Commerce furniture maker Nova Lifestyle Inc. is leaning on Chinese e-commerce giant Alibaba Group Holding Ltd. to reach online shoppers in China – but it’s also working on a plan to compete with Alibaba.
Nova recently created furniture brand Who Zhi Bao, which is sold only in China through Alibaba-operated online marketplace TMall and Alibaba competitor JD.com. Sales of Who Zhi Bao have helped Nova boost its online sales over the past few months.
Nova reported last week that online sales in July and August were twice the level for the quarter ended June 30. It did not report specific figures and executives did not return calls for comment.
But as it racks up sales through Alibaba, Nova is also creating an online furniture-shopping platform of its own. In a Securities and Exchange Commission filing last month, Nova reported that it expects to spend $1.3 million on designing an e-commerce platform, website and mobile application.
And it doesn’t plan on just selling its own sofas, beds and office furniture: The company said 100 other furniture makers have said they want to offer their products on Nova’s platform as well.
The website and mobile app are set to go live later this year, and will only target Chinese consumers, according to a Nova press release. (Though Nova is headquartered in Commerce and trades on the Nasdaq exchange, most of its manufacturing operations are in China.)
In that release, Nova President Tawny Lam said the company wants to become “a one-stop furniture and home furnishings shopping destination for consumers in China.”
There’s plenty of opportunity as China is the world’s second-largest e-commerce market; the United States is first. But that’s thanks largely to Alibaba, which accounts for roughly 80 percent of China’s online sales.
Nova’s online push follows a slip in its Chinese sales. The company reported its sales in the market fell nearly 7 percent last year compared with the year before. Likely because of more online sales, Nova’s Chinese sales have bounced back. The company reported sales in China of about $8 million for the quarter ended June 30, a 5 percent increase over the same period a year ago.
In partnering with Alibaba, at least for now, the company could be trying to build up its Who Zhi Bao brand before it launches its own platform. In SEC filings, Alibaba said, “International brands that set up storefronts on TMall Global benefit from the exposure to the hundreds of millions of visitors … enabling them to establish their brand awareness in China.”
Nova has other brands in China, sold through wholesalers and its own franchise stores, but the company sells much of its furniture under other companies’ brands. The company has a long-term supply arrangement with Swedish furniture giant IKEA, the world’s leading home furnishings company. In 2011, Nova completed construction on a Chinese factory where it makes IKEA goods.
