The production and delivery of upholstered furniture to customers in volumes that are of commercial interest to NOOM has long been far from a garage business, but a full-fledged factory business with specific logistics. Part of the company's production facilities were located in Kharkiv, they had to be moved, and the managers had to build communications with partners and contractors in a new way.
As part of the "Business Diaspora: Stories of Ukrainian Expansion" project, designer and co-founder of NOOM Kateryna Sokolova shares her experience with PRAGMATIKA.MEDIA readers, talks about the cultural and commercial features of the foreign market and the evolution of the brand in wartime conditions.
PRAGMATIKA.MEDIA: When you and Arkady Vartanov created your company in 2017, were you immediately focused on activities in foreign markets? Why did the idea of working on the foreign market arise in the first place? Maturity of Ukrainian design or shortcomings of the domestic market?
Kateryna Sokolova: Yes, from the beginning of the company's foundation, we were focused on working in foreign markets. We wanted to bring our design and products to an international audience. To appear in the interiors of famous European designers. And so it happened.
But this path can be called a completely natural vector of development. Until 2017, I had already been working internationally as a designer for European furniture factories, Ligne Roset, Roche Bobois and other brands. I worked for the French company Jarre Technologies for almost 7 years. Therefore, for me, entering foreign markets and exporting products is a completely normal evolution of the brand. Rather, it is unclear to me if the brand focuses exclusively on the domestic market. There are, of course, local companies, but a furniture brand cannot be limited only to the national consumer.
Our sales now show that 95% of our products are exported. A few years ago, there was no demand for Ukrainian-made designer furniture in Ukraine at all, the market appeared when Ukrainian architects began to use them in their interiors. But even today, domestic deliveries are a maximum of 5% of our turnover.
In the near future plans for the development of the brand, increasing the popularity of the brand in Ukraine, as well as further strengthening the presence in Europe and America. We strive to expand relations with partners, attract new customers and promote our furniture in all markets of the world. Now we have official dealers in 31 countries, and customers in 46 countries of the world.
PM: We know that you and your employees are currently working from different parts of Ukraine, some may be from abroad. Can you talk about the technical and personal aspects of relocation?
K. S.: The war greatly affected our work. We did not change the brand or products, but we were forced to adapt approaches and strategies, find new ways of logistics, convince customers that cooperation with Ukrainians is possible and necessary. We have adapted to changes in demand and market conditions, yes, we have sought and continue to seek new ways to export and cooperate with partners abroad, because it is a never-ending process. Also, we began to receive many more requests from Ukrainians: everyone wants to support national brands.
From the very beginning of the creation of NOOM, we have experience of remote work, moreover, we can say that remote production management is sometimes more profitable than actual production. Therefore, at the time of the full-scale invasion, we already had substantial experience in remote communication.
All our production facilities remained in Ukraine. In the winter and spring of 2022, when no one knew what would happen the next day, we were probing the market, looking for European contractors to hedge if the situation worsened. Our own metal workshop was located in Kharkiv, we moved it completely to Lutsk. Then our large contractor from Kharkiv also moved his business to Lutsk. And the main contractor for the production of upholstered furniture is located in Kyiv. Already a month after the start of the full-scale invasion, they resumed work at our request. Yes, they too initially made plans for relocation, but after the deoccupation of the Kyiv region, such a need disappeared. For the first six months, the factory worked only for us, there were no more orders, but later it resumed work in full.
We can say that we are back in business already a month after the start of the large-scale invasion
The first weeks, of course, like everyone, were in shock, trying to understand how to fulfill the obligations regarding the order in the conditions of active hostilities. This is an unprecedented situation, of course.
In the spring of 2022, it was not that our partners did not trust our brand, rather, they doubted that we would be able to work at all under conditions of force majeure: shelling, power outages, constant stress. And, of course, they were afraid of losing their money, because we work on a prepaid basis. There were also problems with delivery. In the first months, all logistics companies with which we worked before stopped transportation. "Nova Poshta" saved us a lot, although now we do not use its services for export. In the corporate segment, they turned out to be more expensive than the services of European carriers, which resumed their work. Currently, we send goods to the USA and Asia by DHL, to Europe by DB Schenker.
With some of our customers who are particularly worried about the possible risks, we have switched to new terms: payment before shipment. That is, we place the order with the contractors at our own expense, and the partner pays for it immediately before the shipment of the goods. But such cooperation is possible only with reliable partners with whom we have been working for many years in a row and between us there is an established relationship of trust.
Participating in Milan Design Week last year helped a lot psychologically. We went to the Superstudio Più location with the Puriosity exhibition, arrived, personally communicated with partners to show that we are alive, working, able to fulfill orders, ship products. From the side of the Europeans, they saw strong support, admiration for our resilience, the fact that we work despite extreme circumstances. For them, it was really a discovery of Ukraine from a new side. After our participation in the Milan exhibition, we began to receive new orders, and we gradually returned to the pre-war rhythm of work.
PM: This year you also participated in exhibitions. How do you feel? Can you also share your observations about the peculiarities of exhibition activity and representation in Europe and America?
K. S.: In America, we do not yet have the experience of presenting our products at professional specialized exhibitions. In Europe, we often participate in Maison & Objet, and this year in iSaloni. These exhibitions are important events for the presentation of our furniture collections. They bring together influential designers, dealers, agents and other professionals and clients from around the world and serve as a platform to make new contacts, establish partnerships and network with industry specialists.
One of the key features of the exhibition activity in Europe for NOOM is the importance of the approach to the representation of our brand. The main goal is that the exhibition reflects our philosophy "between art and design" and style. We try to create an attractive and spacious environment that clearly emphasizes the uniqueness and aesthetics of our items.
PM: iSaloni is always the widest representation: hundreds of designers, dozens of famous design schools. Against this background, what did the Ukrainians look like in April 2023?
K. S.: This exhibition was very successful for us. I would even say that it is the most effective in our entire exhibition history. We participated in iSaloni for the first time, but in terms of the number of contacts and negotiations, it exceeded all my wildest expectations. Many visitors from all over the world. And, of course, the Ukrainian pavilion attracted general attention. We had a joint stand of Ukrainian companies, where 7 brands were presented in a common concept. My colleagues and I worked on this stand for a very long time, and everyone invested intellectually, emotionally, and financially. Although iSaloni provided us with a stand for free. For which we are very grateful!
Many visitors were surprised that during the war Ukrainian manufacturers were working at all, and, of course, were surprised by the quality of our exhibits, the quality of design
Some people did not even know that NOOM is a Ukrainian brand, they thought it was Italian or Scandinavian.
PM: What exactly did visitors respond to, what attracted them — the concept, aesthetics, performance technique?
K. S.: Within the framework of one platform, we sought to create a mini-interior for each of the brands, we selected a color scheme so that the items were combined with each other. In the NOOM mini-interior, we displayed the Gropius chairs, our bestseller, to create a recognizable effect. It worked - people would come up and say, "Oh, those are the same chairs, I've seen them!". We also presented our new product, the Flock chair with rounded shapes. And they also received excellent feedback on it. It is nice to realize that many people are familiar with our products and single them out among many designer items.
We had many promising contacts with potential customers, in particular with representatives of showrooms and dealers. We held high-quality B2B meetings that really affect sales. iSaloni is an exhibition really focused on business sales, and that's exactly what we need right now.
PM: How is the European and US market fundamentally different from the Ukrainian one? What differences in the behavior of customers, customers could you point out? How deep are the market's cultural differences?
K. S.: There are features, but they are not so big today. We live in such a globalized and multicultural world that there is no gap between the Ukrainian market and the Western one. At least I don't feel it. In addition, in some fields, Ukrainians are not outsiders, but forwards. For example, Polish and Romanian architects came to our stand in Milan and told us that they admire the work of Ukrainians, their interiors and are inspired by their ideas. And, unequivocally, everyone is impressed by the work of our visualizers — they are the best in the world. There is simply no such quality of visualizations in the West.
Another example: Ukraine has a huge number of designer cafes and restaurants. We really want to surprise our customers. In Europe, the interior design of HORECA is somewhat simpler: for them, a restaurant is, first of all, tasty, high-quality cuisine. And for us, it is also entertainment, an opportunity for self-presentation and excellent service.
PM: How many differences are there in the legal framework? What bureaucratic complications should Ukrainians who would like to export their brand be prepared for?
K. S.: The market of Europe and the USA differs from the Ukrainian market on several levels. The behavior of clients and customers can be more transparent, demanding and quality-oriented.
Although according to feelings, Ukrainian clients are much more demanding than foreigners. Oddly enough, it is always much more difficult for us to work with compatriots. Although, it would seem, we communicate in the same language, we have a common mentality, but this is a paradox. In Europe and the USA, everything is much simpler in terms of interaction with showrooms and business. If there is enough for the sale of the invoice, then in Ukraine the deal is impossible without thick contracts, which are calculated by the legal departments of companies, sometimes for 3 months and take a long time to be approved. There is nothing like that abroad. Much more mutual trust.
Even if it is about the construction of a hotel and the purchase of a large amount of furniture, no heavy contracts are concluded
The company simply pays according to the invoice — that's all. Even with the most prestigious and expensive showrooms in Europe, it is much easier to cooperate than with Kyiv clients.
In Europe and the USA, certain certificates are required that confirm the quality and compliance of products with safety standards and environmental regulations. For example, CE (Europe) or UL (USA) certification is distributed to lighting equipment.
Our company received CE — a certificate of conformity for all types of lamps that we manufacture. This is important for sales in contract projects. We also work with certified fire-resistant fabrics from European suppliers and use non-flammable foam in upholstered furniture, thanks to which our products can be used in projects of hotels, restaurants, offices, etc. It is absolutely impossible to put anything on the UK market without these certificates. But it is allowed to certify not the final product, but to use already certified materials and components. There is no need to issue a separate certificate for a specific series of furniture.
There is nothing complicated in the process of obtaining certificates. Yes, there is a certain bureaucracy, but if there is a desire, then it is quite possible to get them. This is, of course, not a cheap procedure, but it pays for itself if the company wants to cooperate with large customers: hotels or restaurants.
PM: Trends and trends in design can also have differences? How are the requests and tastes of Ukrainian and Western customers different?
K. S.: If we talk about tastes and trends, then I can say that gallery design is in trend in America now, exclusive gallery things are in demand. Of course, this does not cancel the market of mass products for the general consumer. But if we are talking about designer interiors, then they must have an accent: some kind of expensive, gallery thing. The fashion for exclusives is clearly visible. The situation is the same in Europe. In Ukraine, I will repeat, the demand for the products of Ukrainian designers has increased, and it is felt. This is a kind of manifestation of moral support, a desire to develop our Ukrainian design. But still, Ukrainians still gravitate more toward standard, "polyform" interiors, as I call them. They do not seek to build a space with an emphasis on original objects.
For a European, it is very important to create a mix of antiques and modern design items or to emphasize the historical features of an old building with modern furniture. They strive to demonstrate that things and interiors in general have history, concept, depth.
PM: And yet there are not so many stories of successful expansion of Ukrainian companies. What mistakes might Ukrainian companies make when opening business abroad?
K. S.: In our opinion, the most common mistake that brands make is insufficient preparation: it is important to study in detail the specifics of the market in which you plan to operate. If you have thoroughly studied your client in Ukraine and then try to find the same clients abroad, it does not work like that. Even each subject can have a different audience.
Before entering a particular market, it is important to study local communication channels in detail and find the right brand positioning or focus on global trends in order to be understood in many markets. There may also be issues with standards and certification. But the very fear of going beyond the limits is nonsense, some deeply flawed post-Soviet practice. Perhaps the reason lies in the complexes and lack of information about how the world market works. In fact, everything is not so difficult.