of money—it’s not a matter of copying and pasting strategies that worked elsewhere.” With the help of Cathay Capital’s 10-figure investment, Kliesch and Snocks will set up a team in Paris, engage in extensive brand awareness campaigns and establish the brand in France. Kliesch was quick to point out, however, that while the investment is significant, Kliesch and Bauer have maintained a majority stake. “We have only relinquished a small stake in the company due to upcoming internationalization efforts.”
“Not at zero”
France is the first of several possible markets tapped for expansion. With marketplaces up and running for France, Italy and Spain, the decision landed on France, as Snocks would not have to start from scratch. “After Germany, France is our second-largest market and people are a bit aware of Snocks. “It’s the second-largest market after Germany and we made about 1 million there last year. So the starting point for us is not at zero,” Kliesch says. As it was with the initial idea, Kliesch is banking on a short timeline to determine whether or not the plans for establishing Snocks in France will succeed. “Our goal for year one in France is EUR 5m. So after a few months, we should be able to see if we are on track or if we need to move on to Spain or Italy.”
Check out the entire episode of the OMR Podcast with Snocks co-founder and CEO Johannes Kliesch here.