- Tech & Gadgets
- BRW. lounge
Published 05 July 2012 05:06, Updated 05 July 2012 06:18
There’s money to be made from Chinese knockoffs as Milan Direct, which sells replica furniture made in China online, has discovered. It has more than doubled its turnover this year from $5 million to $12 million and with a planned expansion into mainland Europe, the United States and Asia, it expects that figure to rise to $50 million in three years.
While it already ships to continental European via its UK portal, it will soon open a base on the continent to ship more quickly and cheaply to customers in countries such as Germany, France and Italy. Milan Direct sells furniture, such as copies of Isamu Noguchi’s distinctive 1944 coffee table, for up to 60 per cent of the cost of rivals. As it grows, the company plans to stick to the low-cost model that means it has no staff in any country other than its home base. It uses contractors for all other tasks.
Milan Direct’s story, founded in 2007 by Dean Ramler and partner Ruslan Kogan, and which debuted on BRW’s Fast Starters list in 2010, shows that even small companies can compete globally thanks to low-cost labour and internet-based communications. But how much more can it expand while keeping the tight rein on costs that it has shown to date? “The next five years is about replicating the success we’ve had in the Australian market,” chief executive Ramler says. “We’ll never have staff on the ground. We’ll always operate from here because the internet allows us to provide 24/7 customer support.”
Milan Direct’s business model revolves around selling with as little direct contact with customers as possible. It offers phone support in Australia and 24/7 support by email. While customers typically want to touch furniture before buying, the company gets around that by offering detailed images, video and 360-degree views. Such innovations seem to be working. Still, expansion into non-English-speaking countries will put its low-cost service model to the test.
Ramler says online translator tools already change its English ads into local languages. In addition, he says there are enough customers willing to do business in English. There is another tactic. “With the new website, we eliminate all the customer service,” he says. “There’s no need for a conversation if the information is on the site.”
It remains to be seen if Ramler can stick to his plan as Milan Direct sets out to conquer the world. “Asia’s exciting,” he says. “It’s great at exporting but not good at selling domestically.”