Aaron Luo, co-founder of Caraa, shares hard-won lessons from his DTC luxury bag brand and how he's applying them to his new charcuterie venture, Mercado Famous. This episode offers key insights for ecommerce operators on navigating pivots, understanding market nuances, and strategically balancing DTC with wholesale for mass-market penetration.
Key takeaways
DTC experience in one vertical (luxury bags) is transferable to another (specialty food), particularly in brand storytelling and customer acquisition, but requires adaptation for market-specific nuances.
Despite the rise of online grocery, a significant portion of the market still shops in brick-and-mortar stores (over 68%). Ecommerce businesses in the food sector should plan for robust wholesale strategies to reach a broader audience.
Venture capital isn't always the best fit for retail brands; traditional growth models and strategic partnerships can be more sustainable. Focus on building capital-efficient businesses.
Educating consumers about niche products (like Spanish charcuterie) is crucial for market penetration. Brand builders need to invest in storytelling that demystifies and familiarizes their offerings to new audiences.
Carefully select wholesale partners to ensure alignment with brand values and long-term growth objectives, especially when aiming for mass-market expansion.
Nearly five years ago, Aaron Luo co-founded the DTC luxury bag company Caraa. Now, his latest venture zeroes in on Spanish meats.
Luo and fellow Caraa co-founder Carmen Chen Wu launched charcuterie brand Mercado Famous this past summer. Both Luo and Chen grew up in Spain, and have fond memories of tapas hours with friend and family.
"The mission behind Mercado was to bring not only the best we can find in Spain when it comes to charcuterie, but change the narrative around charcuterie a little bit," Luo said on the Modern Retail Podcast. "We just felt that there's a newer and younger audience that's somewhat neglected."
The company sells meat products ranging from an $11.99 serving of sliced jamón to a $300 entire cured pork leg. While the company is selling predominately through its website right now, Luo said he has ambitions to grow other channels too. "I think wholesale will have a bigger play in Mercado Famous than Caraa, for sure," he said. "The goal for the brand is to go mass to a certain extent, if we can."
True, handbags like Caraa's are made from leather -- the same material many meat products come from -- but the businesses are very different. Still, Luo said the earlier experience helped prepare him for this latest one.
"The reason we felt very confident starting Mercado Famous back in 2018 is all the scar tissues and the learnings we've had in the DTC world," he said. That is, through Caraa he learned the ropes of brand storytelling and customer acquisition. And he's using all that knowledge to help grow Mercado Famous.
Some things are very different, however, than they were when Caraa first launched in 2014. For one, the VC environment is very different. That being said, Luo has long believed that most retail brands are not best for venture investing -- and that thesis, he said, is being proved today. "I think it works for tech," he said, but "this is not a tech company."
For now, Mercado Famous is still figuring things out. Luo has big plans to ink wh
Frequently asked about this episode
What does this episode say about brand expansion?
DTC experience in one vertical (luxury bags) is transferable to another (specialty food), particularly in brand storytelling and customer acquisition, but requires adaptation for market-specific nuances.
What does this episode say about dtc strategy?
Despite the rise of online grocery, a significant portion of the market still shops in brick-and-mortar stores (over 68%). Ecommerce businesses in the food sector should plan for robust wholesale strategies to reach a broader audience.
What does this episode say about market penetration?
Venture capital isn't always the best fit for retail brands; traditional growth models and strategic partnerships can be more sustainable. Focus on building capital-efficient businesses.
What does this episode say about wholesale & partnerships?
Educating consumers about niche products (like Spanish charcuterie) is crucial for market penetration. Brand builders need to invest in storytelling that demystifies and familiarizes their offerings to new audiences.
What does this episode say about brand expansion?
Carefully select wholesale partners to ensure alignment with brand values and long-term growth objectives, especially when aiming for mass-market expansion.
