Sunday 25 Feb 2024
By
main news image

When Danny Tan was shopping for furniture for his new apartment in 2013, he spent a lot of time hopping from one furniture store to another. “The whole shopping experience for furniture and home and living products was incredibly frustrating,” he recounts. “On the one hand, you have the big-box retailers that offer very generic products, but the quality is not great. On the other hand, you have the nice stuff, but it is really expensive, and the shops are spread out all over Singapore.”

This led Tan to create HipVan, an e-commerce store that specialises in furniture and home and living products. What sets HipVan apart from other e-commerce sites is that the brands featured are curated by Tan’s team of buyers. “Our strategy is different from other e-commerce companies that are competing mainly on price such as Lazada or Zalora. We realised that there was a space for an e-commerce store that offers curated brands and a focus on design, and that is something we are proud of,” he says.

“The biggest opportunities in e-commerce today target the emerging segment of Internet- savvy consumers in their late 20s and above with high disposable income. We believe this is the perfect time to build the ‘next IKEA’ online, with a much wider product selection and a more efficient business model that lets us pass on savings to our customers.”

Three categories of products
HipVan offers three broad categories of products — furniture, home and living, and lifestyle. To offer a curation of products, the e-commerce store takes a commission on the transactions made instead of allowing brands to pay to be featured on the site. Some of the brands it carries are Acapulco, Bodum, Comfort Design, Commune, Jamie Oliver and Plumen.

Tan says products have to be well-designed and of good quality to be listed on HipVan. “We make sure we get the best value for our customers at every price point. We are not afraid to sell things that are priced from $10 to even $5,000.”

He concedes that neither the furniture business nor e-commerce is new. However, the combination of the two, coupled with a target audience that “has now reached a critical mass”, has helped HipVan take off. He highlights that home and living is currently undergoing the same revolution as fashion did a few years ago, when e-commerce companies started recruiting some of the largest fashion companies to be featured on their sites.

HipVan currently attracts more than 150,000 online shoppers to its store every month. More than 70% of HipVan’s customers are women aged 25 and above. “Our website is designed to be gender-neutral, but ultimately, when it comes to home and living products, women still make a lot of the calls,” Tan observes.

Online advantage
Being an e-commerce company also gives HipVan certain advantages over brick-andmortar furniture stores. For one, Tan notes that the company is able to offer a wider selection to its customers. It currently offers more than 20,000 products for kitchen and dining, bed and bathroom, décor as well as lighting.

The company currently has its own warehousing space in Kallang, where it houses 10% to 20% of its products. The remainder is housed in each brand’s own warehouse. Not having to house all the products means that HipVan can offer more choices in colours and designs from each brand. For example, a small selection of products from Japanese home accessories brand Ideaco is sold at one or two speciality Japanese stores here, but HipVan carries the widest range.

“As big as a store like Ikea is, what it has is only in one style, whereas on HipVan, you can find things that are industrial, retro, classic, modern and so on,” Tan says. “This is very important for home and living shoppers because furnishing your home is a very personal experience and you want your home to be an inspiring place for yourself, to spend time with your loved ones or just rest after a long day’s work. Ultimately, HipVan wants to help everyone create inspiring homes without spending too much.”

To assist customers in choosing the right furniture, HipVan ensures that detailed specifications are offered so that customers can tell whether an item would fit in their homes. The site also offers videos of the manufacturing process so customers can learn more about the design inspiration behind the products and how they can be used.

Finally, to dispel any fears customers may have about shopping online, HipVan sends a free fabric swatch to those who are interested in purchasing a sofa. According to Tan, the company has received requests for only fabric swatches of sofas, as the rest of the home and living products are “pretty straightforward”. If a customer is not happy with a purchase, however, the site has a 30-day free-return policy, with no questions asked.

Launch of private labels
Tan believes HipVan’s business model has evolved since the company was founded in April 2013. Now, it is going deeper into the supply chain to get a better deal for customers. The company has launched its own mattress brand called Levitate, a minimalist furniture brand named Jervis, a contemporary furniture brand known as Milano, and Koja, a ready-to-assemble furniture line.

“These brands are complementary to all the other brands that we carry. We are still in the early stages of building the company and understanding consumer demand. Our strategy is to listen very closely to what our customers want and these labels are a result of that,” he says.

This seems to be the right formula for HipVan. In September, the company closed its Series A funding of $4.7 million led by Singapore-based Golden Gate Ventures. This is HipVan’s second round of funding, following its $1.65 million seed funding in July 2014, bringing its total funding to $6.35 million so far.

Besides its new investors, HipVan also saw the participation of existing investors, who took up a third of the latest round of funding. One of these investors is Toivo Annus, the technical co-founder of Skype. He led HipVan’s seed funding round and has since tripled his initial investment.

Tan is focused on ensuring that the company strikes a balance between a wide offering and delivering the products to customers on time. HipVan currently has its own team of couriers and also uses third-party couriers to deliver its orders. “Finding couriers will always be a challenge, and in our case, it may be even more challenging because of the big-ticket items, but it is a good problem because it means we have hit a certain capacity,” he says. He also has plans to open a pop-up store at Millennia Walk that will tentatively run for three months from November. He emphasises that there are no plans for HipVan to open a physical store. “We try to give more value to our customers by passing on the savings in rental to them. So, to us, renting a brick-andmortar store in a shopping mall is not innovative because anyone can do it.”

What Tan is aiming for is for every customer to be able to shop on HipVan anytime and anywhere. The company has also launched an app for the site. “We have interesting stories of couples who shop on HipVan while they are sitting at home after work. Previously, they had to take leave or burn the whole weekend going from shop to shop. Now, they can shop separately and send the links to each other. That is one of the big advantages of HipVan,” he says.

This article appeared in the Enterprise of Issue 699 (Oct 19) of The Edge Singapore.

 

 

      Print
      Text Size
      Share