Online business models go through changes too


By JOY LEE

RPG Comerce CEO Melvin Chee: This new-normal created by the societal reaction to the pandemic will create an upward trend that will even continue post-pandemic, and we believe it is a perfect opportunity for DTC brands to strengthen their foothold among Malaysian consumers as a more viable choice than big traditional brands."

THE Internet has become a launchpad for many brands and businesses – more so in the past one year.

But e-commerce opportunities have helped mint many entrepreneurs like Melvin Chee long before the recent rush to go online. Back then, he had dabbled in the online business out of curiosity and just to make a little side income.

Chee, the chief executive officer of RPG Commerce, first got involved with e-commerce while he was still studying in Melbourne, Australia.

“Growing up in a small town in Perak, I had very limited Internet access during my high school days. When I first arrived in Melbourne, I was totally fascinated by the way people were transacting and selling over the Internet and that made me see the amazing potential in this space, which further ignited my passion for the industry.

“But back in my university days, all I intended to accomplish was really just to earn some extra pocket money for entertainment and travelling purposes, ” shares the 28-year-old.

While he had little comprehension of the whole online deal, he was rather resourceful.

With limited capital, he found a creative way to learn digital marketing.

He took up whatever free courses that were available at the time and began freelancing as a “marketing expert”.

“In truth, I was a digital marketing novice making the most out of my clients’ marketing dollars to gain experience in return, ” he admits sheepishly.

Chee managed to convince mom and pop stores to allow him to deploy Google Ads for them. When he saw that his efforts led to increased website traffic for these independent businesses, he knew he was onto something.

He further looked into consumer buying habits and expanded his digital marketing services to include social media platforms.

Not long after, he decided to go down the route of a retailer, which would give him more insights into consumer trends.

But with no products of his own to sell, Chee started off his venture with dropshipping under RPG Commerce.

Dropshipping is a retail business where the retailer does not keep stock of goods sold.

“Dropshipping was the ideal business model to start with, as it had the lowest starting capital and highest reward during that period of time, ” he says.

Notably, the e-commerce landscape then was vastly different from what it is today. Chee points out that back in 2013, a new generation of consumers was just beginning to explore new avenues of shopping and retailers were only starting to provide that additional channel through social media platforms.

With some hard work and a stroke of luck, Chee earned his first six-figure revenue within three months during a semester break.

Within two years, RPG Commerce amassed US$15mil in revenue.

However, Chee notes that dropshipping does have its cons. While the company can leverage the right marketing strategies to yield a good revenue stream, RPG Commerce would have no control over the product and supply-chain quality.

“The high competition in brands but the low variance in products also makes it incredibly difficult to sustain brand loyalty from consumers.”

Subsequently, RPG Commerce moved into a new model – a direct to consumer (DTC) model – which would enable the company to have full control of all the processes related to getting a product out to market, from product conception to execution and all the way to fulfillment.

“This has since been a proven model for us to deliver excellent value and services that exceed the expectations of our customers, ” he says.

Currently, all the products and brands under its portfolio are developed in-house through product designers with production outsourced to partners.

“Before pushing new products out, the first step is to meticulously do our market research and also use our previous customer insights to identify gaps where we can further improve on delivering value.

“Once our product designs are finalised, our amazing team will cohesively work with each department to ensure the supply chain management, marketing, and fulfillment of the product will sufficiently satisfy our customer’s needs, ” says Chee.

According to him, the group is developing brands across different categories and markets for now and does not restrict its interest in a particular product category.

RPG Commerce owns nine brands currently and serves 40 markets globally, with the US, Europe, the UK and Australia as its top countries. It operates out of Malaysia.

For sure, the shift in its strategy has served the company well.

While the majority of businesses were affected by the Covid-19 pandemic last year, RPG Commerce enjoyed a four-fold growth from 2019.

Last year, the company turned over an eight-figure revenue in USD.

And with a greater migration to online expected in the days to come, there is a bigger potential market for the company to tap into.

“With the economic decline caused by the pandemic, the Malaysian consumer has learned to turn towards more economical and unique solutions to their wants and needs.

“This new-normal created by the societal reaction to the pandemic will create an upward trend that will even continue post-pandemic, and we believe it is a perfect opportunity for DTC brands to strengthen their foothold among Malaysian consumers as a more viable choice than big traditional brands, ” he says.

Chee also credits his team’s resilience in the past year as it launched new brands and products throughout 2020, leading to the group’s enormous growth in revenue.

He adds that the company would continue to innovate in the DTC space, be it through their in-house brands or through new acquisitions of other brands that are currently in the works.

With the upswing in the market from the vaccine rollouts,

Chee believes there is a perfect opportunity for the group to achieve its goal of growing revenue by another three to four times this year.

RPG Commerce is aggressively hiring at the moment as it works towards bigger plans for 2021.

The team grew from 20 a year ago to just under 100 at the moment. The company intends to double its headcount this year.

RPG Commerce also recently closed its Series A round with a renowned venture capital based in Singapore.

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