Athan Didalou wants you to know that the luggage industry is, in his own words, “broken”. The co-founder of July, an Australian-based luggage startup, says the market is marred by “phenomenal” margins caused by cheap manufacturing. Today, newer brands have exploded onto the scene with many of them offering a gamut of accessories and tech features such as a Face ID scanner, GPS tracking, and a built-in digital scale. Unfortunately, many of these startups are still seeking crowd-funding.
Still, not all suffer the same fate. July, for instance, has successfully raised AUD$10.5 million (SGD$10 million) in its latest funding — a figure that has propelled its foray into more markets, including Singapore, an emerging landscape still dominated by mega players. While the significance behind its name is fairly simple (it references the preferred month where people go off on their summer travels), its design is anything but. Clearly, the world agrees. Its July Carry On earned the Gold title in the 2019 Melbourne and New York Design Awards.
Founders Athan Didaskalou and Richard Li hail from starkly different backgrounds. Didaskalou created Three Thousand Thieves, Australia’s largest online specialty coffee retailer and holds extensive experience in brand strategy. Li, on the other hand, co-founded Brosa, Australia’s biggest online furniture retailer. Chance meetings in a cafe brought the two together, creating a dream team that have burgeoned from them working for four months in a dimly lit warehouse to a team of 26 and a brick-and-mortar retail store. In Singapore recently to launch the brand, Athan Didaskalou had a coffee and chatted with us on July’s award-winning design and the dark secrets of the luggage industry.
In an interview with Smart Company, you referenced coming together with Li as a When Harry Met Sally situation. Tell us more.
I don’t know if it was that romantic but it was funny but serendipitous. We did meet in a cafe. When you work at cafes a lot, you tend to meet the same people. Richard and I would always work late. We ended up connecting. He’d talk about his business, I’d talk about mine and we shared ideas.
It’s when we started talking about the biggest problems we had as consumers that an opportunity came to us. Luggage was the biggest issue. But it’s really difficult to get into the luggage game because of the barrier to custom manufacturing. To take something that doesn’t exist and make it into one costs quite a bit of money. But Richard has such a strong manufacturing mind, and we knew we could create something beautiful and bespoke.
What is the current state of the luggage industry?
There is no more fragmented experience than that of the luggage industry, particularly in the Asia Pacific region. This is the typical journey for buying luggage: You go to a retailer not knowing what you want and you might be swayed by brand choice, colour, or cost; you see a luggage that’s been reduced to $400 from $1,000 and you think ‘Wow, I’m getting a significant deal.’
But what’s happening in the back is the retailer, the manufacturer, the wholesaler, and even the factory in China are making huge profits. You’re getting a case for $400 when it only takes $30 to manufacture.
Say, you go on holiday and a wheel falls off. When you get it fixed, you’d need proof of purchase before it’s sent to a third party retailer who fixes only one of four wheels. Then the other three break. Nobody owes you as a customer. The system is broken. The margins are phenomenal. They know that in just two to three years, you’re going to replace it. The industry runs on turnover.
“You’re getting a case for $400 that only takes $30 to manufacture. “
Where do July’s design and policies fit into the bigger scheme of things?
We saw this opportunity in the direct-to-consumer model to start making luggage of better quality and design. And we can control the entire experience from scratch.
We came to the game late; there were a lot of other luggage brands. So, what were we going to do that was any different? We read every single review out there, including public forums that almost no one reads. We found out about some of the pressing issues.
Polycarbonate is one of the best materials used to make luggage. It’s strong. The benefit is when it lands flat, the impact is spread out. But when it lands on its edges, those are the weakest corners. It has this ability to press in. The design brief was specific: Let’s fix the edges. We have aluminium corners as a design tribute to luggage of the 1960s. We also employ a little more curve with a rounder radius.
What usually dictates the shape of the case is its wheel housing, or the little plastic bit that holds the wheel. Most luggage companies end up getting that component off the shelf. They think no one’s going to notice it. It’s really cheap, like 20 cents per piece. In order for us to get that radius that we have, we needed to remould and get our own wheel house with our own radius. Our components are really expensive.
Everything on the case is custom made because we wanted to double down on design. The question was could we create a luggage set — in this case, the Carry On — as perfect as we wanted, with all the features of a luxury suitcase yet at a comfortable price point?
Here’s the thing: When when you buy a $2,000 suitcase, you expect it to last a lifetime. When you buy a $295 suitcase, you don’t. Yet we have all the features of a long-lasting luggage. The multi-stop handle is something you only see on high-end Rimowa. The battery is useful. You forget it’s there until your phone runs out. The wheels are beautiful. The lining is stain proof. We have a lifetime warranty. This is not just about luxury for luxury’s sake.
What inspired the design aesthetics?
Most luggage have lines on them. They’re supposed to be there for aluminium reinforcement to make it stronger. But it’s a design trait that’s been passed on to the polycarbonate and plastic cases. Simply because that’s what everyone thinks luggage are meant to look like. The funny thing is, it doesn’t even need those line. So that feature was scrapped from our brief. We only have one line in the centre of the case to reference July as the halfway mark in a year.
One other thing unique to our products is that the July logo is moulded into the case. You’ll notice 90 percent of luggage have badges. Most of them are bought off the shelf with a gap on them so brands can stick a badge on. Our moulded logo highlights that we’re custom designed.
The biggest thing for us is that we’ve invented a new way to personalise luggage. We’ve taken a technology that already existed and made it compatible to luggage — we’re the only one in the world. We made this machine that uses ultraviolet ink and our resident artists hand paint the letters onto the bag. It lasts long and looks crisp.
Tell us about the naysayers.
It was hard when we first launched. We didn’t have a brand or retail presence or any customers. No one was backing us. A lot of questions came up, along with misconceptions, especially about our batteries on our carry on. Leading up to the launch, we heard comments like ‘You can’t take a battery on the plane’, not understanding that laptops and mobile phones are also batteries. The Carry On is the only one of our luggage with the battery in it but you can easily remove it. We still get emails and Facebook messages to this day.
Some people also comment on the weight of the luggage. If you buy a luggage firstly for its weight, that’s typically the luggage that will break first. Better quality components typically weigh more. They’re hollowed out. The wheels and handles don’t have as much plastic on the inside.
We added a few more grams in order to maintain a good quality. We added about 230-250 grams more to the case by having the multi-stop handle. It’s a decision that we consciously made. We could have chosen to save ourselves weight by sticking to a normal three-stop or solve a real customer problem. We went with the latter because it’s a luxury feature we wanted in our luggage, and our customers love it. Another question we asked ourselves: Do we skimp the rubber on our wheels so that they’re lighter by 60 grams each or do we add more rubber so that it feels good when rolling around, and to make sure that it lasts even on cobblestones? We chose to go with quality.
It’s an ongoing educational process for our customers. We’re coming up with the super light luggage in order to capture the market that wants it. But we’ve got some tricks around that to maintain our quality.