A year ago, MadeiraMadeira became the 16th Brazilian unicorn, surpassing the US$ 1 billion valuation with a US$ 190 million contribution led by SoftBank and Dynamo funds. Since then, his business has taken a turn. During this period, the classic marketplace model was left behind with the consolidation of a network with more than 110 stores and the structuring of an innovation center, both focused on the private label. Together, they received investments of R$ 100 million. The changes place the startup as one of the leaders in the race to become a kind of Brazilian version of Ikea – a Swedish brand that is a global reference in the segment – and to double its share (today 20%) in the furniture sector, which is still quite high. pulverized and little digitized, with 90% of sales in the physical world. In this dispute, the company shares the ambition with Mobly, another digital native that went offline in search of driving the leap in the market.
Daniel Scandian, CEO and co-founder of MadeiraMadeira, says that the company born in Paraná brought part of the Scandinavian team to Brazil and understood the dynamics of Ikea, but the particularities of the national industry would make the production process more time-consuming and costly here. “We understand that we would not be able to grow more than ten times, as we want,” he said. MadeiraMadeira is among the ten most quoted startups by analysts to go public in 2022, something that competitor Mobly did a year ago. The performance, however, did not correspond, making the company one of the small caps that have suffered the most in the financial market – the shares were priced at R$21.00 at the IPO and closed at R$6.35 on Tuesday (8 ).
Despite the negative outlook for consumption in the country, Scandian believes that this year will be better than 2021 for the operation. “With the consumer more price-sensitive, e-commerce becomes more attractive,” he said. It is with this expectation that the company wants to accelerate transactions on its virtual platforms – the physical store network would be an extension of digital and the showcase of its own brand for a customer who is not yet on the network. The CEO recalls, however, that there is a ceiling for increasing the share of online and that, by the end of the year, this share will reach a maximum of 12%.
100 million reais to consolidate the physical network with 110 stores in the country and a technology center in Curitiba, Paraná
Expanding the product portfolio was the key for the startup to enter physical retail. The expansion strategy started with logistics, with 16 distribution points in Brazil. According to Scandian, it was the first issue that MadeiraMadeira needed to address, after a failure in the delivery operation during Black Friday 2018 caused chaos and more than 30,000 orders were lost. “Today, 70% of the logistics operation is owned, and we should reach 85% this year.” To maintain the pace of business growth of 70% per year, the next step will be to reduce the production time of furniture, which could drop from six months to one month with the new technology center. “This process makes us a kind of Ikea fast fashion”, said the executive.
20% market share in furniture and decoration e-commerce in the country. the company wants to double its share in the sector
DISPUTE Already Ikea, which, in 2020, had postponed its plans to enter South America with the opening of a store in Santiago, Chile, to this year, has not brought further news so far. In the uncertainty of the Swedish, both MadeiraMadeira and Mobly project international expansion in the medium term. What holds Brazilian women today, in addition to economic instability, is the avenue for growth within the country. In the case of Paraná, the Northeast region will be the focus. “It’s a market that is still poorly represented in our operation,” said Daniel Scandian. For this spurt, the startup is eyeing acquisitions of companies within the segment itself, an operation that should be consolidated in 2022.
70% of the company’s logistics operation is owned, and the projection is to reach 85% by the end of this year to support demand
In addition, another decisive part of the strategy is the private brands, the company’s bet to differentiate itself in the competitive furniture sector. To increase sales of exclusive lines from 25% to 60% of revenues, the company invested in design innovation, raw materials and even coupled technologies, such as the sofa with USB port. “With this product engineering, we were able to democratize pieces of a superior category”, said the CEO.
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