New Market Led by Small Businesses: 'Custom-Made Furniture' Emerges

Nexis, Kitchenrino, Beka, Wasello, Rube, and Others: The Comeback of Struggling SMEs During COVID-19
"Fierce Competition to Catch Korea's Top 0.1% Wealthiest"

"I want furniture that only I can have, furniture that I want to show off."

High-end imported furniture and custom-made furniture catering to the top 0.1% wealthiest customers in South Korea have established themselves as a new trend in the furniture market.

Premium kitchen brand KitchenLino featured in director Bong Joon-ho's film "Parasite."
[Photo by KitchenLino]

The companies leading this trend are small and medium-sized furniture firms such as Nexis Design Group, Kitchen Reno, Wasello Korea, Beka Korea, and Rube Korea, rather than traditional major brands like Hanssem, Hyundai Livart, and LX Hausys.

Most of these companies were relatively unknown and struggled in the niche left by large brands enjoying a COVID-19 boom in interior and remodeling over the past 3 to 4 years, making their rise a remarkable turnaround story.

According to the furniture industry on the 23rd, after COVID-19 began spreading in 2020, while large brands focused on mid-range interior and remodeling projects, small and medium-sized companies sought breakthroughs by targeting ultra-high-end imported furniture and custom-made furniture for the wealthiest clients who are not constrained by budget.

They partner with renowned overseas furniture brands from Germany, Italy, Belgium, Spain, Austria, and others to offer furniture tailored to customers' tastes, with a system where designers and customers collaboratively design and produce the interiors.

The installation cost for custom furniture varies widely, ranging from a minimum of 100 million KRW to a maximum of 1.2 billion KRW per set, with some customers placing no upper limit on the price. Over 97% of the materials and furniture are imported, and the main clientele consists of private homes in Seoul’s Gangnam area and townhouses in the metropolitan area. The industry estimates the custom furniture market size at 2.3 trillion KRW annually. While the average interior cost per house for kitchen furniture is 22 million KRW for new constructions and 33 million KRW for existing homes, these custom pieces can cost from 4 to 36 times more, but customers do not hesitate to invest in "furniture made just for themselves."

Nexis Design Group is a representative company leading this new trend. Nexis Design Group began its business 54 years ago by supplying kitchen furniture to Korea Housing Corporation (now LH) in 1970 and has been a mid-sized company supporting the domestic furniture industry ever since. In April, it opened Emporium Seoul (Gallery) in Seocho-dong, Seoul. Using an entire 12-story building as a showroom exhibiting the finest Italian furniture, it has shifted from mainly supplying construction companies (B2B) to actively pursuing B2C business targeting general customers.

Choi Min-ho, chairman of Nexis Design Group, said, "Small businesses struggling to survive during the COVID-19 period found a breakthrough through high-end imported and custom-made furniture," adding, "In the custom furniture market, small and medium-sized companies, including Nexis Design Group, which have customized design systems, have an advantage over large brands geared toward mass production systems."

Due to the nature of custom-made furniture tailored to customers, large companies are at a disadvantage because their processes are divided into specialized tasks, preventing one person from handling multiple steps, and their manufacturing lines are automated. In contrast, small and medium-sized companies have technicians capable of multi-functional and multi-process work, allowing them to produce and manufacture individual orders immediately, making the market environment more favorable, according to Chairman Choi.

Premium kitchen furniture brand Kitchen Reno, which gained attention after appearing in director Bong Joon-ho’s film "Parasite," Beka Korea and Wasello Korea, which have produced custom furniture for celebrities and famous figures in the luxury custom furniture sector, and Rube Korea, which designs furniture collaboratively with customers and designers and orders finished products from Italian factories for delivery and installation, have also secured a large core customer base.

As the performance of small and medium-sized companies stands out, it is reported that large brands equipped with mass automated facilities are also actively pursuing the introduction of custom furniture systems.

An industry insider said, "Some large brands that failed to prepare countermeasures after COVID-19 are reorganizing their systems with custom furniture to enter the market," adding, "Companies focusing on B2B are shifting to B2C, and those focusing on B2C are switching to B2B, attempting business transformation and market diversification, engaging in fierce competition to capture South Korea’s top 0.1% wealthy clients."