Scanteak going beyond teak furniture

Family business building on its brand name to expand in Japan as well as branch out into products such as mattresses and leather furniture

FAMILY businesses with multiple members running the company successfully in Singapore are increasingly rare, but furniture retailer Scanteak seems to be bucking the trend.

One of Singapore's most recognisable brands since 1974, the group is on an upward growth trajectory, expanding aggressively into its newest market, Japan, as well as diversifying from its core strength of teak furniture into businesses such as mattresses and leather furniture.

Today, four members of the family are responsible for steering the company. They are founder and chairman Lim Pok Chin; wife and executive director Catherine Foo, who oversees finance and CSR; and their two eldest children - regional marketing director Jamie Lim; and regional procurement director Julian Lim. (See amendment note.)

Scanteak's three main markets, for now, are Taiwan, Japan and Singapore. The elder Mr Lim takes care of operations in Taiwan, which is listed on the Taipei Exchange; Ms Lim looks after the headquarters in Singapore; while her brother, who is younger, handles operations in Japan.

When asked why only the Taiwan operation is listed, Ms Lim told The Business Times that the group is keeping its options open.

"We believe that if we still want to list (the other parts of their business), we can still do that. We don't need to put all our eggs in one basket," she said.

The business has come a long way since it began, when it was previously known as Hawaii Interior Decoration. With turnover of about S$10 million back in the 1970s, the group now has revenue of about S$100 million as of 2017.

But even though she and her brother were groomed from young to take over the family business, Ms Lim said that making it work did not happen by chance, but by design.

"My parents did a very smart thing by giving us autonomy in different regions," she said, describing it as a "brilliant" move.

She added that her father tends to give them more autonomy to run their own parts of the businesses with little interference as long as they are profitable, allowing them to carry out their vision in their respective territories.

It's been about 13 years since she joined and much has changed.

Then, the business had 20 stores in Singapore and Taiwan. Today, it has 150 stores globally, with plans for more.

Overseas revenue is now a major contributor to the group's coffers, accounting for at least 70 per cent, said Ms Lim.

Some of the latest developments in the past year include expansion in Japan. The group is trying to open two to three stores each year in Japan, a country whose population dwarfs that of Taiwan and Singapore.

"The Japan market is huge - we want to be the biggest in whatever country we go to," she quipped.

"When I first hopped on board, we only had three stores. Today, with my brother's efforts, we have 14." (See amendment note.)

Even though Scanteak has been in Japan since 2006, Ms Lim said that it's "not an easy market" to enter, due to differences in culture.

"A lot of businesses try to go in and they don't fully succeed… We hope to hit a minimum of 100 stores in Japan - it's going a bit slower than expected as it's a tough market. It didn't go as fast as in Taiwan, but we're gaining traction," she said, adding that the business there has grown three to four-fold since five years ago.

Another new development is its e-commerce push late last year in August with the launch of its online channel in Singapore.

But Ms Lim was quick to emphasise that its brick-and-mortar operations remain vital to the business.

"We're just becoming omnichannel, creating more channels for customers to buy. We are going to aggressively push (ahead with e-commerce) to better serve the customers' experience."

She cited examples of local retailers such as Love Bonito and HipVan that went in the other direction - from online to offline - as businesses recognise the need for an omnichannel retail experience for customers.

"It's usually easier for any retail business to start with an online store. It's a lot more challenging for a brick-and-mortar business to start online. This is because a business that has been operating for years has certain systems in place."

She said the company also took its time as it did not want to "jump on the bandwagon with a half-hearted product". It is working towards double-digit growth and to take the business to overseas markets, said Ms Lim.

Other developments include the creation of different brands.

Scanteak may be known for its teak furniture, but the group is also branching out into other areas. ScanKomfort is its new premium mattress brand from Germany, with stores in both Singapore and Taiwan.

Some brands are also currently only in Taiwan: ScanFloor is a wooden flooring brand that is a joint venture, run by a partner in Taiwan where they have five stores, while ScanLiving is a leather furniture brand that provides "affordable comfort and quality for the young working executive".

Ms Lim said the knowledge and know-how, such as R&D, branding, marketing and advertising, are always done in Singapore. But new brands are always launched in Taiwan.

"Rental costs and manpower costs are a lot cheaper, and they have a population five times bigger. So it makes more sense to launch it there, fine-tune it, and then bring to more expensive countries like Singapore and Japan."

Business goals at present are to strengthen current brands. The group is planning to launch the ScanLiving concept in Singapore soon, but is facing some back-end constraints such as already operating at full capacity, said Ms Lim.

As such, it is opening a new warehouse in Johor to support its new brand in Singapore. The warehouse will also boost expansion efforts in Japan and Singapore.

And even though family members might often be in different countries, they make it a point to meet monthly for a few days at least to discuss the business and work things out together. That's not counting special occasions such as birthdays.

She said: "My brother and I are very expressive, very opinionated. But we are very close. Being siblings, we fought growing up - we still fight - but we have always learnt to resolve our differences. We would somehow come to a comfortable compromise."

They also have a younger sister who is still studying. On whether she will join the family firm, Ms Lim said: "At the moment she's focused on completing her degree, so it may be too soon to tell - but she's keeping her options open."

Amendment note: An earlier version of this story inaccurately quoted Ms Lim as saying Scanteak had 40 stores in Japan. It has 14 stores. Also, her job title is also regional marketing director, not regional managing director. The above story has corrected both inaccuracies. We are sorry for the errors.