From $3M a month to $50M+ a Year: How Cupshe Breaks the ‘Curse’ of Growth

From $3M a month to $50M+ a Year: How Cupshe Breaks the ‘Curse’ of Growth

Meteoric ecommerce rise is rare. But continuing to scale after 259% YoY growth … unheard of. That’s the situation Cupshe found themselves in two years ago.

Having already increased sales from $10k per day to $3 million a month, they faced a challenge few know: the “curse” of growth.

This is the story of how Cupshe …

  • Increased revenue another 59% YoY in 2017
  • Generates approximately 35% of sales from social
  • And lifted both their conversion rates and AOV 30% in 2018

Ever wondered if your pillow hates you?

It’s a thought Mike Zhao knew well the night he launched his first ecommerce store … and one that rarely leaves. Not despite his company’s success, but because of it.

“There are times,” Zhao says, “I can’t sleep no matter how hard I try.”

His story started humbly enough. In 2015, Zhao bought a domain, connected it with a Shopify account, uploaded four products by himself, and used what little money he had left to drive visitors through PPC to his new site: Cupshe.

Cupshe's ecommerce fashion site is now a global, multi-channel enterprise

In three years, Cupshe transformed from a four-product site, into a global and multi-channel enterprise

The setup took a week. Afraid, almost out of money, and sleepless, Zhao pushed go and waited. Then, magic …

“I still remember it today,” he recalls with a laugh. “It was amazing because it was the first order I had ever received in my life.”

A Chinese marketer with no technical expertise, Zhao had never started or operated a business before. However, within months, Zhao’s sense of fashion combined with his PPC ad prowess resulted in nearly unbelievable revenue growth:

  • $1,000 per day after one month
  • $3,000 per day after two months
  • $10,000 per day after three months
  • $150,000 per day after eighteen months

In fact, during Cupshe’s second year in operation, Zhao’s baby grew another 259% and posted record-breaking numbers like $3 million a month in sales. “It was nothing short of amazing,” Zhao says.

The question is: what was fueling Cupshe’s high-volume growth … and could it last?

It Takes Speed

You may not be able to taste it. But, according to Zhao, most women’s fashion on the racks at big-box retailers are stale and outdated.

Trends can change instantly. And Zhao says the big-box stores simply can’t respond fast enough to capitalize on what can be a fleeting yet highly profitable shift. “They sell everything and can’t afford to focus on just women’s fashion,” Zhao explains.

From the beginning, Zhao founded Cupshe on speed: an approach known as “fast fashion” that caters to the forefront of trends, adjusts quickly to both frenzies and flops, doesn’t skimp on value or quality, and does it all with near factory-direct prices.

“Speed is what differentiates us,” Zhao says. “Unlike the big-box stores we are focused on only one thing: identifying and rapidly bringing to market the most popular trends in women’s fashion.”

During their first two years, Cupshe uploaded ten new fashions a day. That number has multiplied and continues to grow month after month.

If an item isn’t immediately popular, it is taken down and replaced in a matter of days: “Our edge is our quickness. If an item is popular we’ll keep it online and let it sell. If it’s not, we’ll kill it quickly and try again.”

How?

“We listen to the marketplace,” says the President of Cupshe’s US office, Aaron Watkins. “We form hypotheses based on what is currently selling — style or pattern-wise — and try to find holes in our assortment. We constantly monitor drop off points on our site and attempt to edit the product or content to provide newer styles or better content to help customers complete the conversion cycle.”

Cupshe implements real photos of their customers on product pages by curating from Instagram and uploading an image with a review through Yotpo

Likewise, social plays a big role. According to Watkins, “We feature many of our newest products most prominently in ads and monitor the performance of these ads and listen to what the customer is telling us about the product.”

But that’s not all …

It Takes an Ecosystem

Cupshe’s other differentiator is their approach to commerce itself.

Once they hit their stride, rather than build a custom solution or move to a legacy platform, Zhao upgraded to Shopify Plus.

I love Shopify Plus because it makes my life so much easier. I can adjust quickly and move as fast as I want because I know I can trust the platform to keep up.

Zhao credits several third-party applications that easily integrate with Shopify Plus for saving him time he can then devote to identifying new fashion trends and catering to new audiences.

For customer service, the team of more than 15 people across two continents uses Zendesk — a customer-service application that improves satisfaction through better conversations — and pays careful attention to their social-media properties to monitor for questions and issues.

That focus has earned Cupshe a glowing reputation and a flood of positive reviews, especially among other fast-fashion retailers where service is often sacrificed at the expense of profit.

Speaking of reviews, also key to Cupshe’s growth has been their partnership with two Shopify Plus Partners: BVAccel and Yotpo.

When Cupshe expanded their international presence to enter the US market, they knew they needed to customize their online presence for an American audience. They also needed to create a wealth of relevant content to build trust and communicate with an English-speaking market.

Those needs led them to digital agency BVAccel.

First, BVAccel helped lead Cupshe through their upgrade to Shopify Plus so they could “take ownership of their brand and easily customize the entire user experience, from product discovery to checkout.” After that, BVAccel implemented the user-generated content platform Yotpo.

In the months that followed, Cupshe generated over 35,765 reviews and customer photos, which they implemented throughout their onsite and offsite funnels.

Today, the number of total number of reviews sits just under 100,000, a staggering number that speaks to both their quality and customer engagement.

User generated content example: Cupshe product listing ads on Google

The star rating on Cupshe’s Google PLAs are sent from Yotpo to Google automatically

Cupshe inspired user-generated content on Instagram

Cupshe’s product pages are replete with UGC thanks to a reviews widget that was custom designed and developed by BVAccel 

Example of UGC on Cupshe homepage

Cupshe mixes professional and UGC photos on their homepage’s Shop our Instagram section
The result was a 101% increase in US revenue and a 24% increase in AOV.

“Shopify Plus is the solution for merchants who want to really own their brand,” says Nikki Johnson, Strategic Partnerships Manager at BVAccel. “It’s unique because it’s built for marketers and really puts the control in their hands. When you pair the best platform with the best-in-breed integrations and technology stacks, like Yotpo, it’s sure to be a success.”

Lastly, Cupshe has gone all in on multi-channel ecommerce.

Across their social-media properties, the brand mixes social content tailor-made for each network, advertising, and even chatbots:

Cupshe creates and curates multiple boards that garner over 10 million monthly viewers on Pinterest

Cupshe creates and curates multiple boards that garner over 10 million monthly viewers on Pinterest

On Instagram, the company combines free trials, contests, influencer marketing, and direct sales through Stories

On Instagram, the company combines free trials, contests, influencer marketing, and direct sales through Stories

With over half a million fans on Facebook, Cupshe’s chatbot lets customers browse and shop conversationally

With over half a million fans on Facebook, Cupshe’s chatbot lets customers browse and shop conversationally

All told, Cupshe commands a combined social audience of 1.5 million. Even more impressive, 55% of their web traffic comes from a combination of social and search and approximately 35% of their revenue is directly or indirectly attributed to social.

Still, all that leaves a lingering question: why does Zhao keep losing sleep?

Beating the ‘Curse’ of Growth

Anybody who’s built a wildly successful company from the ground up knows that initial growth is one thing. Continued growth is another matter entirely.

It’s what academics and business leaders alike call the “curse” of growth.

The looming challenge of how to keep scaling haunted Zhao, even as Cupshe broke record after record. “We needed to get even faster,” Zhao says.

For example, swimwear and dresses don’t sell as well in the winter. Cupshe now focuses on identifying the trends likely to catch fire in their traditional offseasons. However, fall lines bring unique challenges:

  • Sweaters and hoodies have longer lead times
  • They’re heavier which means they cost more to ship
  • They require more material than swimwear, which can crimp margins

To combat those problems, Cupshe established a network of international warehouses, an integrated supply chain, and global third-party logistics providers. Customers in the US and Canada who had previously waited up to twenty days for orders, now receive them in a week or less.

They also diversified their product offering by creating UNFNSHD: a fitness apparel brand for “elite athletes, weekend warriors, doctors, lawyers, artists, and everything else.”

And it’s not as though they’ve let up on the home front. As Aaron Watkins told me:

We are incredibly proud of our increase in conversion rates — up over 30% YoY — as well as our AOV — also up 30%.

“Both of those significant increases are due to being able to communicate our quality and value and not having to have as many promotions to sell through the product. It’s a combination of driving more qualified traffic and better storytelling.”

In Zhao’s words, “Our fashions are trendsetters, we drive highly targeted traffic, and we know Shopify Plus plays a big role in our conversion rate because there are no technical barriers to checking out. Looking back, we moved so quickly and have grown so fast we’ve made a lot of mistakes.”

The big one that comes to mind?

Cupshe recently ran a promotion that was met with so much enthusiasm the item quickly sold out. “But we forgot to turn off the promo and customers kept ordering,” Zhao notes. “We reached out immediately to anyone who’d ordered, let them know about our mistake, and that we’d honor the promotion as soon as the product was back in stock.

We want Cupshe to be around for a long time so instead of focusing solely on sales volume, I’m now looking at customer satisfaction which will undoubtedly lead to higher customer lifetime values.

The idea is to get a bit better every day.

It means, much like the first day of Cupshe’s existence, Zhao isn’t expecting to make nice with his pillow. “Oh, I still can’t sleep thousands of orders later,” he says with a smile. “Maybe one day, but right now there’s too much to do.”

About the Author

Aaron Orendorff is the Editor in Chief of Shopify Plus as well as a regular contributor to sites like Mashable, Lifehacker, Entrepreneur, Business Insider, Fast Company, The Huffington Post and more. You can connect with him on Twitter or LinkedIn.