Party in the USA for Castlery as revenue in its largest market doubles

In The Checkout this week, we look at how Castlery turned a profit last year and a trend in online brands going offline. [Read from your browser]( The Checkout 🛒  --------------------------------------------------------------- Welcome to The Checkout! Delivered every fortnight, this free newsletter breaks down the biggest stories and trends in ecommerce. You can find past issues [here]( or [sign up here]( to receive future newsletters. Also, If you’re not a subscriber, get access by [registering here](. IN FOCUS In today's newsletter, we spotlight: - Castlery’s [growing presence in the US]( as it achieves a net profit - Why online brands are going offline - The Parentinc’s [surprising acquisition]( of luxury mom and baby retailer Motherswork --------------------------------------------------------------- Hello {NAME} I mainly shop online these days, but sometimes, nothing beats the experience of walking into a store. Retail stores - even those in malls - are becoming increasingly beautiful and more thoughtfully designed as brands seek a way to create unique experiences for their customers. The pandemic may have accelerated a shift from offline to online, but the world seems to have found a sweet spot in between, one that combines the convenience of online transactions with the experience of in-person shopping. We’ve seen the likes of Zalora and Shein running pop-ups so shoppers can touch, feel, and try on products. Such a touchpoint also matters to consumers who seek a connection with brands they love and want to explore what they stand for. This is a shift that Castlery co-founder Declan Ee is watching even as the firm reports strong revenue growth for the second year running, as my colleague Simon notes in this week’s Big Story. Among its three markets - Singapore, the US, and Australia - the online furniture retailer has invested in a physical presence only in Singapore. Ee, however, is exploring ways to blend the online and offline experience. This theme continues in my Hot Take this week, where I discuss how digitally native brands are launching new experiential stores in a nod to the shifting demands of shoppers. -- Melissa  --------------------------------------------------------------- THE BIG STORY [Castlery reaps fruits of US gambit in FY 23 as revenue grows 63%]( Despite the rising inflation and “uncertainty” from the Russia-Ukraine war, the Singapore-based retailer made a profit in 2023.  ---------------------------------------------------------------  THE HOT TAKE Are digitally native brands ditching their online roots? Here’s what happened: - Last week, The Parentinc, which is the operator of community platform theAsianparent, [acquired]( mom and baby retailer Motherswork, expanding to the offline segment. - Klarra, a Singapore-based womenswear brand, launched a new flagship store in the heart of Orchard Road, Singapore’s prime shopping belt. - Digitally native lifestyle brands like Our Second Nature are also embracing the shift toward offline experiences, its founder shared last week. Here’s our take: Online brands are turning back to retail - with large, spacious, experiential stores. Last week, Singapore-based womenswear brand Klarra opened its new flagship store in Ion Orchard, a prime mall in the heart of Orchard Road. Dubbed an “oasis in the city,” the store interior features soft, wooden curves and is designed with the intention of being a “sanctuary” in the heart of urban Singapore. It even features a reading nook - decked with books - to cater to children as their parents shop. Klarra is not the only local brand embracing a shift toward offline experiences. Velda Tan, founder and creative director of clothing and lifestyle brand Our Second Nature, said she’s seeing a similar trend. “While there’s a lot of emphasis on being digital, once digitally native brands are investing into physical spaces” where customers can visit, explore, and connect with brands, Tan said while speaking on a panel last week. She added that these are not just “any physical retail stores” but spaces where customers can have a unique and memorable experience. “Brick and mortar is so different now, it's no longer just four walls and merchandise,” she noted. Motherswork, the luxury mom and baby brand acquired by The Parentinc, for instance, provides a personal shopper service both in-store and virtually, which customers can avail of via phone or video call. See also: [The Parentinc bets big on offline retail with Motherswork acquisition]( Indeed, a [McKinsey report]( found that customers increasingly want retailers’ physical and digital offerings to be consistent and seamless. That could mean being able to switch between both channels to compare prices, earn and use loyalty points, and find and purchase items. The Parentinc group CEO Roshni Mahtani Cheung told Tech in Asia last week that its [acquisition of Motherswork]( would combine the data that it already has on millions of community users with Motherswork’s strong existing offline footprint. The acquisition also expands the reach and distribution of The Parentinc’s two direct-to-consumer brands. Expanding offline isn’t without its costs though. High capital expenditure and lower gross margins that come with operating a retail space will be some of the trade-offs. That’ll be at the back of Cheung’s mind as she seeks to hit US$74 million in revenues in the next three years and maintain positive [EBITDA](. For now, Cheung is optimistic. As she summed up, “If you do a brand that is just online, you are limiting yourself to only a 20% target market share. If you want to be a big brand, you must go offline.”  ---------------------------------------------------------------  NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ [Temu’s most loyal shoppers are actually Boomers and Gen Xers]( According to data from research firm Attain, baby boomers on average placed about six orders over 12 months - double that of Gen Z shoppers. 2️⃣ [China launches a security review of Shein. Here’s what it means for its IPO]( The Cyberspace Administration of China is reviewing how the fast-fashion firm handles information about its staff, suppliers, and partners and wants to make sure that its data doesn’t leak overseas. 3️⃣ [Amazon fined by French watchdog over employee surveillance]( France’s data protection agency fined the US ecommerce giant for an employee monitoring system it deemed “excessively intrusive.” 4️⃣ [Indian beauty ecommerce startup nets $4.2m in series A round]( Through BuyEazzy’s platform, small neighborhood shops and salon owners can set up their own online stores within five minutes. 5️⃣ [Groyyo secures $5.4m in debt financing to boost manufacturing automation]( The India-based B2B platform connects small businesses, particularly those in the textile and apparel manufacturing industry, with manufacturing solutions so they can scale. --------------------------------------------------------------- That’s it for this edition - we hope you liked it! 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