Freeman Cebu Business

Rent-to-own furniture

FULL DISCLOSURE - Fidel O. Abalos - The Freeman

Undeniably, as the pandemic continues to curtail our freedom, our economy continues to contract. Though Cebu has moved on, albeit, cautiously, the fact remains that our best efforts at this time are not enough. 

To recall, before COVID-19 wrought havoc, Cebu’s economy was driven largely by tourism, business process outsourcing (BPO) and export. If you are keen enough, you would notice that these are foreign-money driven. Tourism largely depends on foreign tourists’ spending. Obviously, BPOs and exports cater to foreign companies’ or individuals’ needs. While tourism and BPO industries sustained us then, exports of goods where most skilled workers largely depended on remained undesirable.  Particularly, the furniture industry. The local construction boom though saved them a bit.

The question is, will this prevail when the pandemic is over? As soon as we can redeem our lives, yes, obviously, plus a good prospect for the furniture industry.    

For one, the USA remains a good market. With their lives going back to normal, the economy is alive again. World economists may have differed in its forecasts but all of these are pointing to upward trajectories. Moving forward, the Conference Board (a non-profit business membership and research group) forecasts that “US Real GDP growth will rise to 9.0 percent (annualized rate) in Q2 2021 and 6.6 percent (year-over-year) in 2021.” Following solid economic growth in Q1 2021, it expects the recovery to continue through the remainder of the year. 

This very encouraging information is so relevant to our furniture exporters. This means a rise in employment. Consequently, a rise in “housing starts” in the USA. As we track and analyze the rise of “housing starts” as well as “new home sales” in the USA, we must be aware that there are many industries whose fates are tied to residential construction. Apart from the easily identifiable construction materials like lumber, cement, roofing materials, etc., the furniture industry is among those directly affected by its movements. Why? Owners buy furniture once their houses are finished.

That is why, according to Statista (a German company specializing in market and consumer data), “furniture and home furnishing sales is expected to top 14 percent of total retail e-commerce sales in the United States by 2022.” Revenue for this category was “US$65.12 billion in 2018 and is forecasted to reach nearly US$100 billion by 2022”, it added.

However, knowing the market is one and easy but reaching it out is always a great challenge. It is a given that e-commerce dominates now. And there is one concept that is able to find its niche, Oliver Space. This California, USA-based start-up is leveraging technology to give buyers convenience and flexibility in owning furniture.   

Its platform isn’t difficult to use at all. Using its platform, customers can find curated furniture (sourced direct from the manufacturer) that they can rent on a monthly basis with flexible ownership options. Then, they can use “Room Builder” to view pieces together or start a live chat with Oliver Space for room ideas. Then, they choose between short-term, long-term or upfront plans, all with no interest. Then, they can pick a white-glove delivery date for as soon as three days in advance. Once they have the items and see how they work in their space, they can swap them, schedule a pickup or keep the favorites. More importantly, all payments go toward ownership. In simple terms, it is rent-to-own.

With its platform in place, in the past year, Oliver Space grew 500 percent in monthly revenue and 800 percent in monthly order volume. 

There are three very important takes from these developments. First, that there is a huge market for furniture. Secondly, that our entrepreneurs (whether furniture manufacturers or traders) must embrace technology if they will try to tap this huge market. Finally, that terms must be must be convenient and flexible for prospective buyers. 

To tap a huge market in the USA, our exporters do have good connections with importers already. Therefore, that should not be difficult.  One thing that we must not miss, however, is the fact that condominiums, subdivisions and office buildings are also sprouting in our midst. Don’t you think these potential customers need a good platform to visit when they decide to buy some good pieces?   They do.


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