A bedding startup out to pop the price bubble
[THE INVESTOR] Entrepreneurs quite often begin their own business to solve problems they face. For Jay Gye, a former marketing expert who founded online bedding brand Saturday Mornings, it was the frustration he experienced when selecting a bedding product for his best friend’s wedding gift.
Gye was surprised by how expensive bedding products were in Korea, and mused over whether they were actually worth what they cost. “I liked a bedding that cost 800,000 won (US$751) but it didn‘t feel too different from much cheaper beddings I bought in the US,” Gye told The Investor in a recent interview.
Saturday Mornings founder Jay Gye.
He knew a price bubble was real, at least in the furniture industry where he was working, and thought the bedding market might have a similar problem.
“I wanted to do exactly the opposite of what bedding brands were doing, which was selling expensive products, give out insufficient information and engage in mediocre branding,” Gye said. “So I decided to provide great bedding at a reasonable price and be completely honest about the production and distribution process.”
His target consumer was millennials, who were interested in a good night’s sleep, and were fed up with the conventional players.
Korea’s bedding market was estimated to be worth 1.5 trillion won in 2016. Traditional brands like Evezary and Allerman which recorded 100 billion won in sales each, are leading the market. “These traditional brands are launching sub-brands targeting young customers, but it’s not enough to attract price-and-design-conscious young customers,” according to Gye.
The CEO was inspired by the success of US-based online bedding companies like Brooklinen, which recorded US$20 million in sales and tucked in US$10 million won in series A funding in March 2017.
Saturday Mornings also adopts direct-to-customer business by cutting out the middlemen, wholesales and storefronts. “We also come clean with the production and distribution process, as well as our margins,” Gye said. “For instance, a goosedown duvet usually starts at 500,000 won at other stores, but our product is priced at 390,000 won.”
He said he gained the confidence of selling products online only after the crowdfunding campaign at Wadiz, which brought in more than 109 first customers in November.
“I realized that customers don‘t necessarily think that they have to see it or feel it in person before buying a bedding product anymore,” Gye said.
The following is an excerpt from the interview:
The Investor: Could you introduce Saturday Mornings?
Gye: Saturday Mornings is an online bedding brand of Twin Peaks Co. We aim to provide high-quality bedding products at reasonable prices. I launched the brand in April and began producing products after raising funds via Wadiz, a crowdfunding platform.
Our motto is “Less is better.” For instance, we want to provide simple designs and we want to have less secrets about our products.
TI: Why a bedding company?
Gye: I bought a set of linen bedding in the US for about US$350 and I felt so great the next morning and even for a month. I decided to give a great bedding product to my best friend who was getting married. But I was really surprised they are so expensive in Korea. One I liked the most was about 800,000 won. At that time I was working for a furniture company where I learned price bubbles partly due to complex distribution channels. I thought the bedding market is probably having the same problem.
And then I learned about US startups like Brooklinen. Their success inspired me to begin my own bedding product company.
TI: What kind markets are you targeting?
Gye: There’s a growing need from millennials, who have emerged as a new purchasing power. But those domestic and imported brands you find are too expensive to attract millennials. IKEA and Muji are trying to entice them and traditional brands are launching sub-brands targeting young customers but I don’t think that’s enough for millennials. They have high price tags and more importantly, they don’t give enough information about their products.
TI: How are you going to attract millennials?
Gye: Communication and transparency. We produce linen products at a Chinese factory and goose down products in Canada. And we deliver them directly to customers without middlemen, wholesales and storefronts. We also unveil our production and distribution processes as well as our margins.
A lot of brands do not explain about products, and quite often the information they provide is inaccurate.
TI: Why did you choose a crowdfunding platform to introduce your product?
Gye: I used a crowdfunding platform to see whether or not online-only marketing would work. We raised 417 million won which was more than 834 percent of our target. A total of 109 people invested in the Saturday Mornings project. I was able to verify that millennials are indeed interested in quality bedding products. The majority of funders are those in their 30s -- both single and newly-weds. With those funds, I was able to make prototypes and send them first products and also receive feedback from them. I called every single person who participated in the funding project and promised to deliver good products.
TI: What did you learn from the crowdfunding experience?
Gye: I learned that customers’ purchasing patterns have changed a lot. For customers’ point of view, it’s a challenge to purchase online a brand that they have never seen or a product without a single review. But I realized that they don‘t necessarily think that they have to see it or feel it in person before buying a bedding product anymore.
TI: What‘s your future plan?
Gye: I want to grow with our main customers -- millennials. They care about the quality of sleep and good rest. And I want to provide great bedding products for them. When they make a family and have children, I want to provide products they need. So I will diversify product lines. As this trend of increasing interest in good sleep and rest is expected to spread to the Chinese and Southeast Asian markets, I also want to expand to those markets.
I will consider raising funds later this year but I want to focus on building our brand first.
By Park Ga-young (firstname.lastname@example.org)