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HyggeB (pronounced “hue-guh-bee” and alludes to warmth and comfort in Danish) was co-founded in 2019 with a mission to give customers a good night’s rest every single night. The inspiration behind this homegrown bedding sheets brand came from two very different places for co-founders and close friends Jenn Lee and Ted Chong.
Jenn was constantly unsatisfied in her quest to find comfortable sheets to enjoy a good night’s sleep. Worst still, she could not easily return products that did not deliver on its promise and were often overpriced as well.
She raised a misconception she was once guilty of, that “many people were being convinced that having a higher threadcount made a bedsheet better quality, which is not the whole truth”.
After sharing this with Ted, who was looking to launch an e-Commerce business, they decided to start HyggeB as a high-quality, organic bedding business.
From Side-Hustle In Singapore To Gaining Regional Footprint
At the time, Jenn was five years into her career as a Financial Consultant, and found that she had the flexibility to devote some of her time to a new venture. Ted, on the other hand, was an international digital marketing specialist for consumer products who was fulfilling a desire to launch his own business.
From its humble starting point as a side hustle, HyggeB has grown into an international bedding brand having sold over 4,500 of its organic Bamboo sheets since 2020. Customers can browse an extensive product catalogue and purchase high-quality bedding sheets online, and also return unsatisfactory products with the click of a button.
While speaking to co-founders Jenn and Ted for this interview, they shared that “expanding overseas is one of our top priorities this year”. We also learned how they are juggling their business financial management while trying to expand their organic bamboo sheets brand overseas.
Dinesh: In any co-founding team, there are bound to be differences. What have your biggest challenges been managing a business together?
Jenn & Ted: Early on in our business journey, we disagreed on international expansion. One of us believed that rapid expansion would solidify HyggeB’s position as a global brand. While the other was more concerned about the financial strain and operational challenges of expanding too quickly without fully establishing a strong domestic base.
Over several strategy meetings, we were able to clearly identify the potential benefits and pitfalls of early expansion. In the end, we compromised by entering one selected overseas market as a pilot project, rather than going into multiple markets simultaneously. This approach allowed us to test our capabilities and gather valuable insights without overextending our resources.
We view our differences as strengths rather than obstacles. Listening to each other’s differing perspectives can lead to more robust and effective decision-making.
Dinesh: HyggeB was started in January 2020 – right before the COVID-19 pandemic hit. While brick-and-mortar businesses suffered, many e-commerce businesses were buoyed by an avalanche of customers going online.
How did the pandemic impact HyggeB?
Jenn & Ted: While the pandemic helped to boost online sales for most businesses, it created a strain on our new business.
Since we had newly launched, we were only holding on to about three months’ worth of inventory, and didn’t have enough stock to fulfill the sales that were coming in after that.
The lockdowns and border restrictions impacted our supply chain to a point that we could not determine when the next batch of bedding sheets would come in. Our lead time is also relatively long, about three to four months, as we manufacture our fabrics from scratch.
During a time when many online businesses were flourishing, HyggeB had to shut for around six months. All the while, we continued to incur fixed costs for our digital assets.
We restarted when the lockdowns eased and tried to make the most of this experience. Now, we have a better understanding and control of our supply chain and logistics. We have a better grasp of the lead time for manufacturing, shipping and final delivery in Singapore.
Dinesh: Automation is another part of business building that cannot be ignored today.
While I’m sure HyggeB has automated crucial aspects of your operations, I’m curious about the parts of your business that you’ve deliberately not automated?
Jenn & Ted: You’re right. We have automated various aspects of our business, such as inventory management, order processing, and customer relationship management.
We deliberately chose not to fully automate customer service. While we have tools such as a chatbot and FAQs on our website to answer simple questions that customers may have, we believe that a personal touch is crucial in providing exceptional customer experiences, especially when they have feedback or complaints. One of us (Jenn or Ted) would be the ones replying to the email or WhatsApping them to better serve their needs.
Customer feedback is another avenue for us to identify areas for improvement and pursue innovation driven by a real gap in customer expectations and market demand. Today, many of our customers are returning to buy more products from HyggeB.
We then collaborate with industry experts to pilot new products and concepts in small batches to gather more feedback before scaling up.
Dinesh: The material that you use in your bedding sheets is not only soft and comfortable, but organic and sustainably sourced.
How do you balance between running a profitable business and running a business that does good?
Jenn & Ted: Balancing profitability and sustainability is at the core of our business philosophy. We prioritise sourcing materials that are certified organic and sustainably produced, even if they come at a higher cost.
By optimising our supply chain and focusing on efficiency, we manage to keep our products competitively priced. Our customers value our commitment to sustainability, and this has helped us build a loyal customer base that supports our long-term profitability.
Dinesh: Cashflow is a source of stress in many businesses. With physical products and a long lead time, there may be even more strain.
How do you manage your cashflow at HyggeB?
Jenn & Ted: We are careful with our forecasts for product demand and cash flow management.
We work closely with our suppliers to negotiate favorable payment terms and manage inventory levels to avoid overstocking.
We also carefully plan for upcoming expenses far in advance. That’s how we first started using OCBC’s Revolving Term Loan – which gives us access to cash on-demand and the flexibility to draw down only what we need. We can also pay back the loan amount earlier when we receive customer payments to avoid paying more interest than necessary.
Just recently, we drew down $25,000 to place a new batch order without having to affect our existing daily financial operations. We foresee paying this down much earlier than the 12-month term we have – using sales proceeds when we eventually take delivery for the products in three months and sell them soon after.
By balancing our spending and continuously monitoring our inventory, we ensure that we can meet our financial obligations and invest in growth opportunities.
Test Everything Even If You’re Convinced Your Strategy Will Work
From the very beginning of their entrepreneurship journey, Jenn and Ted had to resolve strongly differing opinions on international expansion. One of them wanted to go international from Day 1, while the other preferred a more conservative approach – building a strong local base first.
Rather than let this drive a wedge in growing their start-up, they decided to test the strategy. This allowed them to collect data and distil an internationalisation strategy from the get-go, while not overextending their business finances.
Similarly, when it comes to product innovation, HyggeB relies heavily on customer feedback for improved products and innovations. Only then do they pilot small batches to test market demand – which may or may not lead to scaling up the line.
This also led to the co-founders finding a foothold in new product categories, including baby cot sheets and, more recently, their home accessories line.
As with any e-commerce business, HyggeB will also target new product launches to spearhead both marketing and sales. Their Winter Collection launch will be available in October – selling their latest line of bedding sheets in Dusk (their latest colour), Olive, Champagne, and Breeze. They also shared the promo code “HYGGEB” will give shoppers 15% off their total cart value with no unnecessary T&Cs such as minimum spending.
HyggeB’s Winter Collection: (from left) Dusk, Olive, Champagne and Breeze
HyggeB manages its finances the same way. They diligently forecast cash inflow and outflow using the Business Financial Management feature on the OCBC Business app. This has enabled them to uncover potential shortfalls in their cashflow needs.
Taking up the OCBC Revolving Term Loan became an ideal solution. HyggeB has flexible access to financing – which can help in the instance of a forecasted and non-forecasted shortfall in cashflow for a short period. They can also better tap into business opportunities as and when they come knocking with near-instant access to financing.
This characteristic of the OCBC Revolving Term Loan is all the more beneficial as HyggeB only has to pay interest on loan amounts that they drawdown even if they enjoy a much higher approved limit. For example, the co-founders only used half of the $50,000 credit limit that HyggeB has on its Revolving Term Loan.
They can also drawdown relatively small amounts starting from $10,000 and in increments of $5,000. Moreover, they retain the option to repay these loans earlier – after giving a one-month notice – without any penalties. This allows the business to save on unnecessary interest payments.
For the co-founders, having a Revolving Term Loan facility reduces the risks of their short-term cashflow needs and enhances their ability to make swift decisions when presented with the right business opportunities.
The post How HyggeB Co-Founders Grew Their Organic Bedding Sheets Brand From A Side-Hustle In Singapore To An Regional Business appeared first on DollarsAndSense.sg.
