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How 4 friends’ digital-first strategy helped Castlery blossom after 9 years

Homegrown furniture brand that will officially open its biggest flagship store on 7 October.
Declan Ee, co-founder and president of homegrown furniture brand Castlery.(PHOTO: Nick Tan/Yahoo Finance Singapore)

By Prince Lee

SINGAPORE — What started as a four-man team, hunkering in a 900 sq ft basement office in Ubi in 2013, has blossomed nine years later into an internationally respected furniture company that will officially open its biggest flagship store on 7 October.

Castlery’s flagship store in Liat Towers, in the heart of Orchard Road, totals 24,000 sq ft across two floors — that’s 26 times the size of its original office — and is set to complement its online-to-offline shopping experience. While the retail space is more than twice the size of its previous showroom in Jit Poh Building, Castlery is still sticking to its formula of being digital-first.

Still, the journey for the four co-founders — Fred Ji who is the current chief executive officer; Zhou Zhiwei who is chief technology officer; Travers Tan, senior vice president of sales; and Declan Ee, president — was not without its challenges even though they started in the digital space.

In the first month that Castlery went live, the company made a mere S$2,000 in sales from an armchair, a sofa and a few light bulbs.

But the motivating factors — such as the frustration with the lack of well-designed, quality furniture in Singapore that had compelling price points and reasonable delivery times — behind the birth of Castlery remained strong.

The four pressed on, and in early 2015, sales increased to about S$250,000 a month. And as of early 2020, Castlery became profitable, having experienced a 600 per cent growth during the pandemic.

(PHOTO: Nick Tan/Yahoo Finance Singapore)
(PHOTO: Nick Tan/Yahoo Finance Singapore)
(PHOTO: Castlery)
(PHOTO: Castlery)

Digital-first focus

When asked about the necessity of a showroom in this digital world, Ee said, “We see it as a complementary experience to online shopping, and want to bring the fun in the tactile aspect of furniture shopping to our customers.”

This is in line with his long-term goal for Castlery, which is to be “the go-to furniture brand for the next generation of urban millennials”, as these “price-conscious and discerning individuals aged between 25 and 45” are comfortable with e-commerce and purchasing everything online.

“Being digital-first really allowed us to remain accessible to our customers as they started on their own home furnishing projects amid the pandemic,” the 39-year-old Ee said in a recent interview with Yahoo Finance Singapore.

He added that most of Castlery’s Internet-savvy customers prefer to use the web version of Castlery.com for in-depth research and engagement with products, so the brand will continue to invest resources to elevate the web experience.

As part of Castlery’s global expansion plans, the brand plans to hire 100 more staff by 2023 in supply chain, marketing, visual merchandising, and more over the next 12 months, boosting headcount to 400 globally. Currently, Castlery employs 250 people worldwide, with over 70 per cent based in Singapore.

A sense of home

The Castlery app, launched in 2020 as a result of lockdowns and safe management measures during the pandemic, also boasts an augmented reality (AR) function that allows customers to visualise furniture in their home.

Another major shift during the pandemic was how the meaning of home had changed, as Ee observed that people increasingly found pleasure in creating a space for themselves to thrive in. This is one of the reasons why Castlery flourished in the midst of the pandemic, managing to deliver 300,000 pieces to over 100,000 spaces globally — a milestone for the company.

Other digitalisation initiatives also covers Castlery’s day-to-day operations, which leverages data and insights to sell their products while designing quality, customer-centric furniture that can withstand the rigours of daily life.

For instance, Castlery works closely with logistics partners and share data across the supply chain to help improve forecasting accuracy and to cut time and costs for their customers. These initiatives help to contribute to sustainability, as well as provide a buffer from the rising costs of inflation.

“Working on forecasting accuracy also helps with inventory management, which in turn reduces over production,” Ee added.

What's ahead

This digital-first attitude has also helped with Castlery’s expansion to overseas markets like the US and Australia, where despite not having a physical shopfront in either of these markets, they account for 80 per cent of Castlery’s global sales revenue.

The homegrown furniture brand’s first foray overseas was into Australia in 2017, which Ee shared is experiencing “over 100 per cent year-on-year uptick in growth”. Meanwhile in the US — a market Castlery dipped its toes into during the pandemic — the brand now covers top 50 metropolitan areas in the US, up from seven cities when it first started. Castlery is available in three countries at the moment.

Ee admits that bringing the business model overseas was another challenge that they overcame, in an effort to go international.

“We were inexperienced when we forayed into the Australian market, but have since learned to only stay online, conduct extensive market research, and tailor our product offerings to different markets,” he explained.

Core values matter

What helps is having core values to keep its founders and staff grounded. The company’s five core values are: wanting to make an impact, striving for excellence, being open-minded, staying grounded and standing together through good times and bad.

“Our values were distilled from these nine years but I find that they are applicable to anything you do, at any stage of your entrepreneurial journey.”

For budding local entrepreneurs, Ee advised, “The journey is rife with challenges and can often feel like all the fire-fighting is not what you envisioned when you came up with your business objectives.

“Have grit, be passionate, and be open-minded to receiving help and to differing perspectives.”

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