“Fashion Netflix”: the sustainable business model of a startup born on the east side of Sao Paulo

With the money from the sale of an economy car, Carlos Alberto Silva created WeUse, a startup currently valued at BRL 5 million

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With a little over BRL 20,000, raised after selling his car, the 33-year-old economist Carlos Alberto Silva put into practice a business idea that used to be a good old habit cultivated between him, his brother, Humberto, and a friend, Guilherme Brito: to lend clothes to each other. Since the habit brought variety to their wardrobe and helped them save money, why not offer it as a service to others? That is how WeUse was born, a startup created in 2017 in the Itaquera neighborhood, east side region of Sao Paulo, which, according to the startup itself, currently has a market value estimated at BRL 5 million.

The service, run by the mentioned trio and Andria Micale dos Santos, works as a kind of “Fashion Netflix”: customers subscribe to a plan (12 or 16 items per month, which costs between BRL 69.90 and BRL 89.90) and, through the app or website, choose three items per week among more than 3,000 options available.

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WeUse delivers clothes to the customers’ homes or workplaces in an eco bag, exchanging the items weekly for them. Subscribers, in their turn, don’t have to worry about transportation or cleaning. “It’s the same price the person would pay for new clothes at a department store. But the client has access to a much greater variety of items,” emphasizes Silva. “Many customers tell us that today, by subscribing to the service, they spend much less on purchases than before,” adds WeUse’s CEO.

WeUse partners and part of their team: the plan is to expand service to other Brazilian capitals. Photo:WeUse/Courtesy.

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Before putting the idea into operation, the entrepreneurs researched the market to understand if there was anything out there similar to what they were planning. After that, the partners participated in startup acceleration courses and started free trials to validate the product.

The company’s headquarters used to be Carlos’ house. He took care of all the processes, from customer service to clothing delivery. In 2018, paid subscriptions started. Nowadays, about 130 people subscribe to WeUse services in São Paulo (most customers are male.). One of the company’s plans is to expand the service to other Brazilian capitals, starting with the southern region.

In addition to the initial investment and part of Silva’s salary as a consultant – a job that Silva had during the first year of WeUse’s operation –, the startup participated in several competitions to raise investments.

An investment of BRL 500,000 came from angel investors from organizations such as Anjos do Brasil, Curitiba Angels, and Kaleydos. More recently, a new investment of BRL 120,000 was raised in the reality show starring the Brazilian investor João Kepler, called O Anjo Investidor (The Angel Investor) and broadcast by Rede TV and Joven Pan in Brazil.

This last infusion helped to mitigate the startup’s losses caused by the COVID-19 pandemic – at the beginning of the wave of cases in Brazil, in March, WeUse lost almost half of its customers and was only able to resume its pre-crisis level this month.

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How WeUse’s idea was put in practice

The fashion industry is considered one of the most polluting in the world and accounts for about 10% of greenhouse gas emissions, more than aviation. Water consumption in clothes production is also high: a single pair of jeans can use up to 5,000 liters. No wonder the fast-fashion model, with constant new release and unrestrained consumption, has also been put in check. In 2013, the collapse of the Rana Plaza building in Bangladesh, which left 1,135 people dead, exposed an obscure side of the department stores: the majority of workers, in terrible conditions, produced for globally known brands, which generated questions and demands from entities and consumers themselves.

These are some of the aspects considered by WeUse in its mission. Aside from the tendency to share cars (Uber) and homes (Airbnb), Silva wanted to serve the customer that likes to have variety when it comes to clothing but is aware of the environmental and social impact of this industry and does not want to continue with the logic of buying a new item of clothing at all times. “We saw the opportunity to break the paradigm of this consumption model by offering a sustainable service.”

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The startup’s plans for doubling its number of subscribers on quarterly basis

In the short term, WeUse’s goal is to double the number of subscribers in Sao Paulo every three months, in addition to starting the national expansion for the second half of 2021. It also studies the creation of a premium subscription, which includes luxury brands. The startup is also talking to national brands interested in creating wardrobes within the company’s platform, in a concept called e-closet, in which the customer will be able to select extra items from different brands.

The intention is to also offer plans for children’s clothing, since they grow out of clothes very easily, and expand the size grid (which today goes to XL). “This will give us a chance to reach a very strategic audience that already finds it difficult to buy clothes”, points out Silva. Expanding borders and reaching other countries besides Brazil is another WeUse plan. “We want to become a unicorn. It is something very clear to us,” stresses the CEO.