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Monday, 10 July 2017

(The Star) Business in the bag

Growth in online sales a boost for multi-brand bag retailer

Tan Chun Yih had a taste of entrepreneurship while he was still in school. He had bought leftover toy figurines from a fast food chain that were selling for a song and made a killing by reselling them online.

Although he later became an engineer, Tan continued to sell some trinkets off and on over the Internet.

But about five years ago, Tan decided to become a full-time entrepreneur. He couldn’t shake off the thought of going back to online sales, he says.

He founded online bag store Oribags Sdn Bhd and worked from the spare room of his parents’ home.

There were bags everywhere, he recalls, and his parents were concerned about the survival of their son as a business owner.

“But if I didn’t start then, I wouldn’t have started. You become less and less courageous as you get older,” he says.

“I settled on selling bags because they are an evergreen type of product and you don’t need to worry about sizes and some designs can last a long time. And we focused more on non-mainstream bags,” he adds.

Tan had to knock on doors of bag distributors, most of which turned him down, to get stock for his online store. They weren’t keen on online sales back then.

Fortunately, five brands were willing to work with him and Tan managed to get Oribags off the ground.

Tan thought his venture moved along rather well.

“I didn’t need to starve or anything. We had a slow but steady growth,” he says.

Over the years, the retail market slowed down with the economy and more bag brands moved to the online platform, which opened the door for Oribags to work with more brands.

Today, Oribags carry full ranges from some 50 brands. It has also expanded to other complementary products such as belts, wallets, bottles and other bag accessories.

As more consumers become accustomed to buying online, the company’s sales has grown, increasing an average of 20% a year.

At the moment, Oribags’ revenue is generated from three segments in equal proportions: laptop bags, travel and hiking bags and wallets.


However, Tan notes that distributors are also moving online, which makes the online market a lot more competitive today.

“But we are in a good position because we already have a customer base. And we are always trying to convert new sales into repeat customers,” he says.

Tan adds that customer service is key to retaining clients.

Oribags started taking a more serious look at its marketing efforts when Tan’s wife, Tjin Ng, joined the company about two years ago.

Ng, who is the marketing director, says it is important to create an experience for the customers that “we ourselves want”.

“We train our staff to engage with the customers in a personalised way. We also try to educate customers on our products through the marketing materials provided by our principals. There are a lot of cool brands out there and people are willing to pay for unknown brands. Customer feedback is also very important to us and they do tell us that they want certain brands. So we try to bring them in while remaining true to our DNA,” she says.

Ng mentions that Oribags may also diversify its product mix to build its female base as males currently make up about 70% of its customer base.

“But female products are more seasonal so we have to be careful with the type of products and brands we bring in,” says Tan.

Three years ago, the duo found a place in Setia Avenue, Shah Alam, which became Oribags’ showroom-cum-retail shop.

Ng says having a store gives customers more confidence in its business and it allows customers to see the physical products before making a purchase.

Buy they are planning to eventually open a proper retail outlet where customers can shop with ease.

“Hopefully it will happen in the next two years. The on-ground retail market is soft now so we need to be prudent. But we’ve set a goal and we will study the market so that we can make smart decisions. We can’t afford to fail because going into brick and mortar is a huge commitment and investment,” says Ng.

Tan also hopes that Oribags will someday grow into a one-stop bag solutions provider in Malaysia, offering products and services for multiple brands.