Member Exclusive   //   September 24, 2024

DTC Briefing: How brands like Made In and Bearaby decide when to expand internationally

By Anna Hensel
Illustration with a pan, a jar and underwear with tags spelling out D-T-C.
Illustration by Ivy Liu

This is the latest installment of the DTC Briefing, a weekly Modern Retail+ column about the biggest challenges and trends facing the volatile direct-to-consumer startup world. More from the series →

Ahead of the holidays, more direct-to-consumer startups are launching international e-commerce sites or adding more shipping options abroad in the hopes that a growing number of customers in North America, Europe and beyond will add their products to their wishlists.

Cookware brand Made In announced on Monday that it was launching a U.K. e-commerce site just a few months after entering the Canadian market. Bearaby, a weighted blanket brand, plans to launch e-commece in Germany on October 1 and roll out to other countries like Austria and Switzerland shortly thereafter. Jones Road Beauty, Bobbi Brown’s beauty brand, announced at the beginning of September that it was shipping to the EU, while Rihanna’s Savage X Fenty recently debuted its first brick-and-mortar presence abroad, a partnership with U.K. department store Selfridges.

There are a few different approaches startups can take when it comes to international expansion. Some brands opt to test the waters first with a cross-border e-commerce solution and gather data on the best-performing markets before they launch their own international sites. Others opt to first make their way into an international market with a trusted partner, like a wholesaler. There’s no exact formula to determine when is the right time for a startup to expand internationally. But some startups are placing bigger priority on international e-commerce right now, thinking of it as a lower-lift way to reach new markets compared to opening a bunch of retail stores. 

Made In first tested the waters of international expansion a few years ago when it started using what is now called Global-E, a cross-border e-commerce solution that allows a brand to make its products available for sale in other countries without establishing an entity there. Made In founder and CEO Chip Malt estimated that in 2022, Malt estimated that Made In sold into about 50 countries; in 2023, he estimated that that number grew to 70. Over the course of several years, it became pretty clear that a handful of geographies were generating the bulk of Made In’s international orders. 

“The conversation became — OK, this is actually a pretty decent-sized business, more than some of the other stuff we’re doing and actively doing; let’s start to focus on it,” Malt said. Actively focusing on it entailed deciding which countries to set up an entity in versus exclusively working with a company like Global-E.

Global-E and other similar solutions help brands sell internationally in an asset-light way by automatically translating web pages and converting pricing to local currency. Global-E acts as the merchant of record on brands’ behalf; technically, Global-E buys merchandise from brands like Made In and ships them overseas.

In addition to setting up an entity in Canada, as well as the U.K., Made In also had to find 3PLs to work with in these countries.

One of the big reasons why Made In wanted to launch in Canada and the U.K., as opposed to exclusively working with a company like Global-E, was that it could more easily lower shipping rates and times, give better customer service and offer free returns as it does in the U.S. The hope was that all of those improvements would lead to increased conversion rates. 

Malt said that so far, conversion rates in Canada have increased by 60% since Made In launched its own dedicated e-commerce site in the country.

Made In also has a hospitality business, in which it sells its cookware to over 2,000 restaurants worldwide, most of which are in the U.S. Made In hopes that as it sells more products in more countries, the hospitality business will also become more international. 

Right now, international accounts for a single-digit percentage of sales, though Made In hopes that will increase into the mid-teens. 

Weighted blanket brand Bearaby, meanwhile, has taken a somewhat different approach to international expansion. Unlike Made In, Bearaby, founded in 2018, did not first test out international sales through a cross-border platform. 

But, there were a few key milestones Bearaby wanted to hit before launching internationally. Most critically, Bearaby wanted to secure its patents in Europe, a process that founder and CEO Kathrin Hamm said took about three years. Bearaby also constantly monitors the volume of searches for terms like ‘weighted blanket,’ and the brand recently saw an uptick in searches for those products in Europe. Lastly, Bearaby also started getting more organic requests from people to sell its products in Europe. 

Hamm said that Bearaby decided to launch in Germany first because Bearaby felt that its messaging around sustainability and craftsmanship would resonate with the German consumer in particular. That would also more easily allow Bearaby to expand to the rest of the DACH region, which consists of Germany, Austria and Switzerland. 

In addition to setting up an entity in Germany and finding a 3PL, Hamm said that Bearaby has also invested in “translating the whole brand ecosystem into German.” That entailed translating web pages, ads, and UGC landing pages, as well as finding a German PR agency to work with that could help Bearaby break into the market. 

“We really want to come across as very authentic and also localized,” Hamm said. 

For Bearaby, profitability is one of the most important considerations as it considers how much to invest in international expansion. Hamm said that Bearaby’s goal is to become profitable within the next 12 months within the entire DACH region. 

But Bearaby will also be tracking just how much of an uptick there is in media mentions in the DACH region. Hamm anticipates that Bearaby will have to do a lot of education in the German market about the benefits of weighted blankets, just like it did in the U.S. 

Both Malt and Hamm said that when they launched their respective brands, the intention was always to go global. Many founders dream about their brands becoming big enough to be known around the globe. The question then becomes: When is the right time for startups to invest in international expansion? Part of the answer will be category-dependent. 

“Cooking in general as a category is global,” Malt said. “Addressable market size is one of the biggest things that should dictate priority as a startup — it is kind of a matrix of difficulty of investment and market size.”

What I’m reading

  • Bonobos founder Andy Dunn took the wraps off of his new startup Pie, which aims to tackle the loneliness epidemic. 
  • Speaking of Bonobos, the brand launched its first major campaign since parent company Express filed for bankruptcy in April. 
  • Free People has been quietly growing its activewear line, called FP Movement, and recently opened a pilates studio in New York to help grow the name recognition of the brand.

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