Ukrainian sofas in Canada: Success story of Blest furniture company
Blest’s history began over 20 years ago. It is currently one of the largest Ukrainian manufacturers of upholstered furniture which is popular not only in Ukraine but also abroad – in Slovakia and recently in Canada. High quality, a solid reputation and ambitious plans for the future – this is what Blest is all about.
‘We started out in furniture production back in the 1990s from modest beginnings in a small garage. The first sofas were sold at the open marketplace; there are even photos of our sofas standing in the snow. However, the company hasn’t been operating under the same brand for the entire 20 years; we’ve had a few names, and the name Blest appeared in 2005,’ says Serhiy Savchenko, owner and director of the company.
In the early 2000s, the Ukrainian furniture market was not very competitive, but the business was steadily growing. Manufacturing began and continues today at a factory in Cherkasy (Central Ukraine). Production figures have doubled over the last 12 years.
New trends
The company is currently operating in several areas, the main one being the production of upholstered furniture in the mid-price segment. Its premium range, which Blest calls «Individual» is also under development. At the experimental production site near Kyiv, more expensive sofas and beds are being made, with custom designs created for individual customers at their request. Children’s furniture is manufactured under the Blest Kids trademark.
«Trends in the furniture market are changing in Ukraine. Some five or six years ago, the mid-price segment was the core of the market, whereas now more and more manufacturers are moving towards low-cost product lines. Why so? We are moving towards Europe where consumers are not used to spending so much on furniture. The Soviet mentality of buying expensive furniture that would last for 30 years is on the way out. Consumers nowadays, especially young people, are more inclined to buy inexpensive, practical furniture, which they will replace in two or three years’ time with something new and trendy», explains Mr Savchenko.
The company is actively engaged in developing a network of its own showrooms where customers can see the products and pick the model that suits them, choosing the size, fabric, colours and more.
The company buys almost all its materials, except for fabrics, in Ukraine. In 2010, the company started to collaborate with the Italian studio Lauriero Design. Blest has also created a design and innovation service headed by Italian designer Domenico Lorato. Export horizons
The next step in the company’s development was entering foreign markets. Like most Ukrainian companies, Blest decided to try its hand at Commonwealth of Independent States (CIS) markets – the Russian Federation, Kazakhstan and the Republic of Moldova. The company tried to build a dealer network in the Russian Federation and Kazakhstan, but after 2013 decided to abandon operations in those regions, a move influenced by both economic (devaluation of national currencies) and political factors.
After 2013, the company decided to refocus on Western markets, although with no clear idea about which specific market to target. Through its collaboration in a project of the European Bank for Reconstruction and Development (EBRD), a consultant helped Blest identify 10 priority export markets, which included Germany, the United States (US) and Canada.
The way into Canada
In 2017, the company learned about U CAN Export, the export support programme for small and medium-sized enterprises of the Canada–Ukraine Trade and Investment Support (CUTIS) Project, and decided to join and have a booth at the Canadian Furniture Show.
Participation was preceded by a careful screening process carried out by Ukrainian and Canadian experts, which resulted in the selection of 10 Ukrainian companies to represent the country’s furniture industry at the largest Canadian furniture exhibition in May 2018. The assistance provided by Jacques Nadeau, a Canadian expert from the Trade Facilitation Office (TFO) Canada, was particularly valuable to the company.
«Jacques provided us with detailed information about the specifics of the Canadian furniture market and helped us to choose the models that would be worth exhibiting. Without this help, the company would have had to conduct its own research. The CUTIS Project did it for us and we are grateful for that», says Blest Export Manager Viktoria Semenets.
Ms Semenets explains that, thanks to Mr Nadeau’s advice, the company displayed small convertible sofas at the exhibition which could be used both as a sofa and a bed.
«Although we were not familiar with the needs of the market, thanks to Jacques, we chose the best option. Furniture trends in Canada are changing. More and more Canadians, especially young people, live in small apartments in condominiums. That is why our convertible sofas are ideal for them», continues Ms Semenets.
«During the exhibition, Blest products received many positive reviews, praising their quality and design. ‘People were lining up at the booth to watch us turn a small convertible sofa into a standard double bed», recalls Ms Semenets.
The high standard of the Ukrainian products was appreciated not only by the visitors at the exhibition, but also by the organisers. The Ukrainian furniture booth, designed by Sergey Makhno Architects, was awarded the 2018 Canadian Furniture Show Best New Exhibitor award. According to Ms Semenets, thanks to the CUTIS Project, not only was the company able to present its products at the largest Canadian furniture exhibition, it also established contact with local Canadian retailers and learned about their product mix. The main conclusion was that Ukrainian products are competitive in the Canadian market pricewise and attractive on account of their quality.
«Chinese companies are among Ukraine’s main competitors in the Canadian market. Store owners admitted that they were not always satisfied with their dealings with Chinese manufacturers because the quality of products was not up to standard. Another sticking point was that not all suppliers were reliable partners», observes Ms Semenets.
That is why Ukrainian manufacturers are well positioned to occupy a niche in the market of good-quality furniture in the mid-price segment.
«We continue to study and adapt to the needs of the Canadian market. For example, the standard mattress size in Canada is one and a half times larger than in Ukraine. It’s important to take this into account if you want to expand your market presence», Mr Savchenko points out.
What’s next?
Through its collaboration with the CUTIS Project, Blest has found a dealer in Toronto – IVI Furniture – with whom it has successfully partnered for over a year. IVI Furniture has its own showroom in Toronto where products from several Ukrainian furniture manufacturers are displayed.
In October 2018, representatives of the Mega Group, which brings together around 400 furniture retailers across Canada, visited Ukraine and met with Blest representatives. The Canadians were very impressed by the range and quality of Ukrainian furniture.
According to Ms Semenets, the partner company IVI Furniture recently signed a contract with the Canadian online furniture store wayfair.ca. «We are starting to work with this platform, which will provide an important springboard for the company to enter the Canadian market», she added.
Currently, the company ships one container of furniture a month on average to Canada and does not intend to stop there.
«Demand for Ukrainian furniture in the Canadian market has increased by 25% in the first eight months of 2019. Ukrainian companies are very flexible; they are ready to satisfy the needs of demanding consumers and adapt their products at the request of Canadian partners. For many Canadian suppliers, price remains a key factor in choosing a partner. Thanks to the free trade agreement between Ukraine and Canada, Ukrainian furniture is competitive pricewise, so I see great prospects for Ukrainian manufacturers in this market», concludes IVI Furniture CEO Iryna Kobets.
Author – Tetiana Riasna, СUTIS