Troubles are looming over retailers in Singapore as they face fierce competition from e-commerce stores around the region. Sale numbers for retailers during the last 2 Great Singapore Sale has been one of the worst in their history, and the outlook is still as dim as ever.

But not for Dennis Tay, the founder of NAIISE, who has proven to be a fast-rising unicorn in the retail industry. We spoke with him more in-depth to find out how he has scaled from nothing to 5 retail outlets profitably in less than 2 years.

More...

Marcus: Today, I have a very special guest with me. His name is Dannis Tay, he’s the owner of NAIISE. Thanks for doing this interview Dennis.

Dennis Tay: Thank you Marcus for inviting me.

Marcus: Let’s have a brief introduction on how NAIISE was created. How you came to start NAIISE?

Dennis Tay: I started NAIISE basically to help a lot of designers. The designers I saw working on this are all extremely talented. They create award winning products; however, they don’t have an outlet to sell them.

At the same time a lot of these designers told me “ I love to design but I don’t really love to do business.

” I always felt that it’s such a waste because we have amazing people but there’s no avenue for them to showcase what they do. To create a product in the long run can be exportable. At the same time I’m a sucker for design.

I bought every apple product because it really inspired me. I think a lot of designers value not a lot of people can see. In the past designs can be a bit alienating, it tends to be artsy and inaccessible. Prices are always extremely high and consumers never ever tried to venture into that kind of category.

They don’t really ask themselves why is it expensive. It’s expensive because there’s value in it, there are a lot of intangible elements that could inspire you.

It can better your everyday life, it can help you in sustainability. Nice is set up to address these issues. To be able to help them step out of their shell and grow. We work very hard to educate the consumers.

Marcus: In your story, on your previous creative agency, you found out that there were really good designers, they won multiple awards and yet they are afraid to venture into their own business. There was a fear in product designers.

You came and solve this fear in an entrepreneur. You also mentioned that you help educate the market in price point. I think that’s one of the most crucial factors. You educate the market that paying extra dollars is worth it for products. Tell us how you educate the public about it.

Dennis Tay: I think the education was through the entire business. We start by educating our team and staffs. I think that’s one of the most important things. We educate the consumers in terms of being really honest.

As a retailer the core of business is, theoretically you need to push your products as quickly as possible so that the customer’s satisfaction was there and the customers will understand that if they buy a product today, they will get it tomorrow. We’re very supportive of local designers.

So let’s say, I’m a designer and I have this prototype. He may not have release stocks yet, but we will allow you to sell the product, but we will tell the customers that they have to wait about a month.

We explain that is because the designer is only conceptualizing and he’s afraid to take the risks that are why we allow them to do pre-selling. In this way, the consumer will start to understand because we tell them.

When designers don’t have that kind of demand they are very scared to make commitments and when they don’t make commitments that’s a waste. In this way we help them understand that they still can create and if there is an offer they will make markets from there.

We met this really great artist. He was really afraid…

Marcus: What is he making?

Dennis Tay: He’s making these prints. His name is Sydney and he’s now an architect. He’s commissioned to do art prints and stuffs like that for government bodies. In the very beginning, we were very afraid. It took a little bit more persuasion before he tried and said “let’s do this together.”

There’s a bad history of retailers selling the products and not paying the designers. They feel constricted and very fearful because of that. They fear that there won’t be enough market so they stop. It’s always a waste.

Marcus: How much in value?

Dennis Tay: 30 to 60 items. That’s $900 to $2,000 plus.

Marcus: That was a good market feedback; even technically nothing was done yet.

Dennis Tay: They need to know that the local market can support them. It helped them to gain their confidence, to make that commitment, to see and to believe in what they can, for the products that they make there is actually a demand. When they do that, they start to innovate, they start to create more.

But for the consumers we tell them that there’s a lot of education in perspective. If they began to start to understand the perspective it will be easy for them to understand all.

Why is it so expensive, because there’s a lot of demand or it’s very hard for the supplies to produce. We explain that to the consumers. We are like the spokesperson for every client that we represent and each story that we tell for representation.

Marcus: Let’s talk about the business model of NAIISE. You started from online platform and now you have multiple stores. On the flip side, we see a lot of retailers for this year 2015 and last year 2014. What made you decide to go from online to retail?

Dennis Tay: I think we decided to combine because the rent was lower and risk wise it’s much lower as well. We need to focus on being cost effective. I budget 3,000 dollars so that means 8 dollars a day. If you spend it over 365 days and it was really tough.

We decided to start with an online store to serve as a test. It will be a place where we can understand our consumer’s wants and demands. It has a way to see the logistics of things.

Being online will help you lower the costs. I believe that for this to be successful, it has to be forward thinking and long term thinking. We can spend 3,000 instead of 10,000 dollars.

Marcus: In which revenue will you add to your online when you realized that we’re dealing with something that’s sustainable. At which point did you realize?

Dennis Tay: I think closer to the year 2013. That’s when we start to realize that hey, this is actually working. When I started business the first few months was really rough. But then people started to buy products and people started buying from the online store, I realized that it makes sense and that it just needs more education.

It’s a need more helping to find more supplies. We started online maybe because it’s the most cost effective solution. Then after that in the year 2014 we were very lucky to be invited to be part of fund.

Why I really want to have an offline store is because I think we are still in a market where we need to educate our consumers. The products that we sell are not really necessities, they’re not bread and butter.

The products are a bit higher price and we want to give a place for consumers to come in and touch the products and feel the products. For us, it’s a lot of help for education. When we started as online and moved to offline everything was very fickle.

You think about in terms of costs. Your costs rise because you have retail staffs, your space, etc. Simple things like that usually deter people in going offline. We really want to stick by what we aim to educate consumers. In that sense having a physical space is important.

It is important to build the gap of what the designers are making to what consumers want. Having an offline space the customers will come and say “hey, now I know why it is expensive now that I feel the material.”

I think we also wanted to go offline because we do want to change the retail experience. We do want to be the representative of local brands and to reach out to more people.

The more the demand grows the more the supply chain grows. If there’s a demand, people will say “if this guy can make it, so can I.”

Marcus: So you got that network.

Dennis Tay: Yes, the offline store really aided us in that way. In terms of human traffic it is also a lot stronger.

Marcus: That’s very interesting, most will say that traffic is fading away, but here on the flip side for you guys you’re doing better and better on the retail.

Dennis Tay: Yes, This is a really interesting story, this was on 2014 December. We have a stall in Little India. It has been quiet because of riots so people are afraid of going there. We had this pop up store during the last Christmas and there are actually people who turned up before we opened.

Every day before we even open the store there are people outside waiting for us to open the store. And again this was in Little India, a place where nobody wanted to visit at that time. People don’t come here specifically for something; they come here to open their minds.

To really discover the world of products. We see a lot of people coming to my store to spend on things. They come here to open their eyes to everything. Because of that, I think hopefully it becomes a point of interest.

Marcus: What kind of workshop you run these days?

Dennis Tay: We have jewelry making, calligraphy, and the appreciation

Marcus: Very creative artifacts kind of thing

Dennis Tay: Yes, correct because we understand that design artisan products, made products, handmade products they intend to be not accessible and our whole goal is to educate them.

Marcus: You talked about a little bit of pop up store, what about your first actual retail store which you have to pay rent. Tell me about the story?

Dennis Tay: Surprisingly, we are actually approach by the malls and the rates that they offered is really fair for the both. In fact, it’s fair and we know that cost wise it wouldn’t hurt us even though we didn’t generate enough money and because we started with more willing to commit to this retail price.

Marcus: And Also I think of some of the most new brand has which you attract a crowd.

Dennis Tay: I think what we did was a win situation. Today the retail malls are our point of interest, we help to get in traffic for them and in that sense, people do come and in the end they go around and even spend more money in the mall.

But in the essence, yes it’s still a win win situation that enable us to scale in this way because in terms of costing it’s something that we know we can cope and will be make.

What we do is that we make sure we focus on doing and creating interest in that space like product refreshments and we do a lot of events, we bought together with STB to create a space only to find something interactive as well.

It’s a lot of experience being able to come in to discover a whole new world of products, but at the same time being able to appreciate or sit in to a workshop, learning something new or something different.

Why is that it’s really affordable? Because my whole team builds E-shop so we actually spend less than 5,000 dollars to build an E-shop.

Marcus: Here’s my next question, so a lot of retailers are complaining about they cannot find people or even contractors, so how do you find people?

Dennis Tay: Firstly the hiring process is really tough and on the top of that the business model really dictates the kind of people that we actually taken by the company. To be really honest, I think that I’m very thankful for the team that I have.

I have many people telling me how lucky I am to have these good people who are really willing to do as much as they can for the company. It’s not just the company and it’s also the consumers.

A lot of the choice that we get is when consumers come into the shop and tell us “It is not because of you guys, we all know how creative Singaporeans can be” and that really drives us in that sense.

I normally see suppliers go from one man at home packing things and getting the family involved to help them to pack to know that they are having space and having 3-5 man team, all this is very motivational for the team and it’s very strong in the sense of fulfillment in terms of meaning and purpose in their life and we tell them that.

And they got to see themselves as employees; you get to see how 20 suppliers have now grown to 700 suppliers all which 70% of that is designer guys.

Every day we have new brands coming out with us and saying designer products. What we know is we are not just doing a retail business, we are actually stimulating and cultivating a creative economy and we are getting people to stay out of their shell and go recreate.

My joy and my fashion are creating something, but then now they know that there’s an agony for me to sell the products. If there’s a possibility that if this guy can make them so can I and therefore I am more willing to take that risk.

What we see a growth for entrepreneurships, we see a growth of the people standing out of their shell and need to take those risks and to us that is the fulfillment. In terms of our business model on how to be hired, actually the first stage of the interview is you come and we tell you exactly what hell you going to go through.

We have a 1 month unpaid probation, we have a model were the salary of employee base on the percentage of how much we do so no employees are nice including myself in that case and with these it’s sustainable because there will be one of the biggest cost in every organization.

If we can pack payroll we make, we should never ever lose our money and so we tell them that as well. We tell them to have to work overnight or seven days a week and we lay this for every upfront and we tell them that this is what you are going to go through.

We tell them the culture of the business which is encouraging people to do the things that they love so when you come you don’t apply for a position; you come to apply for the culture.

Marcus: I’m sure that before you build the brand nicely, there was a way of how you get those people which I’m very curious and how did you manage to achieve that?

Dennis Tay: It’s really the culture and what we stand for as a company. We had once had replicas on our side and we actually called for a product recall because we don’t want to support replicas. We don’t think that it’s fair to the people in that sense because it’s not real if you get what I mean.

It’s who we are as a business, very ethical, transparent, and sustainable every employee knows what they are getting into. They understand the structure, know how much we made as a company and there’s a lot of empowerment.

This is a team game and they never go one person is in charge of one project, everybody is in charge with all projects and we are all in charge of everything because at the end of the day for me is to see them develop possibly to become the next CEO or CFO.

Something like that and they see the growth within themselves as well. For me as a boss, I spent a lot of time trying to develop my employees and they see that as well.

But back to the start of how to manage your people was true again like I said what you stood for in the retail center and we have very interesting products, unique sign proposition and I think a lot of people are trying to buy that.

As the team started to grow a lot of people become attracted by the company because of the brand and I’ve always told the team that we as a brand we are still humans.

The brand is comprised of everybody inside the brand and so we go about telling people our every life in it. When we have a milestone we celebrate all the consumers, Instagram, Social Media because we want people to know about our struggles and we always told that to my wife you know I said that in the very beginning.

When I first started the company everybody is reading the company’s blog that it’s actually a one man show, just me running around doing everything and the whole point is that we know in an age where you have to be honest with your supplier and consumers.

The more you are transparency with them the easier for you to not to attract the right people, but to also help people to understand better about why sometimes things might be a bit slower or why some things are not done right at some point in time and we honor it to them so we can fix them.

Every time we receive a feedback we always try to work around and fix those issues and I think most importantly is it’s a very fun place, of course from the product we sell and the things that we do.

A thing in that sense, we actually attract the same people through word of mouth, we never advertise our job hiring though jobs db things like that, and all hiring is done through our own social media channels.

Marcus: That’s really cool because I think you hire the same people from your own community, that’s why they know the brand and know what they stand for and like you said they are drawn and attracted to the nice culture.

Dennis Tay: Yes, and the most important thing is that they like minded and they already know the struggles of what we go through and for us it’s all about telling people that it’s not a perfect company and not the best company in the world.

But we will one day the best company as long as everybody wants to make it better company and it’s not easy because we are trying to grow a group of people who might not have experience and qualification.

Today, if you’ll ask me where my employee graduated from, how old they are, I could tell you that I don’t know, what experience they have? I don’t know because we hire base on their passion because I’ve always told that if you are going to be good in something and love what you were doing you will only excel and progress if you love it so much and you want it to be better for it.

That’s why again it’s just laying it out from scratch telling everybody that this is what you are going to go through if you’re ok with all that you come back for a second interview and in that interview we claim your goal for path and were going to take you.

So in that sense if comes very far, if it becomes not more, about making money, but growing as a person, it also becomes your now doing something really meaningful while being able to make money and because of all these things I think we get to attract the best people that we can find who really are into the business, who really want to see the business grow.

Marcus: From one of your previous interviews that you did mentioned that NAIISE was approached by a numerous businesses and investors who are looking to invest or even buy the brand but they were all turned down.

Two questions that will come out there firstly what were the reasons all of that offers were turned down and second question is will you ever consider VC funds because scaling you need capital for growth?

Dennis Tay: I think in the very beginning one of the biggest questions that I think I’ll ask myself was “Do I really need to take the fund thing or not?” In fact the presentation that I gave to SMU it was actually my toughest challenge to raise money.

By the point that I am the only founder and what I realize that if you create thru value customer should come and you should focus on that, not on trying to raise money because we all know that raising money tends to be a bit tedious and for me I want to focus on creating something value.

If am not doing good enough then I should try to figure out how doing it better and at the same time when I started the business I was really entering the market where there were little demand so it becomes even more difficult to justify to VC or investors and things like that. For me, being able to see that culture grows and the consumers love great products and being always be that platform that always stimulating the growth of creativity.

Let’s focus on that, not think about funding and all of these things. We do it and when we get attractions, then will think about it in time to come so in the very beginning yes we have people who are really interested.

But I kind of figure out that we are in the right state and after that we have a lot of investors and they wanted to come in, for me it was because I started to realize that people in the company are good, so I started to think that I am not in a hurry to sell the business, not in a hurry to attract as much funding so I decided that we can wait because of course when your revenue grows over time then if the people want to invest.

And lastly because I think that one of the true beauties is that they all know that they come from very humble beginnings a great story that I always share is that, when I came from office it was a warehouse base and for me

as a boss I want to give the best for my employees and I said guys we need to install this aircon in our office and the price is 20,000 and my boss really surprise me and made me really think even harder by taking funding things

like that and they said to me “It’s ok, we don’t need that aircon and we can save that money for other purposes” and to find people like that is really difficult they give up their own comforts for the better of the business and

it move me a lot in that sense because it really made me realize that this people is the right set of people that would make a way to business and in essence because they come from humble beginning.

Every time when anyone asks them to automatically find the most effective way to do it and because they know that money needs a lot, we are always cost effective and we are always focus on doing the right things and surpass the competitors, manage to survive in such a competitive landscape.

Marcus: Where you see NAIISE in the next five years?

Dennis Tay: If we are looking for funding or VC, I think we are always open and to be able to meet different people and to find VC that truly understands the business, the risk that we are willing to take sometime and be are ok with it, we are still open to that.

Marcus: You covered quite a few things just to quickly wrap up, the majority of our people here pretty well to do business owners, but because of technology and digital distraction they always want a thing forward in an economy today were more rentals are really high consumer purchase is

going down as well specially in offline manner, yet we see brands that is striving very well like more in an offline world, now if you will give one word of advice to such a business owners of few sentences what would that be?

Dennis Tay: Look after your people, I think that a company is only a company brand people who are willing to push the boundaries of the business and willing to,

These are people that are really hard to find, these are the people who ultimately really help your business to move forward because, like I mentioned again we will not have the funding that our competitors will have but my employees are going to work hard twice as harder than any other employees out there.

Marcus: Cool, thanks for doing this interview.

Dennis Tay: Thank you very much for inviting me.