Ette Tete is a family business that manufactures specialised furniture for children. The company makes easy-to-use, beautiful products designed to make parents’ lives and childrearing easier.
The brand was launched in 2016 when a growing family needed children’s furniture. Thanks to several support mechanisms, the company was able to start its business and become one of the best known exporters in Latvia. Starting within the LEADER project, we received 70% co-funding for the purchase of CNC machines to launch production. After that, we joined the LIAA Business Incubator and went through the incubation programme. Although we were able to develop and grow, it would have definitely been a much slower and more painful process without these support opportunities. The Incubator programme gave us access to various trainings, grants and consultations. I do not believe we missed a single opportunity offered by the Incubator and processed all the information, such as how to use Instagram, price products, etc. the best we could. I think it enabled us to avoid many beginners’ mistakes and focus on developing and growing our business. I can compare our participation in the LEADER project to sowing seeds and in the incubation programme to watering, which paved the way for us to grow and flourish now.
Together with LIAA, we have also participated in multiple international expos. For three years, we were represented at the national stand of the Kind + Juged Expo which takes place in September in Cologne, Germany, and is a leading expo of goods for children and infants. This September, we will also travel to Japan with the Latvian delegation. LIAA co-funding also allowed us to participate in the world’s leading fair for toys, Spielwarenmesse in Nuremberg, Germany.
LIAA co-funding of product certification has also been very significant and useful for us. Currently, the support has been increased and co-funding can reach 90%. Different markets have different standards and products should be adapted to those. In Europe, certification is relatively easy, as a single certificate is valid in many countries. But, for example, when the UK decided to leave the EU, we had to get a new certificate. That means additional costs. Certification of our products for the South Korean market amounted to EUR 6,500, but LIAA co-funding helped us reduce this cost significantly.
The range of support offered by LIAA to Latvian companies is very broad. Although there is some degree of bureaucracy involved, the process, where possible, is simple enough and can be done by anyone. We are very happy with our cooperation and try to use all available tools to develop our company and grow our exports. It’s quite possible that Ette Tete would not have existed without this support.
Today, the company has reached 2.5 million sales and employs an average of 30 employees. More than 99% of our sales are generated by export activities. The company exports its products to many countries using e-commerce platforms and has established permanent partner relationships with businesses in 12 countries, including the Netherlands, Belgium, Italy, Germany and South Korea. About 80% of our exports go through our partners. Our top export destinations are constantly changing. We realised that it depends on our business partners, i.e. the location with the strongest and the most ambitious partner will definitely rise to the top. No so long ago, Belgium was not even close to being in the top three, but with our new business partner it rocketed to the top of our export destination list. Italy and South Korea are also in the top three. Almost all of our partners have found us themselves. Though we have direct cooperation with our partners, the South Korean representative, for example, also works with the local LIAA office which supports us in our communication.
In future, we hope and plan to boost our exports, but it all depends on external circumstances. Ette Tete has not had any significant partners in Russia or Ukraine and the war has not affected us directly. However, its indirect effect is felt through growing raw material prices. Both local and imported raw materials have become more expensive and inflation will bring adjustments to our plans. Nonetheless, we continue working to bring our products into compliance with US standards. We hope to achieve this by the end of the year and begin an active search for partners in the US market next year.
Looking back at the beginnings of the company, I can say that we started our sales with an eye to exports. The company began offering its products on e-commerce platforms, such as Etsy and Amazon, which made them available to international buyers. And that how it happened – the first market where we sent our products was the US. Then, gradually, buyers from all over the world became our customers. Our export markets expanded organically until we were approached by potential partners. They were foreign distributors and sellers who wanted to include Ette Tete products in their own ranges. Our first cooperation agreement was signed with a partner in Italy. So we decided that we should not work only through e-commerce platforms anymore. If there was interest from potential partners rather than just end buyers, we had to become more active and look for steady international cooperation partners.
E-commerce platforms remain one of our customer engagement strategies. Active participation in e-commerce improves brand visibility and awareness. It means more customers. However, when it comes to cooperation, you can no longer sit and wait for a partner to find you. You have to be very active yourself. We are working hard in this respect and now we even employ a dedicated employee for this task. We visit many different trade missions, participate in trade fairs and actively search for new partners.
We have not carried out any new market analyses. We follow what’s going on in different countries and regions of the world closely and mainly rely on our own understanding and knowledge of the markets. We have realised that our products will be better suited to developed countries where consumers have money to spend, as our products are not basic necessities. In developing countries, where price is more important, our products would have a more difficult time. So there is no point in developing these export channels as the return will not be sufficient. This is exactly why I would advise companies planning to develop exports to think about what their product is like, what is being sold and how it is being done. Think about strategy, whether to look for more partners or fewer, but more loyal partners, or for larger distributors or small shops. That can help you to plan and develop your exports.
As for expanding on existing markets, you should carefully consider what the market is like, i.e. how big it is and whether there is a point to looking for new cooperation partners. Sometimes several small, but loyal partners are worth much more than numerous uninvolved partners. From time to time, we have realised that there are multiple partners on the market who are in fierce competition with each other. That affects the product and the partner becomes dissatisfied and complains to us. Competition is necessary to promote growth, but when it is too fierce with high partner density, they fight for their place at the top and you lose their loyalty.
And so we come to the key behind our export success. Of course, first and foremost it is due to our products, which in the first 5 years of our business led the way because no one else was offering anything like them. Secondly, customer service for both e-commerce buyers and international partners. We make every effort to make sure that our cooperation with the manufacturer is friendly and smooth. We want our partners to know that as a manufacturer we will give them all the necessary tools to help them sell more of our products. This is how loyalty is created, and we believe that it is very important.
You shouldn’t expect to come home from a trade fair with a bunch of new customers. That’s not how it works and you cannot count on that. You have to try different ways to reach your export destination to see which one will work on the specific market. A trip to a trade fair may be enough for one, but on another market you may have to find a partner yourself.
Of course, both when launching exports and working on or expanding our existing markets, we have come across all kinds of situations and obstacles. We could hold an entire separate seminar on failures, mistakes and recoveries, as well as coming a step too close to bankruptcy. As one example I can name bad pricing, which was a very unpleasant experiment. However, with persistent and relentless work, we managed to overcome all obstacles.
Although the overall range of support offered by LIAA is very broad, we believe that tailor-made support events are also necessary. They are not available now, but they will be very useful given that businesses in Latvia are very different and have very different goals and needs. This way, more companies will be able to receive exactly the support they need for better development.