How Outer Turned a Chinese Family Manufacturing Business Into a Trendy L.A. Brand

26.Jan.2020

By: OnePeice Work


OnePiece Connect is a series designed to start the conversation on cross-border trends. It’s a sharing of ideas, opportunities, and innovation among the OnePiece Work community - which includes international brands, founders, marketing professionals, agencies, influencers, and investors.

We recently caught up with Jiake Liu - Co-Founder and CEO at outdoor furniture brand Outer - on how he combined a China-based supply chain with a deep understanding of local culture to create a winning D2C model in the U.S.

Why did you start Outer?

Americans spend 92% of their time indoors. Even though the trend of indoor/outdoor living is becoming more mainstream, there aren’t enough good products to support an outdoor lifestyle.

Outer’s mission is to be the first direct-to-consumer brand for outdoor furniture - creating the most comfortable, innovative outdoor furniture products that make it easier to live outdoors.

I saw an opportunity to get on a level playing field with large existing players because they didn’t have any established brands that were in the medium price range, but still high quality.

Big box retailers only have “disposable” offerings, and products from high-end furniture stores are cost-prohibitive. By cutting out the middleman and go direct-to-consumer, Outer offers high quality and durable outdoor furniture products that are reasonably priced without the retail markup. 

What’s the response to the brand so far?

Customers think our products are better than even high-end brands like Restoration Hardware.

Outer wants to create sofas as comfortable as a mattress, as durable as camping equipment, AND that keeps itself clean and dry. We accomplish that by going directly to the source, developing our own proprietary fabric, and passing on savings to the consumer for a high-quality but affordable product.

Another way we innovate is by leveraging the sharing economy - we crowd-source the showroom experience.

Customers willing to use their backyard as a showroom can buy the products at a discount and get a flat fee for each showing.

It didn’t make sense to invest millions of dollars on showrooms - it’s one more way that we can reinvest in the brand and the customer.

It also allows Outer to develop a community around outdoor living, the show-ers, who we call Hosts, generally become brand and lifestyle advocates to the new target client.

What are some unique challenges you’ve faced as a founder with an international background?

In the U.S., it’s more about being a tech and brand company. Branding, marketing, and connecting with customers require skill sets that are counterintuitive to the traditional Chinese experience. It took living in America to really understand the zeitgeist and trends.

Having been born in China but spent a lot of time in the US provides a unique perspective. Understanding the strengths and weaknesses of both sides and using them to your advantage is critical. Often that means building relationships and partnerships with local experts to act as “tour guides” for the market.

I left China when I was in elementary school - so I didn’t have the business skills one gains from growing up there. Conversely, I’ve seen other cross-border companies founded by Chinese immigrants struggle when they lack a deeper U.S. experience. Even bigger Chinese companies are struggling to adapt to the consumer market in the U.S.

Examples of how I’ve had success in translating my understanding of American culture into a brand that resonates are making sustainability a big part of Outer’s focus and relying on authentic, grass-roots video and photo content to tell the brand story. Really just understanding the cultural rhythms… like building a lifestyle campaign based on outdoor game-watching during college football season… can’t be gained without living here and absorbing the culture.

What are your tips for other brands trying to better understand the U.S. market?

I can’t overstate how critical the entire brand experience is to the American consumer. 

I consulted with a major Chinese consumer company, one of the largest in China, that was considering releasing a luggage product in America. Their executive said they had a product that was 50% the price and twice as good as the current U.S. incumbent for DTC luggage.

When I saw the product it was really great, BUT the way they marketed it on their English site was poorly executed. The site didn’t convey the high-end branding they needed to compete with the native brand. They used a plain brown box to ship the product - which created an underwhelming first impression and unboxing experience. The customer service was poor. They didn’t understand that the brand is far more than just the physical product, it’s everything that goes along with the consumer experience. 

Things like distribution and logistics are not a major area of need for Chinese brands hoping to enter the U.S. The Chinese naturally excel in those areas. What they lack are soft skills and marketing insights: things like influencer partnerships, social media savvy, website setup, etc.

What were the logistical challenges to getting your business set up in the U.S.?

Learning where to spend. You can’t skimp out in certain areas - like going with a cheaper accountant to set up a business. Instead, use a better law firm to set up your U.S. entity. You can go cheap as possible at the beginning, but you will pay in the long term.

How have cross-border investors like UpHonest capital helped execute on your plans to expand into the U.S.?

UpHonest has helped connect us with business partners in China that can help with supply chain (Outer manufactures our furniture in China), discover other funds for raising money in China, and build general partner opportunities in China.

Because UpHonest is based in Silicon Valley, they also have later stage VC connections Outer plans to tap into.

What do you think a lot of brands without real localized U.S. marketing experience get wrong when they try to sell consumer products in the U.S.?

Chinese companies mistakenly think America is “mature”, so it won’t move as quickly compared to China. BUT the reality is, especially in D2C, the market is ALSO shifting quickly in the U.S.

Chinese companies can’t just keep relying on simple “playbooks” to enter the U.S., they need to be creative and up to date with current trends. They need a localized team to advise them on new creative strategy that could change every 3 months.

For Outer it was the Neighborhood Showroom: it’s share-worthy, press-worthy, people talk about it, it differentiates us.

Check out their episode on Shark Tank

Marketing in the US (or any locality) requires a deep knowledge of the local culture. You can’t rely on your international resources alone. Pairing them with proven U.S. consumer marketing experience could be the difference between success and failure.

The OnePiece Work community grants you access to a network of professionals to help guide you through what (and what not) to do as you launch your startup.

Book a tour with us today!

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Coworking Space Cross-border Companies Crossborder OP Connect SoMA Coworking