Entrepreneur

From Diamond Rings To Furniture: "7-Figure" S'pore Startup IUIGA Is Conquering Many Verticals

According to homegrown lifestyle brand IUIGA, they found it a “dilemma” when they shop for home products.

They often had to choose between premium brands that were exorbitantly priced or mass-market brands that were ubiquitous in quality and design.

As consumers themselves, they were frustrated with the lack of a middle ground and were floored by the excessive markups. They wanted an alternative where they can have quality at an affordable price, but couldn’t find one that met their expectations.

They decided to take things into their hands and came up with IUIGA — “thoughtfully-designed and premium quality everyday goods at completely transparent prices.”

Why IUIGA Products Are So Affordable

jaslyn chua iuiga co-founder
Jaslyn Chua, co-founder of IUIGA / Image Credit: IUIGA

IUIGA is built on this one simple question: “why pay so much for quality?”

It focuses on producing quality goods at a lower cost, and is the first e-commerce brand in Singapore and the region that operates on a unique ODM (Original Design Manufacturer) business model.

Basically, all IUIGA products are manufactured by the same factories that produce for big brands such as Sephora, Samsonite and WMF.

It previously included Muji in the list of big brands, but this claim had landed them in hot soup.

In March last year, the Japanese retailer sued IUIGA for “trademark infringement”. IUIGA later backed down, agreeing to “remove and cease” Muji’s trademark in its marketing and promotional material.

While IUIGA does not wish to comment further on this lawsuit, it strongly stands by their ODM model.

By partnering directly with ODMs and selling directly to consumers, they are able to offer “exceptional products at a lower cost compared to other premium retailers,” said Jaslyn Chua, co-founder and Chief Growth Officer of IUIGA.

In traditional retail, a product is marked up eight to 15 times by the time it reaches you. The product goes through a long process of at least 10 to 20 layers from manufacturers to distribution and finally to the end consumer.

Factoring in profits at every layer of distribution and rental costs, traditional mark-ups make up a good two-thirds of the final product price that you see in stores.

– Jaslyn Chua, co-founder and Chief Growth Officer of IUIGA

Product labels are also removed to eliminate potential added value from branding. This conveys a strong message to consumers that you are paying for the quality, not the brand.

iuiga transparent pricing
Transparent pricing / Image Credit: IUIGA

Another one of their key unique propositions is transparent pricing, where they openly share their mark-ups with consumers to show them exactly where their money went.

According to Jaslyn, each product has a different percentage of costs since they are made in different factories using different methods.

As such, we share the true cost of quality through the transparent breakdown of costs and our markups under every item on our website and app.

Traditional retailers cannot be this transparent as they have many layers of middlemen costs to consider. By building an end-to-end supply chain, we are able to lower our margins and pass on these cost savings directly to the end consumer.

– Jaslyn Chua, co-founder and Chief Growth Officer of IUIGA

Going From Online To Offline

When IUIGA first launched in 2017, it started off as a purely online model, but it soon evolved into a hybrid model as they started establishing both online and offline presence.

iuiga pop-up store
IUIGA’s pop-up store / Image Credit: IUIGA

They launched their first pop-up store at SingPost Centre in May 2018, followed by their first permanent retail store at Causeway Point in November that year.

According to Jaslyn, the pop-up store allowed customers to touch and feel their products in person before they buy.

Data also revealed that online penetration rates in Southeast Asia is less than five per cent compared to an average of 25 to 30 per cent in bigger markets like China and US.

This translates to 95 per cent (of) conversions happening offline (and) gave us a sound reason to consider going online.

I was also very excited to experiment with offline retail as Singapore is a satellite city with a shopping mall at almost every station. If this strategy works, it will mean a huge increase in brand exposure for us too.

– Jaslyn Chua, co-founder and Chief Growth Officer of IUIGA

Additionally, while going online has helped eliminate brick-and-mortar expenses, there were some pain points that they couldn’t address such as the process of exchange and returns.

Although IUIGA provides a free 30-day exchange/return policy, it was costly for customers to return a bulky item such as pots and pons.

With retail stores however, customers can now buy online and exchange a product in store without paying a hefty shipping fee. This made a lot of sense to them as they want customers to be able to make a purchase with confidence.

Today, IUIGA has grown to 10 retail outlets across Singapore in just three years.

From Diamond Rings To Mooncakes To Furnitures

Although IUIGA started off selling everyday home products, they have since branched out beyond that.

iuiga solitaire diamond ring
IUIGA’s solitaire diamond ring / Image Credit: IUIGA

Last year, IUIGA launched one-carat solitaire diamond rings at the “true cost” of S$1,799.

A quick check on their website however, showed that a one-carat diamond ring in 18K white gold is priced from S$2,499.

With industry mark-ups, the traditional retail price of a one-carat diamond ring costs an average of S$5,174, according to IUIGA.

When asked about the traction so far, Jaslyn said that sales have been encouraging with about 10 customers per month.

IUIGA also delved into F&B last year with an inaugural mooncake launch to coincide with the Mid-Autumn Festival.

iuiga lava mooncakes
IUIGA lava mooncakes / Image Credit: IUIGA

This year, it released a collection of lava mooncakes since the circuit breaker period with interesting flavours like Durian Lava, Matcha Lava, Purple Sweet Potato Lava and Lava Custard.

Another breakthrough for IUIGA is its recent foray into the furniture and furnishing market as it launched its first-ever furniture showroom located at TripleOne Somerset.

iuiga furniture showroom singapore
IUIGA’s furniture showroom / Image Credit: IUIGA

According to Jaslyn, furniture was a “highly requested” vertical from customers and as IUIGA continues to cement itself as a home and living brand, expanding to include furniture was a natural progression.

She added that the furniture range at launch focuses on contemporary designs with minimalist aesthetics, and are ethically sourced with no questionable origins.

A majority of the furniture range will be “around S$1,000 or less” as there are no middlemen markups involved — they are sourced directly from manufacturers and sold directly to consumers.

The store also provides complimentary layout design services that include 3D rendering so customers can visualise how they can frame the IUIGA pieces in their home.

They Raised US$10M Funding Amid COVID-19

Earlier in May, IUIGA raised US$10 million in a Series A funding led by Konimex Technologies, a subsidiary of Indonesian conglomerate Konimex Group.

This fresh funding will be used to invest across IUIGA’s operations in Singapore and Indonesia, with the latter being the key focus for 2020.

iuiga indonesia
IUIGA Indonesia team / Image Credit: IUIGA

IUIGA recently launched in Indonesia in August, marking it as their first overseas market.

“IUIGA chose the Indonesian market because of its burgeoning tech-savvy demographics as well as its immense economic potential,” explained Jaslyn.

“The combination of a mobile-app driven consumer culture and foreign investments made Indonesia a clear choice for IUIGA’s next stage of expansion.”

The funding will also be used for product development and technology investment. It is investing in big data and artificial intelligence to deepen e-commerce personalisation.

When asked if IUIGA faced any fundraising challenges, especially since it took place in the middle of a pandemic, Jaslyn stressed that fundraising in any environment is challenging.

The fact that they are able to meet the confidence of investors during this time shows that IUIGA is an “agile and responsive business,” she added.

While COVID-19 didn’t really affect their fundraising, it has badly impacted their retail business.

Shopper traffic has been on the decline since the outbreak, and footfall has dropped by an average of 30 per cent across all 10 retail stores islandwide with consumers avoiding crowded areas.

However, online sales have been doing very well, we are seeing an increase of three times the revenue online compared to retail. Overall, the effect of the virus was not that pronounced on revenue because our online channels (website and app) have helped to cushion our figures very well.

– Jaslyn Chua, co-founder and Chief Growth Officer of IUIGA

Jaslyn also observed the increase in self-collection for online orders, which has indirectly helped to direct online traffic to stores.

On her thoughts on the retail landscape in Singapore, Jaslyn said that countering traditional retail by simply slashing prices will likely be a “losing battle”.

Retailers must find creative ways to offer value to consumers that online-only stores cannot, or embrace the showroom concept by integrating their web and in-store experiences. For retailers who operate in both channels, this could present new opportunities to create value.

IUIGA is a great example of this. Consumers can get the best of both worlds — the convenience of online shopping and the ability to see the product in person pre-purchase. The future of retail may be more of a convergence of the two rather than a war between them.

– Jaslyn Chua, co-founder and Chief Growth Officer of IUIGA

IUIGA Is Now A “Seven-Figure” Omnichannel Business

iuiga team singapore
Image Credit: Glints

IUIGA took off from the get-go, grossing half a million revenue in just 100 days.

It has since grown strength-to-strength as a “seven-figure omnichannel business” with 10 retail stores islandwide.

Despite the success it has accumulated so far, IUIGA is still fraught with business challenges.

Their heavy operating model is laden with risks in supply chain management and a high demand for cash flow. Another problem that they face is how to effectively increase stock-keeping units (SKUs) and expand in scale.

I will reframe the proposition this way: having retail stores alleviate this challenge as retail stores double up as extra inventory space, other than being a showroom and an additional marketing channel.

For instance, if I am going to stock all my items in a warehouse, why not stock it somewhere customers have easy access to?

– Jaslyn Chua, co-founder and Chief Growth Officer of IUIGA

This is why IUIGA is working on opening a few more retail stores in Singapore this year and expanding into Hong Kong and Macau by end of the year.

“My goal is to be known as Southeast Asia’s pioneer direct-to-consumer lifestyle brand,” said Jaslyn.

To achieve this, IUIGA is focused on continually improving their products.

“I think it is very important to create something important which is not money. A lot of entrepreneurs want to generate fast money, which leads to attracting the wrong kind of investors and employees and the company perishes prematurely.”

Featured Image Credit: IUIGA

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