In The News
January 2, 2008
Christopher Exline, President and CEO of Home Essentials, says starting the company in Hong Kong was the best business decision of his life
Christopher Exline exemplifies the can-do spirit for which Hong Kong is famous.
The American entrepreneur from Dallas, Texas, set up furniture rental company Home Essentials in 1998, a move he says was the "best decision of my corporate life". Despite some setbacks along the way, Mr Exline has always found a way around them.
Today, Home Essentials operates in 16 locations, with seven more to open in 2008. The business has diversified into three distinct divisions, and is currently in a record growth phase. How did he achieve it?
Mr Exline was on vacation in Singapore when he met an expatriate couple on an overseas posting. The couple relayed their frustration at having to buy household electrical appliances to use in Singapore, which would be useless back in the US where the voltage is incompatible. He asked why they didn't just rent those items, to discover that no such service existed.
Spotting a market niche, Mr Exline knew he could either return to the US, or start a rental company. Knowing Hong Kong was "fantastic for business", he settled on the latter.
Vibrant regional hub
"I cannot think of another city in the world better suited for our corporate headquarters," Mr Exline said. "The city works, its people work, and there is a passion for achieving. The government also knows where and when to get involved. Certainly, Hong Kong has issues such as the high cost of doing business, and pollution. But the positives far outweigh these - the positives being a transportation system second to none, an educated workforce, freedom of expression, the rule of law, protection of property, and a business-minded government."
Mr Exline also credits the Hong Kong Trade Development Council (HKTDC) for actively promoting Hong Kong as the world's gateway to China - especially via its Dubai office, which was "very proactive in contacting our office and wanting to assist us".
"The HKTDC is out in front to assist companies in the Middle East to learn about sourcing from China, and they stand with Hong Kong based companies to maximise the limitless benefits of Hong Kong," he said. "Their role in publicising how trading through Hong Kong is the most efficient and cost effective conduit for accessing China is invaluable."
Like many entrepreneurs, Mr Exline says he "did not know much" in the beginning, but was confident the idea would work, and had experience in the US with the concept. The business started "very much in the Hong Kong way: you go after your goal with all your heart, and you never quit". Of equal importance, he says, was identifying the core business and with that his core customers. "You have to be clear in defining who you are. Far too many great ideas are ruined by panic reversals or drastic changes that actually abandon the tenets of the business model."
Overcoming challenges
The company made a strong start, but was in trouble within six months after Mr Exline "chronically underestimated the amount of cash a leasing business would consume". Ignoring advice to change course, he held fast, and the business soon rallied.
For the first three years, the company operated only in Hong Kong and Singapore. In 1999, Mr Exline made "the worst entry into China in the history of business" - it was such a failure, he says, it nearly brought down the company.
Mr Exline learned that many ideas seem logical on paper, but may fail to resonate with the customer base. "Other times, you stumble on something that exceeds any forecast," he says.
Regrouping in Hong Kong, he later opened a satellite office in Kuala Lumpur, to test the market. "We opened in 1998 with so many mistakes that we adopted a survival mode to clear them and learn from them," he said.
When Sars hit in 2003, alarm bells rang, and Mr Exline realised his business was far too exposed to one jurisdiction. At the same time, America announced its plans for post-conflict Iraq. "The proverbial light bulb went on," he said. "The scale of this work would involve thousands of expatriates, and no-one would want to move their goods to Baghdad - so there would be a need for rental furniture."
A growing network
Home Essentials' Dubai office opened in September 2003, and since then has expanded to other countries in the Middle East including Iraq and Afghanistan. This was augmented by expansion into Europe via acquisitions.
The company now operates in cities as far flung as Milan, Beijing, Barcelona and Bombay. In 2008, it will open offices in Casablanca, Wuhan, Kuwait City, Delhi, Khartoum, Almaty and Paris.
The business now has three divisions: Home Essentials, which rents, hires or sells furniture in various markets; Continental Sourcing (its largest division), a trading company which sources China-made custom furniture for hotels, restaurants, serviced apartments and commercial buildings; and Hacienda Parks, the newest division, which builds housing for labourers and management in the Middle East, Africa and Central Asia.
Mr Exline says he always intended to build the world's largest furniture rental business. "Actually, we are behind schedule. Initially (and quite naively), I thought we would be fully global by this time," he says.
But with current staff numbers at more than 300, and growing to 750 in 2008; and revenue up 120 per cent in 2007 and the same projected for 2008, he says now is "an exhilarating time for the business".
"As Home Essentials enters its second decade, we have an incredible team to propel us into the future. We believe the way forward for the next 10 years is to remain flexibly steadfast in our core values, along with capitalising on our advantages. We have always leveraged ourselves beyond our means, but why not? Why wonder what we could have done? That is not the Hong Kong way."