Boasting 130K+ item uploads, Japan’s XZ app is exploring revenue streams from fashion business



XZ (pronounced “closet”) is an online fashion community launched back in September 2014, aiming to help young women enjoy wearing more variety of clothes. In this space, we have recently seen launches of some similar services, such as Primode giving users chat-based outfit recommendations as well as subscription-based fashion item rental service AirCloset. But XZ is distinguished for giving users opportunities to mix and match new items with the clothes they already have in their closet.

Almost a half of their users are females aged from 18 to 26. More than 130,000 fashion items and 22,000 outfit patterns have been uploaded from users to date, increasing by 1,000 new items every day. While women have many clothes in their closet, they are selective about what to wear from among them because they don’t want colleagues to think that they wear the same clothes all times.

The XZ platform addresses these worries in their daily lives, helping them find the best outfit using the clothes already owned – leveraging wisdoms of crowds via social media, rather than encouraging them to buy a new one.

Yoshihiro Ogita, CEO of the platform’s operating company Standing Ovation, explained:

In view of consumer behaviors in fashion, most conventional services are centered on what users do prior to new purchases or how users should handle clothes no longer used. While e-commerce sites and fashion-focused social networks based on snapshot sharing fulfill the former role, peer-to-peer marketplaces or flea market apps are utilized for the latter purpose. But we help users find how to enjoy themselves more with the clothes they have.

Making good outfits even with inexpensive fashion items

XZ’s calendar function

Every user uploads about 30 fashion items to the XZ platform on average, which is extremely higher than was expected by the Standing Ovation team, which foresaw an average of 10 items at most. According to Ogita, 11% of these items are used for creating new outfits on the platform, where users are some 10 times more active than most user-generated content sharing platforms; this is because users post articles based on their belongings.

Ogita was surprised to see a variety of fashion items ranging from fast-fashion to high-end labels have been uploaded on the platform. Furthermore, many items used for creating outfits are from fast-fashion labels. Beyond assumptions that many people don’t want to say they have only fast-fashion items, users are enjoying highlighting their skills and sensibilities that allow them to create cute outfits using inexpensive items.

They recently launched the calendar function, enabling users to remind which outfit they have chosen each working day. This will encourage users to register more fashion items on the platform while contributing to an improved user retention rate. Furthermore, the lab team is developing a new feature that notifies users when their items are used to create new outfits, or helping a user find other users that she can share her taste with. Looking ahead, the platform will be enhanced to let like-minded users connect with each others based on attributes like preferable brands or age brackets.

Ogita added:

We have received much feedback from users. Based on that, we will roll out a new feature in April, to help users find the best outfit from their items for a first date with someone.

Monetization strategies

Multiple outfits created with the same fashion item.

Although initially a C2C (consumer-to-consumer) marketplace launch was planned, the team is focused on community-building reflecting user feedback now. The uploaded items are what users prefer to keep wearing and not intended for sale to someone else.

An analogy comes to mind: when the social shopping was all the fuss, typical social
network services failed miserably in making money upon integration with e-commerce platforms. This happened as user mindsets on social network platforms differ from those on e-commerce platforms. Users visit a social network service to communicate with friends, a completely different mindset when buying something. The same holds for XZ.

The Standing Ovation team will allow fashion brands to create their own closet on the platform to monetize. By letting brands publish their new items through an own closet to users while ascertaining how their items are utilized for creating outfits by users. As traffic further increases, they plan to establish an advertising business on the platform too.

This will provide substantial benefit to users because it facilitates new item purchases
while considering outfits with what they already have in their closet. The company has several premium functions, allowing users to sort out items in order of clothing pattern or seek professional advice for better outfits.

Huge potential

XZ users start using the platform because they want to manage their fashion items. Once started, they enjoy discovering new outfits and ideas there. To help more people easily understand this experience, the company offers an additional menu that lets users ask a warehousing company to take and upload pictures of their fashion items.

Ogita is spending much effort to enhance the potential and the convenience of the XZ platform.

If a partnership with a job search portal in the fashion industry is established, employers can check the fashion sense of potential employees by seeing what kind of outfits or clothes they have in their closet, to realize a better matchmaking. If partnered with a leading fashion magazine company, they can help find fashionable girls using XZ as a model audition platform, even in rural areas.

Moreover, if apparel brands can integrate their customer database or purchase history with the XZ platform, they can better serve customers beyond purchases since they can understand how customers use these items by discerning user behaviors on the platform.

Ogita concluded:

Our service is highly connected to users, it is totally about what they have. Not only as a reference, they can also style themselves based on it the next day or perhaps the same day as well. We hope to become a standard for daily-use fashion apps.

Translated by Taijiro Takeda
Edited by Masaru Ikeda
Proofread by “Tex” Pomeroy