Spotlight

Riccione – An Eye on the Dragon

Aico Teo Tian Shen, R&D Director, Riccone
Teo Leng Tong, Managind Director and CEO, Riccione

The tried and tested formula of hard work and grit helped a 14-yearold furniture apprentice from Muar, Johor, Malaysia, who entered the industry in 1979, accomplish a neat feat in the highly competitive China market. Today, Teo Leng Tong heads Riccione, which claims to be the first Malaysian furniture brand to aggressively target Mainland customers, boasting franchises across the country. The former greenhorn is now Managing Director and CEO of a company that specialises in solid wood products and is involved in export, wholesale distribution and contracted projects with property developers and hotels and resorts. According to Aico Teo Tian Shen, Teo’s son and Riccione’s R&D director: “We have more than 1,000 dealers in China.”

Mersawa, their flagship brand, is represented by over 130 stores in the Mainland, he says, adding they want to reach 1,000 outlets in the future. It is also present in the US, Japan and around Southeast Asia, dovetailing with their aggressive export programme.

“We are always looking to improve ourselves, hoping to serve our stakeholders better,” says Aico. “Understanding market demand is one of the steps we take before making any major decisions. Product R&D is our core competitive advantage, and we are constantly developing and launching more than 100 products every year.”

Snapshots of one of many Riccone & Mersawa showrooms
Some of the company’s very popular designs

Living Room

With its China base in Guangdong Province, Riccione works out of an 8,000-square metre warehouse and 1,800-square metre showroom. Local employees number around 60. In Malaysia, the warehouse measures 8,000 square meters and the showroom is 800 square metres. Employees there amount to about 400. A 30,000 square-metre factory is located in Selangor. There are plans to beef up Malaysian operations as well as other Southeast Asian locations.

Riccione’s product lines may be growing in presence, but that’s not to mean quality is sacrificed. Says Aico: “Pricing wise, we are not the cheapest in the market. But our product prices still have competitive advantage when compare with the same quality of products.

Book Rack

“Continuing R&D forms the base of our core values, making us always flexible and responsive to fast-changing market trends.

“We have sufficient inventories, which are able to cater to fast incoming sales, and this would help in reducing pressure among distributors in managing their cashflow.”

Specifically, Riccione is targeting in China those unit owners, born in the 1980s and 1990s, living in small 30- to 140-square metre apartments. “They are the potential top spenders,” Aico believes.

Offering furniture lines along the popular clean Nordic Scandinavian style, the company has touched a chord in these consumers. Its stores have been thoughtfully designed to maximize display space, “with the intention to extend customers’ browsing time so they can potentially stay longer and examine the products more thoroughly.
To distinguish themselves from competitors, Riccione also infuses Malaysian elements in its products. Aico admits they have role models.

Bed
TV Stand
Bar

“Uniqlo and IKEA are the brands we would like to learn from as they are always innovative and consistent in their market positioning despite being so well established.”

To keep people interested, they offer promotions, timing them with China’s festive seasons and public holidays.
Participation in international exhibitions, despite the convenience of web news and information, is still a must for Riccione executives. Aico stresses: “We constantly attend furniture shows in Japan, Germany and France to ensure we are updated with trends and learn about the latest available elements that are being used.

“These, we apply when designing our products, taking into account our available skills and technologies, but not neglecting market feedback and demand.”

Warehouse

Data and information gathering will always be a priority to Riccione, says Aico, “as it is definitely the tool we rely very much on to keep abreast of market trends and inject our products with a USP (unique selling proposition)…we need to think faster than our clients so that necessary adjustments can be done to secure our place in the market.”

The good news for manufacturers of quality collections like Riccione, homeowners are showing a more upmarket preference, but still keeping an eye on the price. “They are willing to pay slightly higher for much better goods,” observes Aico. The taste for solid wood furniture remains strong for the majority, as is the penchant for understated luxury, which should also exude homeyness and warmth. Beige and gray are popular hues these days.

To sum up, nesters have come to expect fresh new concepts from their furniture sources, and
will easily turn away from their usually suppliers if this demand is not met – constantly and quickly.

Bedroom
Studyroom

After-sales service is a given these days, a perk Riccione is only too happy to provide. A troubleshooting team and an 24/7 online customer response platform ensures shoppers’ concerns receive prompt support. Says Aico: “We care about our product quality, and if anything is found faulty or of bad quality, we are happy to listen and evaluate the situation in order to offer the proportionate exchange of compensation.” Warranty for one to two years is issued depending on the SKU.

Against such an optimistic growth backdrop, what else can the company, under its energetic chairman and founder Teo Leng Tong wish for?

His son Aico again answers for his visionary parent. “To have Mersawa stores present in all prominent China malls and form strategic partnerships with custom-made furniture companies and manufacturers.”

Formidable competition, he predicts, will come from their Chinese and Malaysian peers. But Riccione can still come out ahead, provided, he says: “As long as we stay alert and hungry and be updated with the latest trends, and continue to apply and improve ourselves.”

An advice any furniture professional, wanting to survive in the marketplace, would be wise to adopt and live by.

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