FortyTwo is the largest online furniture retailer in Singapore, boasts founder Naveed Lee. When the 42-year-old worked as a retail executive in a furniture showroom back in 1998, he noted the low efficiency of the traditional furniture business, which in turn caused high mark-ups in product prices.
In 2002, he made the leap into the advertising industry, which saw the boom of e-commerce sites such as Amazon. Merging the e-commerce trend and the pain point in the traditional furniture industry together, Naveed toyed with the idea of an online furniture retail company.
Naveed finally started his business in 2007. Formerly known as Beds.sg, it launched with barely 60 products, under four mattress brands and four categories of beds. It rebranded to FortyTwo six years later, and expanded its product portfolio along with it.
Beyond selling beds, they “tried to sell everything“, even electrical appliances and television sets. However, that move backfired. They then decided to scale back and focus on just furniture and home décor. Now, FortyTwo features over 20,000 products on its website.
Naveed explained that the shift from beds to furniture is a natural progression because the target audience is the same, so they need not spend extra money on advertising to capture new audiences.
While there are plenty of online furniture retailers in Singapore, FortyTwo prides itself on being affordable and providing a great customer experience. “Moving into a new home is both an exciting and stressful event for a family,” said Naveed. “We aim to alleviate part of that stress by creating a convenient and reliable way to furnish your home.”
According to him, their mattresses start at about SGD 100 (USD 73) and their three-seater sofas start at about SGD 200. When asked how they keep their prices low, Naveed explained they work exclusively with factories, so they “gain pricing advantage by leveraging on (their) volume and scale.”
However, the fact that they sell so many different types of products means that they require different delivery methods. The firm also used to source for furniture from external suppliers, but since 2010, they started producing in-house designs, which has helped speed up deliveries beyond reducing costs.
The early days of FortyTwo was not smooth-sailing at all. Their biggest business challenge was building the infrastructure to support the continuous growth of the company. “For example, we had to move our warehouse four times in a span of eight years because we used up the spaces available in the building we are operating in.”
On the tech front, they had to deal with different challenges on continuous development, adoption, and integration of software to accommodate every stage of their growth. But being a purely online business also posed its own set of challenges. Naveed acknowledged that some customers might be hesitant to buy their products since they can’t physically test it before buying. Although customer interactions are currently restricted to a digital space, Naveed stressed that they aim to deliver showroom-level experiences and services to the customers’ doorsteps.
Other pros of being an online retailer is that they are not limited to shelf space and they can track the effectiveness of every marketing initiative, added Naveed. FortyTwo also has a sub-brand called Haylee, which works based on a bed-in-a-box concept. According to Naveed, they spent many years of research and development on it and it is now hailed as one of their first successes in creating a brand that is separate from FortyTwo.
Haylee is manufactured directly from the factory using materials crafted and curated from years of research and user testing, while leveraging several economies of scale to keep costs down. “Being purely online also allows us to save on costs associated with having physical space (such as) showroom costs (and) sales staff,” said Naveed. “While the bed-in-a-box concept helps to cut shipping and warehousing costs, our rigorous product testing ensures that our flat-packing compression technology does not compromise the quality of the Haylee mattress.”
Although the COVID-19 pandemic has brought about a rise in e-commerce, it has still impacted the sales of their business. Naveed shared that in the early days, the startup was bootstrapped and they were fortunate to have broke even “at a very early stage.”
It was only recently that they raised their first round of external investment, which have fueled expansion plans. While FortyTwo has no plans in the pipeline to set up a retail store anytime soon, it is looking into opening up an “experience center” in the near future. They have recently crossed their 300,000th customer mark and have plans to expand into “every major city in Southeast Asia.”
This article was originally published by Vulcan Post.
