AT a time when parcels were the domain of businesses and consumers mainly went to postal offices for their delivery affairs, the opening of Mail Boxes Etc (MBE) in Malaysia was, in some ways, ahead of its time.
But Brian Chow somehow deemed it appropriate to open up retail access for the local courier market then.
Newly returned from the US in 2001, Chow says the kind of accessibility between the courier guys and consumers was not yet available here.
“But I was used to the convenience of over-the-counter courier services in the US. When I came back here to work, I realised there wasn’t a place that I could go to for my courier needs. You had to go to the individual courier companies which were not very accessible. A lot of them were out of the way,” he says.
MBE’s principal business involves mailbox services, packaging, shipping, photocopying, and printing services, typically catering to local entrepreneurs and SMEs. Its outlets are often found in areas that are easily accessible to consumers such as shopping malls, petrol stations and shoplots.
This enables consumers to have easy access to courier services and at the same time, provide courier service providers with retail access to consumers.
So six months into his job, Chow decided to court MBE and bring the franchise here.
However, trying to convince an established company that he could manage and grow the MBE brand in Malaysia proved to be a challenge – he was a 21-year-old with no track record.
Negotiations took awhile and in that time, Chow had to prove that the Malaysian market was indeed ready for such a service.
“In the early 2000s, the e-commerce boom was already happening in the US. That was why MBE was successful there. I could see it eventually happening in Malaysia and there will be a need for a one-stop centre that provides courier access, packaging services and such,” he shares.
Chow finally obtained the franchise licence in 2003. He opened his first outlet in Desa Sri Hartamas, Kuala Lumpur.
But his work was not as cut out as he’d thought it to be. Although MBE was a franchise business, its operations was not as straightforward as following the guide book. It needed a lot more localisation.
For one, he had to negotiate his own agreements with various courier partners for the local market. Additionally, he found it difficult to maintain the standard store size of 1,200sq ft if he were to expand into high-traffic retail areas.
Retail space was just too expensive, he stresses.
Chow had to find a way to compress its offerings for smaller spaces without having to sacrifice on its quality or the type of services it could offer.
“Now, our outlets can range in size, right down to 500sq ft or even kiosk space at petrol stations,” he says.
MBE mainly handled courier of parcels and documents for small businesses in its early days. It wasn’t easy trying to convince consumers to use its services and it was even harder to get franchisees onboard as people weren’t sure what the business was all about, recalls Chow.
MBE’s big break came about five years ago when e-commerce started taking off in Malaysia. There were more small businesses and consumers that needed easy access to courier services and this gave MBE a boost.
The golden era Chow had been waiting for since the start of his business was finally dawning.
“We were initially opening about one to two stores a year. But after 2013, we were doing 10-15 outlets a year. And last year, we opened 18 outlets,” he says.
To-date, MBE has 92 outlets nationwide, 91 of which belongs to franchisees.
Following the growth of the e-commerce space, Chow is projecting growth of 7.5%-9% for the company over the next 10 years. He also hopes to see at least one new opening every month.
MBE turned in RM30mil in revenue last year.
“There is still a lot of pockets of opportunities for MBE to explore, such as new locations outside of the Klang Valley,” he says.
He adds that with its increasing number of outlets and a growing demand for on-demand delivery services, MBE could potentially provide consumers and e-commerce businesses with more centralised pick-up points. It is already in talks with some on-demand delivery service providers to grow in this segment.
MBE is now standing on a good foundation thanks to the development in the market, remarks Chow, which has made it more relevant to consumers and courier companies.
He says the company will also look at expanding into the Singapore and Indonesian markets once it has build a stronghold here.
A new chapter
Earlier this month, local courier company GD Express Carrier Bhd (GDex) announced that it would be acquiring MBE Malaysia for RM5.5mil.
GDex’s plans earmarked for MBE will revolve around increasing efficiencies of the company, forming a digitised platform, improving accessibility, and potentially become package drop points for GDEx.
Chow adds that MBE will be able to leverage GDex’s expertise on product innovation and on its facilities to expand its offerings. This will help it grow even further.
However, the acquisition also spells an eventual exit for Chow.
He will stay on as adviser for MBE for at least two years upon the completion of the acquisition at the end of the month.
He hopes to see MBE grow into an established network of 300 outlets and opines that GDex is better equipped to take MBE to the next level.
“I think I have given enough to bring MBE to where it is today. But I may not have the tools or resources to bring it to the next level. We are used to having a lean model. I only have six employees at our headquarters who are supporting our network of franchisees. So, to expand, there has to be a stronger team.
“I am proud to be able to come this far. Building a network of 92 stores is not easy, especially when you have to build the brand from ground-up and you have to localise a lot of its aspects to suit local demand. It was a huge burden,” he notes.
And in all honesty, Chow, now 38 years old, is glad to be able to pass that baton of growing MBE on to a bigger company. Not many small businesses have that kind of opportunity.
Over the next two years, he will focus on helping MBE adapt to a new company culture and smoothen out communication between MBE’s franchisor and GDex.
In the meantime, he hopes to spend more time with his family while keeping an eye out for any other opportunity that may come along. There’s no telling what he’ll do next. Who knows, he may even give employment a try.
Interestingly, it was Chow’s eight-year-old son who protested the sale of MBE.
“He grew up here, you see,” he laughs.
But Chow reiterates that it was time to hand over the reins.
“It’s in the best of hands.”
The e-commerce boon