Modern Payment Options Help Clothing Company Give Families a PatPat on the Back

Albert Wang and Ken Gao were both college grads pursuing a promising career in computer science engineering when their lives took a dramatic turn. Both welcomed daughters within the same year and, suddenly, they found themselves knee-deep in a market gap.

_{PatPat clothing for the family are seen in this catalogue photo.}

"Both of our families started talking about the quality of clothes for kids in the market and the lack of design options," said Albert. "We were disappointed."

As all successful entrepreneurs do, the friends took the challenge and turned it into an opportunity. They quit their jobs and started PatPat, an online shop offering colourful designs, silky-soft fabrics, and fashion-forward accessories for tiny newborns, stylish toddlers, and big kids wanting to make a big impression. Today, the company's post-money valuation is reportedly between $1 billion and $10 billion.

Together with their wives, the duo started small, sourcing a first collection to sell on a popular marketplace. Soon, a friend connected them with an investor in Silicon Valley

"The investor told us that with our backgrounds in computer science, we should aim to do something different and sell directly to consumers rather than through a business with consumers," Albert said.

The investor offered the men $2 million to quit their jobs and focus on the business full time. The men accepted the offer and never looked back. They went on to create an online-only business with products created for an Instagram aesthetic, transforming the company into one that today has 61 license partners, 23 million global customers, 17 million social media customers and more than 400,000 positive reviews.

"We were just two engineers, we only knew how to write the apps," Albert said. "We knew a little bit about how to promote it but didn't know how to really make and design the clothes. We knew nothing. We did some research and we went to Asia and we found a way to re-engineer the clothing supply chain. We were able to input an information system and track all the data."

Using data science to shape the future

They also introduced matching family outfits, a trend that gained a lot of traction and continues to be a hot marketing tool. They were able to come up with 400 unique designs, whereas most brands tend to have about 10 or 12 styles, giving them a competitive advantage, he said. They ship from warehouses in LA, Seattle, and Dongguan.

_{PatPat co-founder and CEO Albert Wang is pictured with his family.}

In the 10 years since opening shop, Albert said they are now focused on appealing to a Gen Z audience.

"It's quite a different culture, more socially conscious and cause-driven, and engaging with social media in different ways," he said. "They want things that are unique. We have a brand that's getting most of our traffic from social media. Many of them are on TikTok now and others went on other platforms that we were not even familiar with. The constantly changing user behavior is definitely a challenge that we didn't have as a company when it was founded 10 years ago."

Once again using their background in engineering and computer science, they managed to shift their social media strategy successfully by analyzing their data and shifting their algorithms. They are also looking at new ways to develop their brand whereas in the past, they were focused on developing the PatPat platform. They have launched a wholesale arm of the business, allowing other small businesses to sell their products and are looking at eco-friendly fabrics to produce their clothing as well as a line of clothes that will glow in the dark.

A reliable payments platform is key for any business

The one mainstay in the business that has supported its growth has been the use of PayPal. The payment platform has allowed PatPat to build trust with customers as Albert and Ken built the business, putting consumers around the world at ease paying through PayPal's trusted and secure platform. Today about 30% of their global clients use PayPal, Albert said. "We live in the age of AI where payments should be this simple and direct. People expect that and PayPal delivers that."

The company also relies on PayPal's Pay Later solutions, including Pay in 4 which allows customers to pay for products in four equal payments.

"It's been amazing," he said. "The conversion rate is much higher than other solutions. This gave us much higher margins."

Albert also lauded PayPal's fraud tools, calling them "the best fraud and risk protection" they've worked with. "I think businesses need to be using PayPal from day one, before they start working with any other tools. PayPal is the future," he said. "It can decrease the cost of risk, and allow for high conversion rates," said Albert. "It can also increase the translatability of your site. Without the PayPal button on our site, we would have seen a marked difference a in our conversion rates."

Albert said having a strong payments platform is all part of how they support their customers, namely new parents.

"Everything we do is aligned with our mission of supporting families with affordable, quality clothes," he said. "Even the name PatPat is supposed to symbolize a pat on the back, a show of support. That has always been our mission."

_{¹ About Pay in 4: Loans to CA residents are made or arranged pursuant to a CA Financing Law License. PayPal, Inc. is a GA Installment Lender Licensee, NMLS #910457. RI Small Loan Lender Licensee. When applying, a soft credit check may be needed for some consumers, but will not affect their credit score.}

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