This episode of The Negotiation features part 1 of our conversation with Arnault Castel. Arnault is the founder of Kapok, a retail experience that focuses on designers and brands whose work provides quality craftsmanship and creativity in design. Arnault has developed an extensive knowledge and understanding of the Asian consumer goods and retail environment since 1996 when he moved to Hong Kong from France. In 2001, he joined the team in charge of the development of the Lomography brand in Asia as the head of Southeast Asian operations. Arnault was also the co-owner and director of Working Unit Limited founded in 2005, the exclusive distributor for the Moleskine brand in Southeast Asia.

In today’s episode, Arnault tells us what brought him to Hong Kong, what made him start Kapok, his curated ecosystem and why customers keep coming back. We also talk about price positioning in the market, how distribution and merchandising happen and the importance of having an entertaining shopping experience for customers. Tune in for more!

Topics Discussed and Key Points:

• What brought Arnault to Hong Kong 
• The Kapok identity and customer base
• Why do customers return to Kapok?
• Arnault’s curated ecosystem
• Price positioning
• Geography and culture's impact on Kapok's identity
• Why the shopping experience for customers has to be entertaining
• Why it's necessary to have both online and offline stores as a brand
• Online shopping's introduction in 2006 and its effects on Arnault's businesses
• Characteristics of successful brands in Asia 

Timestamps 

[00:07] Who is Arnault Castel?

[01:22] How Arnault ended up in Hong Kong

[04:09] A little bit about Kapok and what it does

[04:44] What makes someone a Kapok customer?

[06:10] The reasons behind repeat purchases of Kapok’s products

[10:03] What criteria does Arnault use to select the products and brands for his carefully curated ecosystem?

[12:49] What does it mean to Arnault to “not be Kapok”?

[19:41] How have geography and culture shaped Kapok's identity?

[22:53] Kapok’s customer loyalty in the APAC region

[29:05] What is the origin of the name Kapok?

[33:01] Major evolutions in the APAC region's retail market since 2006

[41:07] What are some of the characteristics that cause a brand to succeed in Asia?