Last year, Mobexpert saw a 12 percent year-on-year growth of its turnover, and online sales increase by 50 percent. With an eye on technology, Dan Sucu, the owner of the business thinks that the biggest growth potential of his business in the upcoming years will come from online expansion to other markets.
For over two decades at the helm of a business that has evolved into one of the easy recognisable Romanian brands, Mobexpert, CEO Dan Sucu has seen the sector transform and evolve alongside the local retail market. According to Sucu, the solid presence of Mobexpert was built on a long-term commitment to being a reliable and respectable brand. “In the early days, these were not values associated with making business. Reliability was a factor of competitive advantage. Meanwhile, only businesses that professed this are left on the market. That is why, today the main differentiator is the product. Everything else starts from here and the desire to showcase the very best products in our field. When you have the right collection, things go well.”
The profile of the Mobexpert customer is quite varied, the entrepreneur explains, stressing that knowing one’s client is paramount. “Given that our products are mid-range and sometimes above that, our clients are successful people who make things happen”, Sucu says. At Mobexpert, the process of setting up the collection of products involves two steps. “Twenty of our colleagues travel constantly to attend all furniture fairs happening everywhere in the world. I personally do the same. I spend over 300 hours per year flying to global destinations to see what is trending. This is vital, but not sufficient. Through our program, RVP, we aim to ‘recover lost sales’ by monitoring in stores what is currently missing, by hearing directly from our clients. This is not a one-way communication, the client can send feedback to the designer and the store will also communicate with the client to present them with what they need”, Dan Sucu explains.
“I am 95 percent involved in curating the Mobexpert collection”
Over 50 percent of the products sold in Mobexpert’s national network of stores are produced in the company’s own factories. In creating them, designers take into account the market’s and clients’ requests. “There are areas where we don’t want our products to overlap with those produced by unchallenged leaders, because their products are highly competitive, and we want to give our clients the best offers. So, provided that we can become competitive, we develop our own products. The market leaders, regardless of where they come from, are well known by us as well as by our customers, it’s impossible not to.”
Curating work is done by our experts, who have more than 10 years of experience and a very narrow field of expertise, Sucu says. “Myself, I am still 95 percent involved in everything that has to do with setting up our collection. Our promise is that we will not bring to our clients something we haven’t fallen in love with”
Focus on building a strong collection for apartments
In the past three years, the clients’ interest has shifted from houses to apartments. That is why the focus moved to putting together a better collection for apartments. “There is a big interest among our customers in living not in a house, but in an apartment. They prefer to live closer to the city centre, in spaces that are smaller than those offered by houses, which are well organised in terms of functions. And obviously, furnishing such spaces is a challenge we and our designers want to raise up to.”
The main collection, therefore, includes a lot of furniture for apartments. “We have a collection that answers the need for complex functionalities, that can allow people to have a comfortable life in a smaller space. This trend is visible in the big cities and we are adapting our offer to it better and better.”
Keeping an eye on the North American market
“Being obsessed with this business, during my travels I find answers to questions I didn’t know I had”, says Sucu, who is preparing to attend a fair in Poland right after the interview. “It is easy to find answers, because it is one of the most beautiful fields of work.”
“There were years when a visit to Budapest was a must every month,” Sucu recalls. The Hungarian market was ahead of ours by 10 years, but now the gap has closed. Today, if I want to go somewhere and see something new I go to the US. There is still a difference between western European markets and the American market, but the clients are contributing to the narrowing of the gap. They use the same information, services, and they expect the same price. That is why we must keep up.”
What sets the US market apart is a culture centred around the needs of the customer, Sucu explains. “There, respect for the customer is one generation ahead. Their ability to place the customers’ need first is the norm. When producing for the US market, everyone goes one step ahead, and builds some special features or wraps the product in very good packaging, for instance. Client demand is increasing in Europe as well, and we understand that a process that was good yesterday must be revisited tomorrow.”
Client demand, Sucu argues, is driven by the growth of e-commerce. This makes the context that surrounds the product a crucial part of its success, on a market where only good products strive.
Online expansion makes tapping into new markets easier
Mobexpert’s year-on-year growth of online sales has been significant, standing at 50 percent. “We see enormous potential for growth here. It is one of our priorities and there is no reason to see it slow down. Experience has shown that growth in the offline is limited. The collections presented in stores are curated while taking into account the space available. When this limitation disappears, the potential is endless.”
“We follow closely the model of other global retailers whose online sales represent 50 percent of the total,” Sucu says, adding that expansion to other neighbouring markets could come rather online than offline. “yes, we are considering expanding to the regional market, to the neighbouring countries. The logistic demands are complex, and we are currently sorting that out. Another challenge is to adapt to markets where the buying power is smaller and are facing companies that, due to being active on complicated climates, are very competitive,” Sucu explains.
Consistent investment offline
However, Mobexpert is planning a consistent investment in its offline business. Plans include the opening of a new store every year, using up to EUR 10 million for the investment. Investments in the factories as well as product quality take up most of the company’s investment, while the logistics side of the business will receive in the near future up to EUR 4 million.
Biggest disruption is sophisticated customer demand
According to Sucu, the biggest disruption in the sector is customer demand. “Today, clients engage with businesses in their own terms.They are those who decide when they want to engage with you and they are increasingly demanding. Therefore, the biggest disruptor is a positive factor. The industrial age is long dead, so the time when the producer was the one to decide things is behind us. In the past, producers decided when their product was good enough. Today, knowledge of the client is crucial for producers, because they are the most important factor,” says Sucu.
“Will there be an Uber in our sector? Perhaps. I already saw there is a startup out there, a platform where you can find people who can assemble your furniture. Or perhaps there will be an Uber for deliveries. Or, perhaps, if customers get together they can negotiate with producers better deals for them and this can be a disrupting factor. What is certain is that today the distances between the producers and customers are shortened. In any case, I do not expect businesses to look the way they do today in 20 years’ time. Or even in the next 5 years.”