Setmoda

What did it do?

Setmoda was a fashion e-commerce site launched in summer 2017 by MNG Holding, the Turkish conglomerate. It suggested clothes to users according to their mood, putting different pieces together into an outfit with one click and steering shoppers towards buying them as a set. The site sold more than 5,000 products and set out with a team of around 100 people.

Why did it shut down?

Around eight months after launch, in February 2018, Setmoda announced in a short notice on its website that it was ceasing operations. MNG Holding made no official statement about the reason for the closure. According to industry commentary reported by Hürriyet columnist Jale Özgentürk, the holding had invested the wealth built up from cargo and tourism in textiles and retail, a field far removed from its own. The same commentary argued that the site could not compete with Instagram boutiques, which were growing fast on the wave of cheap fashion. It was also reported that customer complaints about the site had begun to rise before the closure.

The story

MNG Holding was a group of companies that started out in construction contracting in the 1980s and grew through tourism and cargo. According to Jale Özgentürk, writing in the Turkish daily Hürriyet, chairman Mehmet Nazif Günal founded an e-commerce company to support his children's search for a new sector. According to Habertürk, the move came right after the group's decision to sell MNG Kargo to the Dubai-based Mirage Cargo. And so setmoda.com went live in June 2017.

The site's idea was simple: suggest clothes to users according to their mood at that moment, and turn different pieces into an outfit with one click, sold as a set. Its slogan summed up the idea: "Modanı resetle" (“Reset your style”). According to Habertürk, CEO Tuğrul Çetintaş said after the launch that online retail needed fresh perspectives and that Setmoda would fill that gap. The site sold more than 5,000 products, and the team numbered around 100. The goal was to break quickly into the ranks of the industry's big names.

The plan did not work. Webrazzi wrote that rumours of the site's closure had been circulating since January 2018. A notice published on the site on 17 February 2018 announced that operations had ended and that orders not yet dispatched would be delivered. Webrazzi had also noticed that the company's social media accounts had last been updated on 1 February. The site thus closed around eight months after launch.

MNG Holding did not explain the reason for the closure. Industry commentary converged on two points: the holding had entered a business far from its own expertise, textiles and retail; and it had struggled to compete with the fast-multiplying Instagram boutiques selling cheap fashion. Setmoda's story remained a brief experiment showing that capital and logistics muscle are not enough on their own to create a fashion brand.

Lessons for founders

• The backing of a powerful conglomerate does not make up for a lack of experience in a sector you do not know.
• In a crowded market such as fashion, your rivals are not only the big sites but also the small boutiques selling on social media.
• Starting with a team of 100 inflates fixed costs; do not scale before you have seen the demand.

Sources

1. MNG Holding's e-commerce venture Setmoda has closed (Webrazzi, 2018-02-17)
2. Opened with high hopes, 'Setmoda' closed in 8 months (Habertürk, 2018-02-18)
3. Shopping site setmoda has closed (Hürriyet, 2018-02-18)
4. Shopping site setmoda has closed (Digital Age, 2018-02-19)

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