💸 Clearing R2.5 Trillion in Fashion Headaches
Easy to grasp? Apple has announced plans to include an AirPods feature that will live-translate other languages in real-time. It could be ready as early as the next update later this year — no word, though, on how good it’ll be with notoriously difficult languages like Afrikaans, but let’s see.
In this Open Letter:
- Big clearance: The SA startup tackling R2.5 trillion in fast-fashion waste.
- Google Gemini’s Getty, local learning landings & Solly saving Starlink?
- Head in the game: Where to catch the latest big trends in SA software.
- Who recognised this SA delivery marketplace? The results are in.
- Lonely building your startup? Join The Open Collab and get support.
WE ARE COMING TO GAUTENG!
Gauteng, are you ready for the first ever in-person The Open Letter event?
We are coming to town on the 27th of March (that’s next week!), and we will be hosting an event filled with great conversations, networking and a whole lot of fun.
With special guests, Priaash Ramadeen, co-founder of The Awareness Company and Merelda Wu, co-founder of Melio AI, we are going to discuss how AI is enabling the creation of entirely new businesses, what it takes to build an AI company in Africa and how South African founders can stand to benefit from the AI revolution!
Get your tickets now! And hurry up; tickets are limited!
TRENDING NOW
Solving Earth’s R2.5 Trillion Fashion Headache
In today’s Tuesday Deep Dive, we examine the environmental and business costs of fast fashion, showcasing a local startup solving for a better way to provide premium clothing experiences to all of SA…
The fast-fashion industry churns out between 80 billion and 150 billion jackets, shoes, dresses, T-shirts and more every year… with as much as 10–40% going unsold.
Eek, that’s 8–60 billion excess items of fashion, an overstock worth some $140 billion in unmet sales (R2.5 trillion)…
Why is this happening?
- Manufacturers enforce minimum order levels – just 100 T-shirts? No way.
- On the flip side: Retailers leverage economies of scale – bigger orders, lower cost per item, higher margins.
- Rapidly changing retail and fashion trend cycles.
- Retailers hate nothing more than missing out on a sale – so they’d rather order more stock than run out of something popular.
Return to seller…
That’s not even scratching the surface, though: Another big contributor to waste is returned items, with an alarming new trend rising on social media…
Influencers buy a “haul” of clothing items online, and then use their homes as fitting rooms, parading outfits to their followers on TikTok – asking if they should “keep or return” the items… (Could’ve gone our whole lives not knowing this is a thing, but there you have it.)
Clothing returns vary by type and where it was bought: In-store purchase returns are 10%, while online clothing purchases are double that at 26%.
Bad for business, bad for the planet
Ok, so where do all these overstocked leftovers and returns end up?
Most never go back on sale, and as much as 50% end up in landfills, 25% being incinerated, and 25% recycled.
But in reality, tons of this stuff ends up in places like Ghana, Kenya, Nigeria, Tanzania, South Africa, and Uganda under the guise of charitable donations. Problem is 20–50% of the bales of clothing cannot be used and end up in our landfills.
The local heroes finding clothing a new home
Local tech-enabled clothing retailer FARO, is tackling the problem of fashion overstocking and returns with their innovative approach: Placing high-end stores in non-core, emerging markets, where fashion brands can sell their unsold inventory for as much as 60% off.
A solid idea since South Africans want great fashion, but at a good price. And we like that they’re making it a premium shopping experience, too.
And while FARO does not have an e-commerce presence (a smart intentional play so they’re not competing with the actual brands), they currently have 4 stores (with 12+ coming this year alone), and over 3’000 brands in-store, offering their shoppers the same premium experience as if they were shopping at these fancy stores themselves.
FARO stocks:
- Last season’s overstocked items
- Open or damaged packaging (yet nothing wrong with the item itself)
- Wrong colours or odd sizes (common in about 10% of stock).
But it retains an element of lucky play: FARO doesn't stock a concentration of specific brands, so the items you do find might be pretty scarce.
The secret sauce of FARO IQ
FARO needs to process an enormous volume of fashion merchandise – perhaps a bit too much for humans, which is why they employ an AI platform called FARO IQ.
It automates buying, merchandise planning, and pricing. It’ll even analyse a brand’s stock list and score it based on how well similar items have performed at FARO’s various outlets. This helps FARO make the right buying decisions while helping the warehouse team process and price everything.
Is this the secret sauce to help FARO scale? Time will tell.
They recently raised $6 million, and have a bold vision of 1’000 stores across the African continent.
It truly is global fashion at Mzansi prices. We’re watching this space…
CHECK THIS OUT
The Next Big Trends in Software?
DevConf 2025 is fast approaching and our friends at Lula are hosting the official cocktail event in both Johannesburg & Cape Town...
We caught up with John Dalton, Lula’s Head of Engineering, to hear what he’s most excited about for DevConf this year and what they’ve been up to.
Be in the know, you know…
John says that conferences are great places to challenge your assumptions and get some external validation of what you’re thinking about building, because…
- Some of these technical aspects are covered in talks
- There’s tons of industry expertise in the room, you simply strike up a convo, and ask your question…
The big culture shift at conference talks
John’s seen a big shift towards culturally focused talks. While technical talks are always great, talks that focus on culture, especially psychological safety at work, are also applicable to engineers.
In the past year since John joined Lula, they’ve done a lot to mature their software delivery, refine their agile practices, and bring predictability and trust to Lula’s software delivery capabilities.
Lula’s list of next big things…
The team at Lula have also been cooking up some exciting stuff recently:
- Releasing the Lula mobile App (currently released to “friends and family”).
- Building an engineering culture by getting the right kind of competencies into the business, enabling the team to be autonomous and deliver well.
- Lula’s data strategy involving Snowflake, and how it’s going to change the way they see data in the business.
Get your most pressing engineering Qs answered at…
IN SHORT
Something worth repeating at the water cooler…
💊 Screening on steroids. Local PropTech startup Preferental is taking the pain out of tenant screening with an app that automates and accelerates the process, using AI to provide real-time, accurate tenant evaluations in mere seconds. Can’t wait for the app to screen out weirdo landlords…
🤖 Gemini photoshop. Well, well, well. Looks like some clever peeps have figured out how to use Google’s Gemini AI: Gemini Flash 2.0 to remove watermarks from images from stock image sites like Getty. In fact, it doesn't just remove the watermark, it fills in the blanks too. Where was this tech during the days of Thunda.com?
💼 SME learning. Grindstone managing partner Catherine Young’s Thinkroom Consulting has launched a new online learning solution for SMEs with self-paced learning videos, business templates and self-assessments on entrepreneurship, strategy, finance, legal, using AI for brand, GTM and sales enablement. Very nice.
🛰️ Starlink breakthrough? SA’s Minister of Communications and Digital Technologies Solly Malatsi has a plan that could see multinational firms (like Starkink) sidestep the BEE requirements by investing directly into initiatives that empower previously disadvantaged people and businesses instead. Hmmmm. Interesting…
😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with all your VC and startup legal sorted by Dommisse Attorneys, your own CFO for a fraction of the cost with OCFO and 12 more vital startup tools & services.
BUILDING TOGETHER
Happening over at The Open Collab
In the last few days alone, in our online network, we…
- Got to know everyone and forged bonds at the Chat Roulette 💬.
- Had a phenomenal session getting first-hand insights on offshoring your company from SA.
- Got our invites for tonight’s Cape Town rooftop founder’s social 🥂.
- Helped Nita with some awesome options for Afrikaans transcriptions.
- Got Elijah and Danei their first couple of newsletter subs.
- Discussed optimal landline calling app options for HubSpot.
- Booked our spots for our first-ever JHB in-person event.
- Welcomed so many new members, our heads are spinning in a good way 💃🏻🕺🏽.
Thinking about joining The Open Collab?
- Supercharge your network in the SA startup landscape — get that introduction, get that customer, or meet that partner.
- Get feedback on your products, services and/or offers from others who have built and are building their own products right now.
- Join all our online and in-person events for free!
- Exclusive 1-on-1 sessions with startup consultants.
WHAT YOU SAID
Drop it like it’s hot…
Last Fast-Five Friday, we gave you 3 startup lies and 1 truth, and not that many knew of Droppa…
🟨🟨🟨🟨🟨⬜️ 🛰️ Orbi-Trac: A satellite logistics startup that tracks cargo shipments from space. (35%)
🟨🟨🟨🟨🟨🟨 🚜 SoilSynth: A BioTech using AI-driven soil analysis to increase crop yields sustainably. (41%)
🟩🟩⬜️⬜️⬜️⬜️ 🚚 Droppa: A platform that connects users with on-demand delivery and moving services. (18%)
⬜️⬜️⬜️⬜️⬜️⬜️ 🏦 VaultEase: A SecureTech that locks away your valuables in 24/7 on-the-move unmarked vehicles for maximum security. (6%)
Your 2 cents…
So there you have it, Benjamin, SoilSynth doesn’t exist yet, but a cool idea? ⚗️
Now it’s just the race to get it copyrighted, William. 🚀
And now you know where to find them, Pam! 🚚
BEFORE YOU GO
Here are 3 Ways We Can Help You
Advertise or Partners — Engage 21 000 South African professionals that read The Open Letter - partner with us or run an ad campaign.
Build A Newsletter — Love The Open Letter? Want to build a newsletter just like that for your brand? We can build it with you. Check out Stream.
Startup Community — Join 80+ SA founders in our SA startup founder community called The Open Collab. Weekly online masterclasses, in-person and online meetups and a network like never before.
Until next time,
Elvorne, Renier & Jason
