A furniture retailer who rejects the high street
I MEET Ning Li at Made.com’s new showroom in Notting Hill. I’m assured it’s not the online company’s first step towards being just another high street furniture retailer, but a new way to “engage with customers”. Indeed, Li believes Made.com’s success hinges on its deliberate avoidance of the high street for exclusively online retailing.
Growing up in China’s furniture nucleus – Fóshān – had no bearing on Li’s career. A few years back, a leather chesterfield sofa caught his eye, until he saw the €3,000 (£2,393) price tag. A combination of market research and a conversation with an old school friend led him to discover that it was sold by its Chinese suppliers for $300 (£188). The seed for his new business venture was planted.
The UK furniture industry is a “£20bn market”, says Li, yet is one of the slowest markets around. “Look at books, travel, fashion. You could never have a discrepancy of this sort in those markets, where everyone compares the cost of the products they buy”.
Being exclusively an internet company offers Made.com consolidation of volume: through his contacts Li could buy that sofa in China for $300. But factories don’t often sell direct to customers. Made.com cuts importers, wholesalers and high street retailers out of the production chain, directly connecting customers with the manufacturers. Li doesn’t have the risk of inventory, so “the consumer gets a low price, designers get a cut and we make a profit”. So everyone’s a winner, I suggest. “Perhaps not the people selling leather chesterfield sofas for €3,000”, he quips.
During a short stint in investment banking, Li quickly concluded his productivity levels were at their best when he was boss. It seems he was right: since leaving banking, Li has set up two companies. I ask him about the best aspect of his job. “Freedom”, he says. But, with freedom comes responsibility. “I realise that the decisions I make affect our 80 employees, not to mention the suppliers and customers that rely on us.” The biggest downside? “Never having a real holiday or even a weekend. I can never fully switch off. But it’s fine, that’s the choice I’ve made”.
The key challenge when starting a business, he says, is finding the right people. “The most important thing is to find people with complementary skills”. Bearing this in mind, he got co-founder Julian Callède (“for the commercial side”) and Chloe MacIntosh (with the “eye for style and design”) on board. The co-founders never doubted that their model would succeed. “We each had concerns over the execution risk at times, that’s why it’s important to have co-founders to balance your views when you’re feeling downbeat”.
But it’s not just co-founders and employees that need to be chosen carefully: getting the right investors is crucial as “you will effectively be marrying them”. Made.com had the luxury of choosing its investors – they’re entrepreneurs who are using their success to put money back into that ecosystem. “There is a chicken and egg problem that comes with starting a company – you need the first boost”. And for Li, that boost came from Brent Hoberman, founder of lastminute.com. “He told me to settle in the UK, where he would help me launch a new business idea.”
Ning Li has one guilty pleasure: old scooters and bicycles. “I like those objects because in the 60s and 70s, people thought of design in a different way”. He often laments that cars, bikes, scooters – even houses – don’t look as “nice” anymore. But Li is chief executive of a thriving business (that hires an astonishing one to two new people every week). He knows that, whereas in those decades design was driven by aesthetics rather than cost, nowadays our consumer society puts added pressure on designers, with cost as the main driver.
CV NING LI
Company Name: Made.com
Founded: 2010
Number of staff: 80
Title: Chief executive
Age: 30
Born: Southern China
Lives: London
Studied: Management at HEC Paris
Drinking: Green tea or espresso
Reading: The Seventh Cross, by Anna Seghers
Favourite Business Book: Napoleon, by Max Gallo
Talents: (Obsessive) attention to detail
Heroes: Richard Branson, Marc Simoncini (the French internet entrepreneur)
Motto: “You will never know unless you try. The worst case scenario is that you fail and know it didn’t work out but at least you won’t have regret in 10 years’ time. Regret is a terrible feeling”
Awards: The Daily Telegraph’s Winner of Start-up 100, Growing Business’s Young Gun 2011, The Independent Top 50 Best Furniture shops, Winner of the Online Retail Award 2012