Koda: a household legacy of fixed evolution

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Part of Lifetime Legacies, a series produced by SilverKris, for Opus by Prudential

When we think of the word legacy, we imagine tradition, holding fast in the face of change, but that may not be the full picture.

Equally important as an enduring legacy is evolution. Koda, the parent company of Singapore-founded furniture store Commune, embodies this ethos very well. Evolution has carried the family business through not one, but two global disruptions. The first of these disruptions came in 2008.

Koda was already a success story; it had grown over three decades from a small furniture factory founded in 1972 by patriarch Koh Teng Kwee to one of Forbes Asia’s Best Under A Billion in 2006. By the second generation – Teng Kwee’s sons, James and Ernie, and daughter Shwu Lee opened factories across China, Vietnam and Malaysia, producing orders for clients such as Crate & Barrel and Pottery Barn.

During the global recession, business from the US and European clients dried up, and this propelled Koda to its greatest period of evolution, and a moment for their third generation to shine arrived, leading to the launch of Commune.

Joshua Koh is the CEO of Commune, and the grandson of Koda founder Koh Teng Kwee. Photo credit: Ahmad Iskandar Photography

Each generation goes against the grain, but we also have a family culture of financial prudence that has allowed us to survive challenging business environments

A legacy’s new chapter – built on humility

Rather than rely exclusively on manufacturing for other brands, Teng Kwee’s grandsons, Julian and Joshua Koh, wanted to evolve into a retail brand. Focused on the fast-growing Asian market, this strategy diversified the family’s holdings and delivered better margins than the parent business. The brothers teamed up with their cousin, Gan Shee Wen, who would head up sales and marketing. In 2011, Commune was launched as a wholly owned subsidiary of Koda.

In the years that follow, Commune established a full-fledged design team headed by Julian, launched offshoot brand Alt.o for larger landed homes and expanded into home accessories. In 2022, 16 years after its first appearance on the Forbes list, Koda returned to Forbes Asia’s Best Under A Billion, this time in a large part thanks to the third generation’s bold vision.

At the core of these visionary strides, however, are young men who have been raised with a sense of humility. Chief Executive Officer Joshua says that the biggest lesson taught to him by the previous generation has been to not expect things to be handed to him on a platter.

“My grandmother taught me this early on. Instead of just giving me the things I wanted, she ensured that I worked at our factory during the holidays to earn money to buy them,” he recalls. “This lesson has taught me that there’s no substitute for hard work, and I have applied the same approach in my professional life.”

With their cousin Gan Shee Wen, the Koh brothers founded Commune as an offshoot of the two-generation-old business Koda. Photo credit: Ahmad Iskandar Photography

The dance of tradition and evolution

With evolution comes differences in opinion. Joshua explains that the manufacturing business spearheaded by his elders involves a very different mindset from the retail business he wanted to build with his brother and cousin.

“In manufacturing, most of the investment is into capital expenditure such as machinery. For retail, one of our biggest investments is marketing, which can sometimes feel intangible,” he says. “It was not easy to convince the previous generation to accept our investments into branding and marketing.”

For a legacy to remain unified, even the boldest evolution has to come with the blessings and guidance of prior generations. Joshua sought consensus: “We asked for a small budget first to show them how it can help the business to grow. When this proved successful, we managed to assure them that these investments were necessary and not a waste of resources.”

Joshua also pointed out that though Commune has made radical departures from its parent company, the previous generations’ business acumen remains at the core of the business. “Each generation has this spirit of going against the grain – in a good sense,” Joshua says. “But we also have a family culture of financial prudence and that is something that has allowed us to survive even the most challenging business environments.”

Julian Koh is the Chief Design Officer at Commune. Photo credit: Ahmad Iskandar Photography

Steering a legacy through tough times

A few years later came another disruption that threatened the family business – and once again spurred it to evolve. The 2020 Covid-19 pandemic initially shuttered Commune stores and some of their factories. Nevertheless, the Koh family saw opportunity in reaching homebound consumers who desire more soothing and soulful living environments.

They doubled-down on providing a meaningful digital retail experience with their virtual reality services. “We already had our omni-channel Commune-in-Motion platform in place which includes an Augmented-Reality feature that allows a lot of our consumers to view our furniture in their actual space without stepping out,” Joshua says.

Since then, Koda and Commune focused on digitalising their warehouse management system to boost operational efficiency in their production processes, as well as reduce unnecessary waste with their raw materials.

A legacy with local roots and global outlook

Like the most memorable Singapore legacies, Koda and Commune have a cosmopolitan outlook. In addition to having factories and operational functions distributed around Southeast Asia, the team exhibits at international events such as the Maison & Objet fair in Paris.

Joshua says that international outreach and travel helps the business absorb best practices from markets with a longer history in the furniture industry. “As we strive to become a global brand, it’s very important to understand different consumers’ lifestyle behaviour and needs,” he says. “And the only way to do that is to travel widely and experience it first-hand.

At the same time, the family stresses that Koda and Commune are very much Singapore brands. Joshua believes Singapore is the ideal base – at the crossroads of East and West – from which to grow a global brand. “We will always want to maintain our corporate HQ in Singapore,” he says, “as the Singapore brand itself provides its own legacy of trust and professionalism.”

We want to create a business that is professionally managed, but we also believe that it is the passion of the family that has brought it this far

Maintaining a legacy of constant evolution

Despite their bold strides and confident decision-making, the third generation are mindful of nurturing Koda and Commune well into the future. “There is a great sense of pressure that we place upon ourselves, to continue growing our legacy,” Joshua says, adding with a laugh, “and not be the generation that puts an end to it!”

At the same time, it’s clear from the success of Commune, that allowing and nurturing constant evolution is the key to growing a legacy.  “We hope that Commune will be able to exceed what the traditional business is doing and become the main business segment for the group,” Joshua says.

And who will carry this legacy forward? On one hand, the Kohs see the value of having successors from within the family, but on the other hand, there’s also value in bringing in the right people from outside.

“If the right people with the right expertise come along and are able to grow the brand, we are open to having people from outside the family in key management positions,” Shee Wen says.

At the same time, he believes there’s more to family legacy than just family privilege. “We want to create a business that is professionally managed, but we also believe that it is the passion of the family that has brought it this far, and having the family drive the strategic decisions is very important.”

With the three men still in their 30s and early 40s, it’s a bit early to tell what the next generation of Koda and Commune will look like – but there are reasons aplenty to feel optimistic about this creative and ambitious Singapore family.

This feature is part of Lifetime Legacies. Produced in partnership with Opus by Prudential, the series explores the longevity and legacy of some of Singapore’s most well-known multi-generational family businesses.

 

About Opus by Prudential

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Interviewees’ words are their own and may not necessarily reflect the views of Prudential.



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