How tech startup in South Korea expands its business into Japan, Europe with paper furniture?

Have you heard of paper furniture, a global favorite?

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This sentence alone raises a lot of questions. What is paper furniture? What does selling paper furniture look like? How to expand this business to a global market is uncharted territory. That's why the challenge PaperPop founder Daehee Park is taking on is so unique and meaningful. 

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PaperPop started as a project in 2013, making beds, bookshelves, etc. using solid paper. In 2018, when he started working on the business in earnest, Park faced customers with his paper products, such as paper holders and paper desks. The customers were puzzled.

"Paper furniture, isn't that too fragile?"

Despite this stereotype, PaperPop's paper products gradually made a name for themselves. By 2023, sales had reached KRW 1.9 billion, and now PaperPop is taking its paper products to international customers. 

How did paper furniture win the hearts of customers, and how did they expand to global markets? Here's the story behind the brand which is going dip into various markets.

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People making furniture out of paper for over a decade

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Q. Greetings! Please introduce your company and yourself first. 

Hi. I'm Daehee Park, the founder of PaperPop. 

PaperPop mainly makes products for single-person households, such as paper bookcases, paper beds, storage boxes, and organizers. We also make desks for offices, interior items, and products for pets. 

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Q.Furniture made of paper... Is there a particular reason why you choose to make paper products?

PaperPop products have something in common. They are designed to be used by customers for a short period of time, which is in line with our mission. 

From a resource circulation perspective, we believe that the most effective products are those that can be recycled after a short, temporary use cycle. In fact, in 2022 alone, PaperPop was certified to save 1300 tons of resources. 

Ordinary furniture is usually made of MDF and synthetic PB materials. Once it is used and discarded, it is usually disposed of in two ways: landfill or incineration. Paper products made by PaperPop can be recycled up to 95% or more. We are constantly developing products to meet this need.

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Q.You have such a wide range of paper products. How do you get your ideas?

One of the most recent items we developed is a cat toilet product. 

A typical cat household will have two toilets for each cat. The plastic tubs are either for long term use, or for attachment. There's an extra one or two for temporary use. Cats won't relieve themselves in a dirty bathroom, so we often add a temporary toilet when we're away for two or three days.

However, buying a plastic litter box as a temporary box is not only hard to dispose of, but also not easy to dispose of once used.

Therefore, the need for a paper toilet for temporary use came first, and we made it into a product. This new product was born from a customer's idea that it was annoying to buy an extra plastic box for an extra toilet or when leaving the cat for a while, such as at the hospital. 

Consumers also expressed a need for paper shelves or a paper desk to hold baby items, so we got the idea based on consumer response.

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Scaling paper products into a business

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Q. It seems that there are more diverse paper furniture ideas than I expected. How did you start your paper furniture business?  

I worked in a packaging company for four years. One day, I happened to see paper furniture or exhibition structures made of paper overseas. Then I realized that there was no such attempt in Korea yet.

Thinking that I could make similar structures, in 2013, my first business (as a sole entrepreneur) was to produce paper bookcases. Little by little, as the products became more advanced, they began to sell.

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Q. So PaperPop started as a side project at first.

It wasn't until 2018 that we officially incorporated as a paper product company. I met underdogs at KT Imagination Camp, a program that helps social ventures establish their mission, vision, and corporate values. Then, in 2018, we launched our business in earnest and have been in business for over five years.

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Q.Why didn't you establish a formal corporate entity right away?

At first, it was more of a business opportunity than a mission or vision for a company or brand. I thought I would try to sell paper products. 

Then I realized that I was making and selling post-its, stationery, outsourcing boxes, and everything else. After three or four years of freelancing for whatever I could get paid for, I wondered.

'Is this really the right thing?' 

So that's why I applied for a startup training program. In 2018, I went through the underdogs training program. PaperPoP was incorporated in order to properly scale the business.

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Q. Have you actually solved the problem of 'is this right'? 

In my entrepreneurship training, the most common questions I was asked were 'why should I do this' and 'why can my team do this'. 

When I focused on that, I finally understood that if you don't have a mission and vision, you can't answer the why. 

In the beginning, PaperPop had a slogan, "A fun place to fold paper," and in the process of adding the why, we started to think about eco-friendly values and what kind of product would have those values. 

At the same time, it became clear what PaperPop shouldn't do. For example, we decided not to use paper materials that are used once at festivals, exhibitions, etc. and then thrown away, which requires landfill or incineration.

When we were questioned about why we needed to make the product out of paper, we learned how to answer that question through our entrepreneurship training.

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Q.What was your actual answer?

There were three main points of persuasion. I mentioned the mission of protecting the environment, so I'll start with the second point. 

The second point is that paper products are competitive in price. Of course, PaperPop products are not meant to be cheap, but it is a material that can be produced in large quantities at a relatively low cost (compared to the same product made of other materials). 

The third selling point is that traditional furniture is heavy, it's not easy to DIY from a user perspective. It's expensive to ship. It's usually thrown away whenever you move.

There are statistics showing that less than 5% of furniture is recycled. Because it's a non-recyclable material, you have to pay to dispose of it, which is a hassle. Paper products have the advantage of eliminating this pain point.

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A competitive differentiator for paper furniture: mass production

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Q.Paper products seem to have a unique value proposition. But I don't think I've seen paper furniture very often. Is this an emerging trend?

If you go back in time, paper furniture was used to build shelters during the devastating East Japan Earthquake. You can also mention architect Frank Gehry's cardboard models from the 70s or the Korean paper crafts of the Joseon Dynasty. After World War II, when supplies were scarce, highchairs were made out of paper. 

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Q.Paper products have been around for longer than I thought. What are the competitive differentiators of PaperPop? 

Paper products can be made in three main methods. In the past, gluing and origami were the main techniques used. The downside of these methods is that they are difficult for mass production and creation of products. 

For example, if you want to make a piece of furniture using origami, you have to fold a huge sheet of paper, which limits the structure and type of product you can build. If one side of the paper is damaged, you have to throw the whole thing away, which makes the product expensive.

PaperPop chose to approach it with connectors. Until then, there were no screws or nails that were suitable for paper products, so we developed and mass-produced our own screws and nails for paper furniture.

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Q.You invented the connecting materials for paper products...! That's interesting. 

My experience working for a packaging company before starting my own business helped. 

Paper is never a cheap material, but there's one reason why it's a popular material for boxes : Mass production.

So we focused on developing our technology to make it easy to manufacture and produce in high volumes. 

We even designed our own production robot (to reinvent the wheel). It's difficult to scale up production with traditional methods like gluing or folding paper. In 2023, PaperPop produced and sold more than 100,000 products. Without mass-production robots and automation, we wouldn't have been able to do that.

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Q.To summarize, the connectivity method and production automation system make mass production possible.

That's why the price of PaperPop products can be quite economical. 

If you search for paper furniture overseas, the price range is higher than you can imagine, reaching 100,000 to 200,000 won. On the other hand, PaperPop's products are almost one-tenth the price.

The investment from venture capitalists (VCs) such as Blue Point Partners was directed toward the development of mass production technology. 

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How to change the stereotype of paper furniture

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Q.It must be tough to develop your own technology and system. What was the most challenging part?

The manufacturing and mass production areas were not difficult because we already had experience and know-how in those areas, but the most challenging part was setting the vision of the company and actually selling the product to consumers. 

There is a bias against paper furniture: it's paper, so it must be cheap, it's paper, so it must be weak, etc. Because of these stereotypes, it takes time for consumers to accept paper products.

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Q.How did you break through the stereotypes of paper products?

In the early days of our business, we often received reviews like the following. 

'I got a delivery box and there's a box inside a box.'

In 2019, we introduced a paper bed. By chance, the news that paper beds were used at the Tokyo 2020 Olympics went around, and the keyword "paper products" became viral. This gave consumers their first exposure to paper furniture, and the perception of the product gradually changed.

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In the course of giving my opinion on the news, I also had the opportunity to appear on TV, which allowed us to spread the word about PaperPop.

At first we developed the product because we assumed "It would be nice to make a bed" but this idea combined with external factors, such as the Tokyo Olympics, helped the company take off. 

Nowadays, there are more reviews of the paper furniture itself, such as 'Is it really eco-friendly?' or 'It's easy to assemble,' etc. I feel that the perception of paper products has improved a lot. 

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Q. How did you initially figure out how to sell your products?

At the beginning of our business, we couldn't afford to spend much on marketing (because we were just starting out), so we used crowdfunding platforms a lot. We've done 35 crowdfunding campaigns so far and raised about 300 million won. 

In the early days of the business, we were constantly testing MVPs and looking for early adopters, backers who were interested in each product.

In 2018, we expanded our product sales and marketing activities in a big way.

Until then, we usually raised around 10 million won. For the first time, we tried to launch three products on the crowdfunding platform for a month at a time. Thankfully, the response was positive. I guess it was because we stepped away from the clunky paper furniture and tried different colors for unique products.

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Q.I heard that paper products are sold not only in B2C but also in B2B. 

In the past, exhibitions and event constructions were mainly made of materials such as MDF, plywood, foam board. As a result, it is estimated that nearly 10 tons of waste is generated after one event, which cannot be recycled. 

The trend was there even before COVID-19, but I believe the pandemic has definitely changed the public's perception. Recently, we've seen an increase in B2B requests for exhibition, event, and festival supplies.

One of the reasons for this change in perception is the advancement of technology. Ten years ago, we couldn't process paper as strongly as we can now, so there wasn't a lot of resistant paper produced. However, as paper processing technology has improved, the global trend is toward paper furniture and other products.

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Expanding the paper furniture business to Japan and Europe

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Q.PaperPop was recognized in Japan and Europe in 2023. How did you go about it? 

PaperPop held two Japanese crowdfunding campaigns in 2022 and 2023. The Japanese market is our first target for global expansion. In 2024, we are preparing to introduce a high-back chair to Japanese crowdfunding platforms in time for the cherry blossom season. 

In 2023, we participated in Europe's largest interior fair called Maison&Objet in Paris, France. We only had a small booth, but we received a lot of positive feedback from people saying that the product was beautiful, the price was reasonable, and they were willing to buy it if we could solve the shipping problem. 

Now, we are getting requests for paper furniture not only from South Korea, but also from overseas. We believe that the international market for paper furniture is growing, so we are preparing to enter Japan, which is close to South Korea, step by step.

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Q. Do consumers react differently in different countries?

In France, we received a lot of feedback that PaperPop products were cheaper than expected, but they found it hard to deliver. It's probably because of the distance (from South Korea). 

So we're also considering producing in countries like Senegal, which is located in Africa. We're still in the market development stage, so we have a lot of challenges to face. Local production in Eastern Europe or Africa is one solution in mind.

In the case of the U.S., it is a corrugated cardboard exporting country. For such a distant market, we are considering local manufacturing with a local partner.

On the other hand, in Japan, we are planning a strategy for direct export since it is located close to the Korean production plant.

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Q. In Japan, you actually showcased and sold your product. I'd like to hear how you got started. 

The first funding (for crowdfunding in Japan) was for a relatively bulky desk, so we charged a bit more than in Korea. The total amount of funding at that time was about 4 million won, which was successful. 

The second time, I crowdfunded the same laptop holder product in Korea and Japan at the same time. Surprisingly, the amount of money raised in Korea and Japan was similar, around 10 million won.

The difference (in each market) was that the 15-inch product was usually the most backed in Korea, while the 13-inch product was mostly funded on the Japanese platform. I could tell that they were different markets despite the similarities.

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Q. Recently, there have been many startups that want to enter the global market. Can you share your experience with PaperPop's global expansion?

In Europe, I assumed that the market size would be large, but it was quite fragmented. Each country's market is different, and the quantity of orders is varied.

The German and French markets can be regarded as relatively large, but their needs are so diverse that it's not easy to have a one-on-one consultation. We have to devise a strategy that fits the overseas market, such as local production. 

Currently, we're knocking on the door of the Japanese market first. There are already paper furniture companies in Japan that have been around for over 50 years, so the perception of paper furniture is definitely positive.

At the same time, I believe that we can distinguish ourselves from existing paper furniture companies in Japan.

For instance, traditional paper furniture companies in Japan prefer the origami method, so the price of existing paper products is high or they have their own limitations. We are looking forward to opening the door to the Japanese market by leveraging PaperPop's strengths. 

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Q. Especially nowadays, many founders are considering entering Japan. Do you have any advice on what they should keep in mind when expanding into the Japanese market? 

When entering Japan, it takes a long time for conversations to take place.

Even if you want to go directly to the market, you have to collaborate with existing ecosystem stakeholders such as vendors. There are several steps to communicate with them, so you may get the impression that the market is relatively slow. 

There are also a lot of variables in product pricing (when going overseas), so PaperPop is still trying to figure it out.

We are focusing on our Korean customers first. As we prepare for the next round of investment, we will show references for global expansion and put our weight on international markets from a long-term perspective.

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Q. What are Paperpop's plans for the future?

Our short-term goal is to achieve sales of 4 to 5 billion won in the domestic market and steadily expand into global markets.  

In the long term, we dream of a world where all 8 billion people on the planet use paper furniture. 

If 8 billion people purchase one or two pieces of furniture in their lives, we can estimate that more than 8 billion pieces of non-disposable furniture will pile up somewhere on the planet. 

PaperPop wants to make sustainable products that can be recycled for the next generation.

To create a world where 8 billion people use paper furniture, we need to develop products with a variety of designs. That's why we introduce a new line of paper products every year. We want to do our best to spread paper furniture beyond the Korean market and make it more accessible in overseas markets.

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Written by Jinny (Underdogs)

UNDERDOGS ORIGINALS‍