Changing consumers’ buying behaviour


Brand story: Chang says story-telling has been crucial to its business model from day one.

New shirt brand hopes to reduce prices and wastage with a different business model

OVERSTOCKING and expensive shirts that don’t fit. These are some of the issues that bother Oxwhite’s Chang Chee Keong, 39, when it comes to the garment industry.

“It is expensive to get a well-suited shirt. You either need to get it tailor-made or get it from a high-end brand. The high-end brands are usually highly priced and often don’t fit the Asian physique. Most times, they need alteration. And if you go to an Asian brand, usually the quality don’t meet your expectations,” says Chang.

Another problem prevalent in the industry is over-inventory. High street brands tend to produce excessive quantities, most of which end up being disposed of.

So when Chang decided to make shirts two years ago, he looked for a business model that would address these pain points.

The way to do this, he opines, is to use a pre-order model. This would not only reduce its cost for storage and inventory management, it also ensures that every shirt made is bought.

After spending some time learning about fabrics and how shirts are made and sold, he launched Oxwhite last June. Fingers crossed, he would be able to gather enough pre-orders to meet his minimum order quantity.

Demand turned out to be better than he expected, considering that wait time for orders to be fulfilled is four months and it wasn’t as common for men to buy their clothes online. Chang thought he could really be on to something.

“Based on the trend we’ve observed, we’ve been getting good reviews for our products. So we believe with a good product at a good price, we can scale this business,” he says.

Oxwhite mainly produces white shirts, priced between RM69 and RM99. Customers would place their orders on the website and receive their purchase three to four months later.

Its shirts are made by a manufacturer in Indonesia which also produces for various international brands, Chang assures.

Oxwhite is about combining the big brand experience with Asian pricing and physique, he adds.

To-date, the brand has sold some 30,000 shirts to over 13,000 customers.

Margins are, understandably thin or non-existent, at this price range. But Chang is unperturbed. He wasn’t expecting to pocket anything in the first year anyway.

“We are not looking at the profits in the first year. We want to focus on benefitting the customers first.

“We are trying to change their buying behaviour. The market doesn’t need another brand. How we stand out is by having a niche business model. Our products are essential type of products. We focus more on form and function rather than style and fashion. And we have gained good traction with this.

“We want to also be socially responsible and not excessively over-produce. So we are staying lean with the pre-order model,” he says.

He expects profitability to kick in later in the year once they are able to increase their customer base from 13,00 to 50,000 people. He is looking at a customer retention rate of 75%.

One of the factors that will help boost Oxwhite is its engagement with consumers to develop new products.

Chang says they get a lot of feedback from customers who have bought their products and were able to make adjustments in future production runs, where needed. Oxwhite also receives a lot of queries for other products such as women’s shirts and shirts in other colours, which enable the company to gauge consumers’ interest before a new product is designed and launched.

This differs from a typical brand where the product range is decided by a small group of executives.

The consumer-to-business direction is the new trend in today’s business environment, he notes.

Another trend that will benefit Oxwhite, says Chang, is a growing interest by millennials in non-conventional brands.

“Millennials in other markets are already choosing products above brands. They are looking at other things like quality, reviews, customer experience, company story and transparency. So there is an opportunity for us to be a brandless brand,” he says.

He believes that Oxwhite has a good story to share, which will help with building customer loyalty.

“The story telling part has been crucial to our business model from day one. Why buy from us? Because we are different. We can make an impact on the environment and on your wallet. We want customers to buy into our story before they buy into our product, that looking good need not have to be expensive,” he adds.

Oxwhite will also be launching white shirts for women at the end of February.

This year, he also plans to introduce other essential products such as undergarments, shoes and bagpacks. But he will only move into developing other products if he is able to tap into a network of people who would be able to provide him with good advice and expertise for each product type.

“My role, is to connect relevant people for product development,” he says.

He hopes to raise some funds through venture capitals or strategic partners to help the company expand regionally. If it doesn’t move fast enough, other players may fill the gap it hopes to cover.

A deeper pocket may also help reduce wait time for its customers.

The main reason for the long wait is due to the significant time it takes for them to purchase raw materials for their orders.

“We order fabric from the US and have them sent to the factory in Indonesia. By getting financing, we can pre-purchase the raw material, which takes up 60% of the time.

“We are using our own money to validate the business model, so we don’t have spare cash to get the materials. But pre-purchasing materials can help reduce the wait time to two months,” he shares.

He is also mulling pre-producing 20% of its products for customers who just can’t wait the full four months. These will, of course, cost customers a little more.

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