From Manufacturing To Retail: How This S’pore Furnishings Model Conquered China With 70 Shops

From Manufacturing To Retail: How This S’pore Furniture Brand Conquered

Based in 2011, homegrown furnishings retail retailer Commune was born from a “design pondering challenge” that its father or mother firm Koda Ltd had launched into to discover a new enterprise to pursue.

“We had all the time needed to give you a model to name our personal moderately than solely manufacturing for different manufacturers,” stated Joshua Koh, 37, co-founder of Commune.

Collectively along with his brother Julian Koh, 35; and Gan Shee Wen, 41, the trio arrange Commune to refresh their household’s furnishings manufacturing enterprise.

Koda was based by their grandfather again in 1972. It primarily offers with OEM/ODM manufacturing of furnishings for international furnishings retail manufacturers, and is presently run by the second technology.

Commune is a wholly-owned subsidiary of Koda, and procures most of their wood furnishings gadgets from them.

They Had Zero Retail Expertise

Joshua Koh, co-founder of Commune / Picture Credit score: Panels & Furnishings Asia

In line with Joshua, the choice to open a retail enterprise was “consensual” — the second technology needed to increase into a brand new enterprise, and the trio needed to begin one thing of their very own.

With no prior enterprise experiences, they confronted a steep studying curve in operating Commune.

Joshua was a monetary analyst at Bloomberg LLP, and presently serves because the Chief Govt Officer of Commune. 

Shee Wen began out as a Gross sales and Advertising govt in 2005 with Koda Ltd, working his approach as much as a VP place previous to becoming a member of Commune. He presently serves because the Group’s Chief Advertising & Gross sales Officer. 

In the meantime, Julian began out with a Product Design place with Koda Ltd, concerned in designing merchandise and branding for Koda previous to becoming a member of Commune. He’s now the Group’s Chief Design Officer, and is chargeable for their design and innovation capabilities. 

The early years have been barely more difficult as no one actually knew what the ‘proper’ approach was to run a retail enterprise.

Nonetheless, after (virtually) 10 years in operation, we have now come to some extent when our expertise has been developed and we’re roughly trusted to make selections on how greatest to run the enterprise.

– Joshua Koh, co-founder of Commune

In addition they credited their uncle Ernie Koh, who had a variety of expertise working with main retailers below Koda for guiding them carefully of their entrepreneurial journey.

Due to him, they have been capable of give you a “fundamental understanding of what [they] ought to be doing.”

China Is Their Largest Market Proper Now

commune millenia walk singaporeCommune’s flagship retailer at Millenia Stroll / Picture Credit score: Commune

When requested to explain Commune, Joshua stated that it’s extra of a “life-style idea” moderately than an everyday furnishings retailer.

Commune had been developed to focus on a comparatively unserved mid market phase 10 years in the past. This was actually what made us so fascinating after we launched as there have been no different manufacturers that served the wants of the center market.

We consider in creating merchandise and collections alongside design themes that relate to our buyer base, moderately than following a sure furnishings fashion like Scandinavian or trendy modern, which most different manufacturers do.

– Joshua Koh, co-founder of Commune
commune millenia walk singaporeCommune’s flagship retailer at Millenia Stroll / Picture Credit score: SquareRooms

Nonetheless, one key problem confronted by the startup is the small market measurement in Singapore.

“With a inhabitants of simply round 5 million folks, Singapore alone wouldn’t be large enough for us to scale up considerably.”

This was why they have been bent on increasing internationally. They launched their first abroad retailer in China in 2014, which has since grown to be their greatest market.

“We picked China as the principle progress market attributable to its inhabitants measurement and in addition the rising spending energy of its customers,” defined Joshua.

“Many companies discover it laborious to outlive in China because of the competitiveness out there, however we continued to press on and spent a variety of time understanding the wants of the Chinese language shopper.”

Digitalisation Efforts Cushioned Their COVID-19 Impression

COVID-19 has impacted many companies and retail specifically, is without doubt one of the hardest-hit sectors.

Joshua acknowledged the consequences the pandemic had on Commune, particularly in the course of the circuit breaker interval.

Nonetheless, due to their investments into digitalisation, they have been capable of “nonetheless clock in gross sales through [their] e-commerce channels although retailers had closed.”

commune virtual realityCommune makes use of VR tech / Picture Credit score: The Peak

Commune has steadily embraced know-how in recent times. It has tapped on tech like digital actuality (VR) and augmented actuality (AR) to assist prospects higher visualise how their furnishings will appear like of their properties.

Moreover, its Commune: In Movement platform offers prospects with an omni-channel expertise to allow them to make purchases wherever within the retailer.

As an illustration, consumers can use the app to scan an merchandise’s QR code within the retailer and purchase it through the app or cellular POS.

They’ll additionally add gadgets to their purchasing cart or wishlist them within the app earlier than heading to the shop. A salesman will then scan their in-app QR code, earlier than bringing them to bodily view the merchandise.

In line with Joshua, Commune’s gross sales finally picked up post-circuit breaker.

“We have now clocked in double-digit gross sales progress in Singapore and China in comparison with final 12 months for the months of July to September.”

He reasoned that the work-from-home scenario has resulted in customers desirous to spend money on their properties as they spend much more time at residence now than they did prior to now.

commune altoCommune’s sub-brand Alto / Picture Credit score: Commune

Early in January this 12 months, Commune even launched a sub-brand referred to as Alto, which was primarily created to handle suggestions from prospects that a few of their gadgets have been too small for bigger properties.

“We created Alto with the intention to handle the demand from these prospects. The designs and supplies have been additionally developed with a extra luxurious really feel to them, provided that homeowners of those bigger properties additionally needed one thing somewhat extra beautiful.”

Alto opened its first Singapore retailer in Millenia Stroll in December 2019 as an extension to Commune’s flagship retailer.

Past Singapore, Alto has additionally gained a variety of traction in China, the place they’ve already opened 5 Alto franchise retailers.

In line with Joshua, one other 5 might be coming on-line throughout the subsequent six months.

Turned Worthwhile Inside Simply A 12 months

commune furniture singaporePicture Credit score: Inside Retail Asia

“Our household has all the time been a prudent one,” commented Joshua.

They invested lower than S$1 million to begin up Commune, which rapidly turned worthwhile in its first 12 months of operation.

“(We) have all the time been within the black ever since.”

“All this was primarily attributable to our mantra of attaining sustainable and worthwhile progress, moderately than excessive progress.”

Since its inception, Commune has seen a compound annual progress fee (CAGR) of over 20 per cent each year and have shops throughout many markets in Asia.

Particularly, they’ve 4 in Singapore, 4 in Malaysia, one in Hong Kong, one within the Philippines and a whopping 65 in China.

Shifting ahead, they plan to increase their model presence throughout the globe and proceed to develop new ideas that cater to the e-commerce market.

“We need to increase in different markets in Asia similar to India and Indonesia as these have excessive progress potentials attributable to their massive inhabitants measurement and rising consumption patterns,” stated Joshua.

“Europe can be on our radar as we consider that it’s nonetheless the world’s chief with reference to furnishings design and by having our model presence there, we might have the ability to construct up our model to the world stage.”

When requested to impart a chunk of enterprise recommendation, Joshua famous that enterprise challenges are ever-present, so it’s important to all the time take inventory of 1’s ardour.

With ardour for the work that we do, we’re higher capable of choose ourselves up when the going will get powerful.

It is usually necessary to continually innovate because the enterprise surroundings is ever altering, and so are prospects’ expectation and calls for. To remain fixed would result in failure finally.

– Joshua Koh, co-founder of Commune

Featured Picture Credit score: SquareRooms / Ernie Koh

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