Good turn of events


By JOY LEE

Edwin Wang Signature Market Founder

THE uncertainty and fluidity of the past one and a half years would have thrown many companies off their planned path.

With new daily Covid-19 cases fluctuating, supply chains snagged and standard operating procedures changing, businesses may have had to curtail expansion plans to conserve resources – or for some, digitalisation plans may have been accelerated.

While this change in plans may affect longer-term capabilities, for others like health snack retailer Signature Market Sdn Bhd, the tweak turned out to be a blessing in disguise.

The pause in its expansion plans, says founder Edwin Wang, enabled the company to focus on its local operations and finally turn in a profit. “Before the pandemic, 2020 and 2021 were supposed to be the years we expanded overseas. But due to the pandemic, we delayed our expansion plan and focused on optimising the Malaysian unit. This resulted in us breaking even in 2020 and being profitable in 2021,” he shares.

This would certainly help in its goal towards an initial public offering next year.

The company reportedly raked in RM45.7mil in revenue last year, more than double that in 2019. It also posted a net profit of RM3.6mil in 2020 from a net loss of RM2.04mil the previous year.

According to Wang, the company has been achieving a compounded annual growth rate (CAGR) of 100% since 2016. Last year, it grew 110% and Wang is confident of further growth of at least 50% over the next two years.

This will be supported by its plans to double its customer base from about 500,000 currently to one million by the end of 2023.

Now that the pandemic seems to be subsiding and movement restrictions are easing, Signature Market is once again exploring regional expansion.

“We are planning to expand to Indonesia as soon as the borders are open. Nothing is more important than to be on the ground during the expansion phase. And that is why we have been delaying our expansion (plans until borders are open again),” he shares.

Founded in October 2014, Signature Market was the first e-commerce healthy snack subscription box in Malaysia.

In 2016, it pivoted from selling interesting snacks with exotic flavours to affordable groceries that consumers were already consuming. Wang explains that it was a challenge to change consumer behaviour at the time, and moving towards groceries that were more familiar to them made it easier to introduce healthier options to the masses.

This pivot also helped set it on the growth path it is currently on as it is now positioned to tap the rapidly growing e-commerce trend in the region.

Before the pandemic, only 0.3% of consumers in Asean bought groceries online. In 2021, Bain predicts that South-East Asia’s online grocery market share will increase to 2%.

Despite the spike over the past two years, Wang points out that online grocery still has a lot of room for growth. Bain projects that the online grocery market will grow at a CAGR of 32% by 2025.

Wang believes that Signature Market will be able to leverage its experience in the direct-to-consumer (D2C) space over the past seven years to maximise its advantage in e-commerce. Additionally, it already has an efficient D2C system in place.

“The fact that we were able to break even in 2020 and become profitable in 2021 shows that we have found the unit economics to make D2C grocery on e-commerce a profitable and sustainable business.”

Post-pandemic, Signature Market is also looking at deepening the omni-channel experience for its customers. Given that it already has a strong online presence, the company hopes to increase efforts in its offline retail experience moving forward.

Next year, it is exploring options to create its own retail space to enhance its brand ideology and allow consumers a chance to experience and interact with the brand in person.

Early this year, apart from its focus on local operations, Wang says Signature Market made another pivot: “We moved from just selling products to selling a lifestyle.

“We believe that the only way to make an impact on the community is to educate them on a lifestyle and show them how such a lifestyle can upgrade their life.”

It launched its “gratitude movement” at the start of 2021 with various campaigns and is looking to cover a wider scope under the “Conscious Living” banner by the end of this year. Moving offline would also enable it to push this further. Despite the fallout from the pandemic, Wang notes that opportunities remain plentiful. He observes that consumers are increasingly upgrading their lifestyle at a very fast pace and they are more willing to pay for a better experience and higher quality products.

“Malaysian middle-income consumers are slowly moving away from the mass-market brands and the trend now is about having a lot of choices. Consumers are now choosing the brands that resonate with them, brands that are able to make them feel they are a part of something.

“Purpose-driven brands are a very important aspect to the new generation and consumers want to know specifically what that brand stands for, what contribution the brand is making to the community and the world.

“Companies are also putting more emphasis on the environment, social and governance. They are looking at what they can do to contribute to the environment and society,” he shares.

This presents new opportunities for the company and Wang relishes the challenge of ensuring Signature Market is well positioned for them.

“From my previous experience in other startups, I realised that selling consumer food is actually very fast-paced and motivating. Once you find the right product, right pricing and right timing, the product will be very sellable.

“It is very motivating and heartwarming to crack the code and get positive feedback from customers. I also love to build consumer goods companies because I am a consumer as well. I love to shop and nothing is better than shopping in my own store.”

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