Changing the way of doing business led Feruni Ceramiche to scale up within a mere six years. Today it has eight retail stores spread across the country, shaking up a previously dull and stagnant industry.
When he ignored objections and went on with selling one brand of tiles, CC Ngei learned the hard way that change never did come easy, as sales plummeted by 30% for the first seven months after the business reopened its doors to business as Feruni Ceramiche in February 2010.
Not only was he ridiculed by peers in the industry for refusing to distribute tiles of established brands, which promised higher margins and better sales, some of his staff doubted the need to spend huge amount of money in refurbishing their showrooms, while some other left the company feeling challenged by the drastic change.
The 44-year-old entrepreneur told KINIBIZ that it was one of the lowest points in the business, in which he felt like giving up, but it was also his staff – most of whom are still with the company today – who had encouraged him to persist.
“Then we sat down again and relooked our whole plan to see if this was something that could really have moved us to the next level. At the end of the day, we decided to stay on. Because I told the team that unless you had a better idea, everybody had to follow the plan that we had decided on.
“Finally we stirred things back on track and got everyone to focus on their roles. By the end of the year, sales still dropped but at a smaller margin of 10%. The following year we did okay, made a slim profit, and from there on we grew,” he said.
Being different pays off
In fact, changing the way of doing business led Feruni Ceramiche to scale up exponentially within a mere six years, riding on the changing lifestyle requirements and increasing affluence of its target market. Today it has eight state-of-the-art retail stores and showrooms spread across the country, with the same emphasis on customer experience.
“The whole idea is building retail stores where we provide a world-class experience to customers so that we can assist them in the selection process, on how to mix and match their tiles.
“In the past, the tiling industry was always a challenge, a couple could walk in very happy but walk out arguing. All the tile shops only showed you generic tiles, so you could not really imagine how it was going to look like in your house. So the husband and wife might imagine two very different things.
“It’s about customers’ expectations and how we go about matching them. Now we want to close the gap between the two by letting them have the look and feel of the tiles in our showrooms. In the past, tile dealers sold everything, so we are unique in the sense that we only sell one brand and that is Feruni. This is how we are different from the competition,” explained Ngei.
Between 2011 and 2015, Feruni’s revenue has tripled to more than RM160 million, a figure which might have been otherwise unattainable had it chosen to maintain the status quo. Ngei told KINIBIZ that he is looking at a 30% compound annual growth rate in the next five years.
In an industry worth an estimated RM3 billion, Ngei expects Feruni to command a market share of between 6% and 7%.
“We set up Feruni not just because we wanted to build something different but also to transform the entire industry to make it interesting and vibrant. This is what drove us to continue to invest on our stores, which are totally different from the others. People say we’re crazy to spend so much money on our storefronts, but to us this is something that we are passionate about,” he added.
People are increasingly approaching Feruni to obtain dealership for their unique designs today, to which Ngei turned down. He prefers to do business in his own approach, chasing unique experience rather than sales volume.
“Now a lot of people approach us to get our products. We started to look outside Malaysia, but our concept is not about selling tiles to them but to bring the whole Feruni concept and experience. To become a partner, we want them to do what we do here. For the short term, you may get some sales but it’s very hard to sustain the business,” he said.
To a question if Feruni is ever looking at going public, Ngei alluded to the fact that the possibility is remote. However, Ngei has plans to expand Feruni’s presence regionally.
“Going into other markets will take a longer time, but I think it is a very solid plan which will bring us far. Right now we are looking at making a foray into Singapore and Indonesia. We see Singapore as a good platform for us to go to the international market, whereas Indonesia has the biggest population of Asean,” explained Ngei.
Feruni’s people asset
Perhaps for the same reason that his staff have helped him weather through a difficult point in Feruni’s early days, Ngei realised that people are his greatest assets. From a workforce comprising between 50 and 60 employees, today, Feruni has 200 staff on its payroll.
Walking into Feruni’s head office and showroom in Petaling Jaya, this writer was blown away by its working environment and its people culture. The interior features utilitarian designs, spacious, brightly lit workspace and a vivacious atmosphere.
Attached on one part of the office wall is Feruni’s happiness emblem, which features Feruni’s core values – community, transformation, being a value-based organisation and creating talent.
“The design of our entire showroom is not done by our designers but rather our team who have no architectural skills. But we believe the right talent can transform everything,” he said.
Talent seems to be Ngei’s most-prized asset. By creating a conducive workplace environment for his staff and rewarding them accordingly, he plans to attract more Gen-Ys to join the company.
“We are in the business in which everything can be copied, the showrooms, the concepts etc. But one thing that they will not be able to replicate is people. The entire system behind is also what you cannot copy. It’s a whole package – the business, product, people with the right values, which is why we emphasise a lot on the core values,” he said.
While Ngei may be groundbreaking and unconventional in the ways he carries out his business, the devout Christian remains steadfast to traditional values such as trustworthiness and humility. His measure of success is not how much money he made, but how many lives he has changed for the better and how many dreams he has helped realise.
“What employees want are platform to excel, career progression, working environment, learning opportunities. These are how we retain our talents.
“But we never expect people to work with us forever because everyone has different pathways, we just wanted to create the platform for people to come in and learn, as long as they’ve learnt enough and depart from Feruni, we are multiplying all the good things,” he said.
To a final question of what Feruni Ceramiche stands for, he replied: “Feruni is actually two words: Fer is actually for. Uni actually stands for something unique, united in the sense that we wanted to unite resources, the people and more of the world together in a unified environment. The word ceramiche is an Italian word which means ceramics.
“Because the Italians were the ones who were the leaders in the tiling industry. They were the pioneers in the ideas and designs. They were the trendsetter. So when we thought of being the leader in the industry, that’s what we envision for ourselves.”
Yesterday: Carving his own niche