US furniture maker gears up for global push
Furniture maker Nova LifeStyle Inc’s recent listing on the NASDAQ Global Market is the first step toward better sales in China and other international markets, according to the company’s president.
Tawny Lam said the Jan 10 listing was a “very exciting moment” for the Commerce, California-based company.
“The process of applying to the NASDAQ was something we planned in the last six to eight months,” Lam said Wednesday in an interview with China Daily. “It’s a great start to the year to be recognized, and getting on that platform sets a very good tone.”
Jan 17 was the first day of trading for Nova on the NASDAQ exchange, but the company’s shares have been publicly traded on the Over-TheCounter Bulletin Board (OTCBB) since the summer of 2011.
The OTCBB is a trading service offered by the Financial Industry Regulatory Authority (FINRA) for companies that have not listed stock with a national securities exchange.
Since Nova’s establishment in 2003, the company has set up more than 100 franchise stores in China carrying its products. The company, which both designs and manufactures furniture, has established distinct brands to target middle and upper-middle class consumers in the US, China and Europe, among other locations throughout the world.
In 2012, Nova saw revenue climb 54 percent to $66.3 million from $43.2 million in the previous year, when more than a quarter of the company’s business was in China.
China was the second-largest market for Nova in 2011, coming in at 26 percent, slightly ahead of European sales at 22 percent. The leading market remains the US, which accounts for nearly half, 46 percent, of Nova’s sales.
Lam said one of Nova’s primary goals is expanding e-commerce sales in the company’s main markets.
Furniture e-commerce sales in the US and China last year rose 18.5 percent and 60 percent, respectively, according to a Feb 5 corporate presentation on the Nova company website.
“It’s a big trend in China now,” Lam told China Daily. “We wanted to get into the platform of doing Internet business and we’d like to be the first to capture that sector of demand. E-commerce is a billion dollar industry, so why not furniture?”
Nova is not the only US furniture company looking to increase sales in China.
Bloomberg Businessweek reported on Jan 14 that Wisconsin-based Ashley Furniture HomeStore opened its second retail store in the southern city of Suzhou, Jiangsu province, in December.
Ashley Furniture — the top-selling furniture brand in the world — opened its first superstore in May 2012 with a four-floor showroom near Shanghai’s Zhongshan Park, a designated commercial zone where high-end residential buildings and shopping outlets are in ample supply.
Paul Dotta, Ashley Furniture’s vice-president of International Business, said the difference between the US and Chinese markets boils down to things “we don’t offer in the US”.
“The Ashley Furniture identity in China will be different than the one we’ve built in the US,” Dotta said in a January interview with Bloomberg. “When you come to China, the middle class is very different from the middle class in the US. Your product has to change, and not just your physical product.”
Nova and Ashley may face similar market conditions, but Lam does not really see the two as competitors.
“We are on a different path than Ashley because we have a focus on contemporary furnishings versus more traditional furniture like Ashley’s,” Lam said. “Ashley isn’t really a competitor; if anything we actually complement one another.”
Lam said that beyond getting listed on NASDAQ, Nova has “a lot more work to be done”.
“There is a demand in China and we intend to fill it,” he said. “Now we can continue production to help build a brand in China. There’s a lot of validation in getting to trade on the bigger floor, but we certainly think this is just the beginning.”
Following furniture maker Nova LifeStyle Inc’s listing on the NASDAQ on Jan 17, members of the company, including President Tawny Lam (center, in red), celebrate with a toast at Nova’s headquarters in Commerce, California. Since Nova’s establishment in 2003, the company has established more than 100 franchise stores in China.