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[Written in partnership with Supernewsroom, but the editorial team had full control over the content.]
After graduating with a degree in computer science and accounting, Eddie Chew began working as a consultant for PricewaterhouseCoopers (PwC). In the meantime, however, he was eager to participate in e-commerce.
But the time was not yet right. After consulting, he would go on to work in private equity in China for 10 years. There, he saw first-hand how e-commerce transformed the Chinese economy.
Even more inspired, he began Potboy food When (Potboy) returned to Malaysia, he chose the fast-moving consumer goods (FMCG) industry because he wanted an anti-recession e-commerce business.
Making orders that people don’t want to do
“Potboy”: It’s not a common term to hear Malaysian, and Eddie was deliberately choosing a business name.
A potboy is someone who works in a bar, usually young. He gives alcohol to customers and washes glasses when finished.
“So I find that name very interesting because potboys have the same characteristics as us, doing what we do right now,” Eddie said.
Basically, this feature is how Potboy does things that others don’t like. Eddie made the parallels clearer, saying, “Everyone needs food. But that being said, not everyone likes to buy food.”
So Potboy takes on this weak task. Another similarity that Potboy and Potboy share lies in their exposure to all sorts of information in their line of work.
While a potboy in a bar may know the trade secrets released by his lips released by alcohol, Potboy’s e-commerce business is able to collect buyer data.
Types of data include the areas in which these buyers usually shop, how much they buy, what they buy, and so on.
This helps in many ways. On the one hand, Potboy’s operations are more efficient because some products have a seasonal impact on demand. Think of the Chinese New Year and the demand for mandarin.
With access to this type of data, Potboy knows when to order a product more or less. Data is also available from Potboy for Nestlé, Coca Cola, F&N, etc. For collaboration and campaign proposals with FMCG brands.
In the future, Eddie hopes that the data collected by Potboy could also benefit these brands based on their production pipelines or customer R&D planning trends.
“Puenting” business model
Taking a look at Potboy’s offerings, there doesn’t seem to be anything out of the ordinary. But what stood out to me was how it was not able to set a minimum order value to still offer free shipping (but on-demand shipping is not yet available).
Wasn’t that a risky business model that would eat up a company’s resources?
Potentially, yes, but Eddie was willing to take that risk because he thinks it creates confidence. When a customer is not tied to a minimum order value and can also enjoy free shipping, they are more likely to be satisfied with the business offer. And even if orders are met properly, they can become returning customers.
That’s the decent thing to do, and it should end there.
“It simply came to our notice then. And it makes sense to keep track of free shipping, because free shipping at the same time recovers costs from our profits, because it brings more profits, ”he told the Vulcan Post.
He calls it a rooted model. We had to ask ourselves, what are the challenges behind taking it?
“This is almost like a bungee jump. You have to have the courage to believe that this chain will hold and bounce. But before that bounce can happen, you have to make that leap. ”
Corporations with standard practices typically avoid this model and its risks, but being a startup, Eddie said Potboy has nothing to lose.
“We’ve been doing this for the last 5 years and we’re still alive, reaping the benefits.”
With this model of trust building, Eddie believes there is no need for a loyalty program. Companies tend to rely on such programs to attract returning customers, but there is nothing more effective than good service to keep your customers.
Fast expansion offline
However, more than just an e-commerce platform, Potboy also has offline stores, called Potboy Mart, as an extension of its business. Not all stores carry the same products, as each has a variety based on the data collected about buyers.
There are also several Potboy Marts in a single area, and Eddie believes this will help increase the brand’s visibility.
Thus, within 8-9 months, they now have 49 operating outlets on the way to the 50th. By the end of this year, there should be more than 50.
It’s a rapid spread, but it almost felt like a setback at a time when everyone else was being digitized. Why move from offline to physical retail now?
Contrary to my belief, Eddie said that having an omnikanal business was Potboy’s plan from the beginning. The pandemic accelerated their plans.
It’s just part of how Potboy can reach out to its customers, building more trust through its store staff and its delivery fleet, which can also lead to quality control.
The products come from its processing center, but if users do not want to wait 3-5 days for delivery, they can buy them online and then pick up the products at the nearest Potboy Mart.
An offline (O2O) model also means that working families can buy online and pick up Potboy Mart food on the way home instead of missing shipments.
Or vice versa, if someone encounters a Potboy Mart while you’re driving, they can come in and buy them, but they can send them for free at a later time / date.
For now, Eddie has shared that they have about 500K users and are growing based on data from the Potboy app.
Overall, Potboy’s growth trajectory is promising, as he also said: “In 2019, we had a main line of RM32 million with a small profit of half a million Ringgit. In 2020, we had a first line of RM 55 million and 1.5 million million RM bottom line “.
“The next goal is to make a net profit of less than RM2 million.”
As the business grows, Eddie plans to continue reinvesting profits to grow the Potboy Mart further. Its goal is to open at least 200 stores in the Klang Valley by the end of 2022, and 1,000 stores nationwide over the next 5 years.
Featured Image Credit: Potboy
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