How Yogibo handled overseas expansion?

Founding Yogibo initially as a way to help his family, Levy has built his business of imaginative pillows, rugs, and furniture into an international brand. By 2013, Eyal Levy had spent four years building Nashua, New Hampshire-based Yogibo into a successful fun-and-friendly lifestyle brand centered on its body-hugging beanbag chairs. The Japanese market tempted him. How could he expand there?

“You want a simple model when things are unfamiliar,” says Levy. Franchising stores would provide the experience Yogibo was known for. But Levy was daunted by the prospect of complying with local franchise laws and monitoring distant operations. The key was finding a local distributor he trusted. To deter all but the most committed, Levy lowered sales estimates and emphasized challenges. After finding a good candidate, Levy spent months getting to know him.

The chosen distributor was the owner of an e-commerce business–but Levy knew online alone wouldn’t cut it. He’d tried that route when Yogibo launched, and soon learned that his product’s appeal was tactile. Customers fell for the chairs by scrooching into them. They also needed a demonstration to understand the product. E-commerce provided neither.

Levy succeeded in the U.S. with a model combining brick-and-mortar outlets, e-commerce, sales at events and festivals, and–chiefly for accessories–wholesale. The aspiring partner agreed. Levy quickly accepted several changes desired by that distributor: adding gift-wrap services and creating a busier website, both ubiquitous in Japan. The distributor also pushed for pop-up stores. At first, “I did not buy it,” says Levy, fearing he’d downscale the brand. But then he visited Japanese malls and saw pop-ups from the blue-chip likes of Lego and Nike.

Another concern: Pop-ups are smaller than stores and don’t carry inventory, so customers can’t walk out with beanbags. But Levy learned that Japanese customers prefer to have their products shipped. Also, Levy realized, with regular stores “the staff has to wait until customers walk inside to approach them,” he says. “With a pop-up, you can smile, and kind of pull them in.”

Today, Japanese sales account for 15 percent of Yogibo’s revenue–which should top $20 million this year–with minimal strain. Levy has duplicated the strategy in Canada, Kuwait, and South Korea: the same rigorous recruitment, the same contracts, the same slightly relaxed attitude toward consistency. Pretty impressive. Try out a Yogibo if you haven’t done so.

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