Interview With CEO of Savio Firmino, An Italian Luxury Handmade Furniture Brand

Luxe.Co interviewed Mr. Cosimo Savio, CEO of Italian high-end handmade furniture brand Savio Firmino, to unveil its China entry strategy. We can glimpse more opportunities and challenges faced by overseas SMEs in China market from efforts of Savio Firmino.

Above: Cosimo Savio, current CEO of Savio Firmino (third from left)

With the rapid development of China's economy and the continuous advancement of consumption, China's furniture retail sales growth rate exceeded 15% in 2016 (data from “2017-2022 China's high-end furniture market status and investment trends forecast report”). The ability to manufacture high-end furniture and build high-end furniture brands has yet to be improved. Many overseas high-end furniture brands have entered China along with the trend, many of which are from Italy.

As early as 1997, Savio Firmino visited China with Italian entrepreneurs from different industries such as Ferrari, Fendi and Fiat. 2018 is the 20th anniversary of the brand entering China. When talking about brand development in China, “Fortunately, we came early. As an overseas small and medium-sized family business, if we enter China today, the situation will be much more difficult," Mr. Savio said with gratitude,

Savio Firmino was founded in 1941 by Mr. Firmino Savio in Florence, the birthplace of the Renaissance. The brand provides high-end Italian handmade home furniture and hotel furniture & design around the world. It is favored many celebrities with Italian unique Renaissance art style and exquisite craftsmanship, such as Russian President Putin, Hollywood movie star George Clooney, Sharon Stone and so on.

The current CEO, Mr. Cosimo Savio, is the third generation of the Savio Firmino family. Introduced in 1997, Cosimo Savio began to take root in the China market. It opened its first store in Shanghai in 2004. Cosimo even met his wife in China and now had two babies, which also helped him better understand Chinese culture and the market.

Moreover, Cosimo constantly emphasizes the importance as well as the sophistication of China market. "There are many opportunities, but also you need to be very careful," Cosimo said with a smile.

Luxe.Co: What is the business scale of Savio Firmino in China?

Savio: Currently, the annual retail sales in China is around 6 million euros. We are very satisfied with this number, as we only have home furniture in China, excluding the hotel furniture design. In China, the hotel industry is full of local companies.

Luxe.Co: What channel does Savio Firmino sell through?

Savio: Savio Firmino furniture is licensed to develop markets in each target city with a local exclusive partner. Furniture purchases are very different from other products. Consumers may only buy one or two times in their lifetime. In particular, considering our positioning and pricing, purchase decisions are of great significance to customers. Savio Firmino needs local partners in every city to develop markets with partners on a commercial and social level. Now that customers have more and more demand for offline services in the field, Savio Firmino also plans to establish service offices in China to provide more value-added services.

Luxe.Co: For Savio Firmino, what are the main differences between home furniture and hotel furniture?

Savio: Hotel furniture is usually bulky, but the profit margin is low. The profit margin of home furniture is 20-30%, while hotel furniture is 10-15%. We have hotel furniture cooperation in other countries around the world, but in China, local suppliers and brands are strong competitors, and the price and the entire business process are our weaknesses. At the same time, we also notice that China's labor costs and raw material costs are increasing in recent years. The price advantage of Chinese companies is also declining. We will continue to promote the sales of hotel furniture when the market is ready.

Luxe.Co: For an overseas small and medium-sized enterprise like Savio Firmino, specifically in the furniture industry, what are the challenges in China market?

China market has great potential, but the operation is not easy, especially for medium-sized overseas companies like us, It is even harder for the furniture industry, as we are manufacturing in Italy and transporting furniture to China. In addition, we also need to provide after-sales service. Chinese consumers have higher requirements for products and quality. We need to provide excellent products and services to maintain a high level of the brand image.

Although there are many difficulties, I am very confident in Savio Firmino and have received much positive feedback from the industry and customers. China is a fast-growing country, and we need to be flexible.

Luxe.Co: How do online and offline integrate in the furniture industry?

Savio: The three aspects - brands, physical retail, and online channels - should all be more open-minded, and strategize from a business perspective.

Physical retail has a natural physical space for furniture. Many Chinese customers need to see these products at least once before purchase. In addition to the physical display, it is worth thinking what value can physical retail provide for the brand. Today, many customers no longer go to retail stores to understand brands or even make the decision, but instead, recommendations from their friends, or from professionals such as architects and interior designers matter more.

Both physical retailers in China and Italy face similar problems, and they are very uneasy about this change. However, nothing fundamentally has changed. I hope that brands can integrate the online and offline experience. For example, Savio Firmino has reached a cooperation with JD.com in Milan Design Week 2017. Since April 2017, it has opened a flagship store on JD.com, and launched the first batch of nearly 20 children's furniture products. All products are tailor-made for China online market, produced in Italy and are regularly maintained in China.

Some partners in China are also very cooperative. We will share some online revenues with retailers so that our interests are connected. After all, our costs and benefits are relatively fixed, but we are willing to give more profit subsidies to different partners.

Luxe.Co: Recently, you have teamed up with Monnalisa, an Italian high-end children's wear brand, to jointly launch the Monnalisa Living by SAVIO FIRMINO® children's fashion furniture collection. This cross-over collaboration is very unique of its kind. We are curious about the strategies of branding in marketing. What is your branding and localization strategy?

Savio: As a foreign company, especially in the furniture industry, we are very weak compared to large luxury brand groups with strong capital. However, we have the same products and service standards, which is not easy. If foreign companies want to succeed in China, they need to have enough patience and capital.

During Milan Design Week in April this year, we became the first Italian furniture brand to enter JD.com. We want to better understand the online market. JD.com has very good e-commerce promotional and operational resources, and we hope to get more exposure.

We have increased our exposure through various cross-over collaborations. For example, we launched the children's collection in 2008 designed for infants and mothers, products including the furniture needed from baby to teenager stage. Recently, we collaborated with the Italian high-end children's wear brand Monalisa, and jointly released the Monnalisa Living by SAVIO FIRMINO® children's fashion furniture collection. Next year, We plan to design a series of stickers for children at the Milan Home Show, which is printed with Savio Firmino furniture. Children can decorate their dollhouse with these stickers. Through these attempts, we can also attract parents to the brand and achieve more cross-sales. Recently, American movie star George Clooney has just purchased our products for his children, which was a good news on our brand image.

Above: MONNALISA LIVING BY SAVIO FIRMINO

Above: MONNALISA LIVING BY SAVIO FIRMINO

Nowadays, brands need to showcase themselves harder than ever. We used to rely mainly on paper magazines, but today we need KOLs to attract potential customers. China's social media is developing rapidly. WeChat has matured and formed a closed-loop ecosystem. We can write much content online, but the number of people reading WeChat every day is limited. We need to communicate more effectively on social media.

Luxe.Co: During the second Milan International Furniture (Shanghai) exhibition, Savio Firmino created a virtual museum experience in China usinh VR technology. How do you think about this innovative marketing method?

Savio: Actually, we are very good at innovation in technology. For example, Savio Firmino sponsored the most classic 1696 style bed for "The Lusk", the world's first multi-sensory VR film. We will also bring this film to the Milan home show. We have a lot of movie star customers. It is interesting to use the viewing chair in the movie scene. We also plan to work with the American company that designed this chair. We are optimistic in China's booming film industry, and will try to implant our furniture to gain more exposure to Chinese customers.

Luxe.Co: Many Chinese companies are investing overseas. What do you think about receiving external capital?

Savio: Funding is undoubtedly very important for overseas mid-sized companies to develop in China, but it is also necessary to look for investors with broad horizons. Many European companies lost their brand essence and finally declined after absorbing external investment. Our current size is not big enough for investments. We are very competitive in the world market, but we are still learning about the China market.

Many Italian companies have good branding, product quality, and development strategies, but they need to localize themselves to China's actual operating conditions. We focus on the high-end market. The volume is small but the profit margin is high. In order to achieve higher profit margins, we need to maintain a high level of product quality and brand image. China's current brand promotion is very expensive. We will try our best to enlarge our market share, which means we may need funds in the future.

Certainly, China market is in a fast changing period with many opportunities. We will continue to focus on developing the China market, bringing more high-end Italian handmade furniture and designs to Chinese consumers.