Exclusive: Koala launches in Japan

Heather McIlvaine

17th Oct 2017

Online-only mattress company, Koala, is making headway in Asia, with its launch in Japan two weeks ago. 

This brings Koala’s global footprint up to three international markets, following the company’s launch in Hong Kong in February and New Zealand last year.

Operations in Japan have been “up-and-running” since the beginning of October, according to Koala’s head of communications, Matthew Overington.

“We launched the website, we’re making sales and fulfilling orders. The response has been positive so far,” he told Internet Retailing.

Overington said the Japanese site has almost the same volume of traffic – but not sales – as Koala’s other markets, including Australia.

“It’s early days, so we’re ramping up,” he said.

The company, which is led by a local country manager, currently offers next-day delivery to customers across Japan and is actively working to make faster delivery possible.

Koala’s signature four-hour delivery service will likely launch in Tokyo to start, with expansion into other major cities later this year, according to Overington.

The move was funded by a recent $10 million investment from Silicon Valley-based debt financier Partners for Growth.

This marks the first outside investment in Koala, since Australia cricket captain Steve Smith provided an undisclosed amount of seed money in 2015.

Besides growing the business in Japan, Koala plans to use the $10 million from the Series A funding round to enter new markets and expand the range of products it offers beyond mattresses and pillows, to include linens and furniture, such as bed bases.

“Basically we’re looking for the next stage of growth for the business,” Overington said of the investment.

“We solicit funding to accomplish the next round of business goals, and it’s tested against our performance and vision for the future…[Funding] is off the back of strong confidence that we’re on the right track.”

That confidence is largely thanks to Koala’s data- and research-driven approach, according to Overington.

For instance, the company didn’t take the same mattress it sells in Australia to the Japanese market. It designed a new, slightly firmer mattress specifically to appeal to Japanese consumers’ sleep preferences. 

“Everything we do is research-led. We think very carefully about the nuances of each market,” he said.

Some nuances, however, are hard to predict. Overington noted that consumers in Japan have made far fewer customer service calls than consumers in Australia did at launch. 

“Perhaps it’s a cultural difference, or representative of the fact that we have all the information they’re looking for on the site,” he suggested.