As furniture buyers turn to Shopee and Taobao, local brands struggle to compete

CNA

3 days ago

SINGAPORE: When first-time home owners Nurasheila Abdul Razak and Syakir Sabirin were searching for furniture to match the Japanese wabi-sabi theme they had in mind for their new flat, time was in short supply.
Working different shifts as technicians while caring for their toddler, the couple found it difficult to shop for furniture. That changed when they discovered Chinese e-commerce platform Taobao.
'On Taobao, we can just sit at the table, browse and everything will come at the same time,' said Mr Syakir, 33.
Despite the language barrier – they relied on Google Translate to navigate the site – the couple ended up buying about 90 per cent of their furniture on Taobao.
They are part of a growing group of younger home owners in Singapore who are buying most of their furniture from online platforms for their lower prices, greater convenience and wider selection.
Taobao, owned by Chinese e-commerce giant Alibaba, has seen rising interest from Singaporeans for its home and furniture products, said Ms Miko Tse, the head of marketing at Taobao Singapore.
While she did not disclose specific figures, she said the category has seen 'strong double-digit year-over-year growth', helped by the launch of the site's English version.
Shopee Singapore has also seen rapid growth in the category. Its director, Mr Chua Kel Jin, said furniture and home living is now one of the platform's fast-growing segments. Over the past five years, buyer numbers have doubled and sales have tripled, he said, without revealing exact figures.
TOUGH COMPETITION
Prices on e-commerce platforms are often significantly lower – sometimes up to three times cheaper than local brands, home owners told CNA.
Ms Nurasheila said a customisable electric sofa she bought on Taoabo cost about S$1,200 (US$940) before shipping. A similar item in a local store had a price tag of over S$3,000, the 29-year-old pharmacy technician said.
Even after paying for shipping and hiring a handyman to assemble the pieces, the couple estimated they spent just S$6,000 to furnish their home.
Local furniture brand Cellini said such pricing could lead to a 'race to the bottom' and put immense pressure on Singapore companies that struggle to meet these cost expectations.
'The pie of furniture sales is no longer exclusively divided among local brick-and-mortar stores but is now significantly shared with online powerhouses,' said its marketing manager Kerine Yong.
Mr Joshua Koh, CEO of homegrown furniture brand Commune, said that the increased access to platforms like Taobao has changed the retail landscape.
'In the past, factories sold to retailers who would sell the furniture at a markup. But now, the factories have bypassed that middleman and gone online and started selling direct to consumers,' said Mr Koh, who is also the president of the Singapore Furniture Industries Council.
Adding to the challenge, retailers in Johor Bahru are also aggressively courting Singapore consumers, with lower prices enabled by lower operating costs, he said.
'So we are being hit by many fronts, not only the Chinese e-commerce supply.'
BIG SPACES, HIGH RENT
Local furniture companies said they have to grapple with high rental costs for their warehouses and showrooms, even though most of them have offshored their manufacturing process to neighbouring Southeast Asian countries.
Mr Ahmad Habshee, 36, the founder of woodworking brand Urban Salvation, runs a 4,000 sq ft studio and showroom in an industrial estate in Tampines. He recently downsized to one unit to cut costs.
'The location that I have is very secluded, because it's cheaper here. To survive longer, you cannot have high rent,' he said.
Professor Lawrence Loh, who teaches policy and strategy at the National University of Singapore, said many local furniture brands are now in a 'precarious position'.
'Many might actually end up being free showrooms for people who want to go online,' he said. 'People can get a look and feel of what type of furniture they want. Then they check the dimension … and just go online and replicate,' he said.
Account manager Lim Huiyi, 30, and her husband did exactly that when they were furnishing their new home a year ago, using local stores for inspiration before doing reverse image searches on Taobao.
'We will just snap a picture … and then put it on Taobao,' she said. 'Sometimes, it looks like basically the same thing for a fraction of the price.'
Apart from a TV console that they purchased from Johor Bahru, all their movable furniture was purchased online.
Affordability, variety and convenience are key draws for shopping online, home owners said.
'You can search for so many things, and you can see so many different options at once, versus in Singapore, when you go to a furniture store, you are pretty much bound to how much it can feature in that little space,' said Ms Lim.
Getting to furniture showrooms, which are often in remote areas, can be expensive and inconvenient, she added.
Another home owner who wanted to be known only as Ms Tan said she and her husband browsed local shops but couldn't find anything that caught their eye.
'Everything was very repetitive … We wanted to have something more unique,' the 32-year-old said.
Buying online did not mean compromising on quality either, said Ms Tan, who works in sales. Having lived with mostly Taobao furniture for the past two years, she said the quality has exceeded her expectations.
BUY AND THROW AWAY
Ms Faezah Shaharuddin, co-director of family business Gamar Furniture, said younger buyers are more trend-focused, which platforms like Shopee and Taobao cater to.
She added that slow furniture brands like hers have to 'straddle the line' between quality and trends.
'There's a sustainability aspect to it too. We don't want to become like fast furniture, because we do think it's a bit wasteful, and it's also very expensive and exhausting trying to keep up with the trend cycles,' she said.
Mr Ahmad said brands like his that champion circularity are struggling to survive a "buy and throw" mindset. Still, he understands why people shop online.
'Renovation is expensive in Singapore. House is expensive in Singapore. Furniture is just pure aesthetics for some people. Can use can lah, right?' he said.
Mr Morgan Yeo, director of family-owned furniture brand Roger&Sons, said many buyers see furniture as temporary – tied to the lifespan of a BTO flat.
'To them, they don't think that they will stay there for a long time,' he said. 'So why spend the amount of money?'
Yet this mindset leads to significant waste, he added.
'We only worry about the straws and the paper cups and the plastic bags,' he said. 'But we don't think about the waste we generate when we move into a house.'
A HUMAN TOUCH
Dr Seshan Ramaswami, associate professor of marketing at Singapore Management University, said retailers need to be "extremely service-oriented" and offer customers a one-stop solution for all their furnishing needs.
Assistant Professor Soo Kim from Nanyang Technological University (NTU) business school said homegrown furniture brands have to offer customers something they cannot get from online shopping.
Physical showrooms should not just be a place to browse and buy, but a destination with a "human touch", she added.
Gamar's Ms Faezah said her brand retains loyal clients who appreciate face-to-face service.
'There's a warmth to shopping in person, and we have a lot of long-time clients that we built personal relationships with. That kind of thing can't really be felt online,' she said.
Some brands are also investing in their online presence. At Cellini, Ms Yong said enhancing the online experience while maintaining physical showrooms has become essential.
'It's about delivering meaningful value and an exceptional experience. It's never just about a product,' she said.
Roger&Sons, however, has no intention to move to the e-commerce space.
Making quality furniture takes time, Mr Yeo said. 'The only way you can digitalise carpentry is if you mass produce the same type of chairs … Every chair that we do is different.'
Home owners Ms Nurasheila and Mr Syakir said they remain open to "all options" for their future furniture choices – depending on price and convenience. But they are not planning to replace what they have bought anytime soon.
'We bought this furniture hoping it would last,' said Ms Nurasheila. 'That's still the goal.'