When Royal Selangor International introduced its Web site back in 1996 as a “promotional exercise”, little did it realise that it was laying the cornerstones for the New Economy. The Web in Malaysia was still at its infancy, e-commerce not even part of the local vocabulary.
But the number of orders that filtered in through e-mail in the early days prompted the 105-year-old pewter maker to upgrade the Web site to an online shop in April 1998 offering 200 items for sale. “By that time, e-commerce was becoming common currency and customer demand was growing so we shifted the focus from an electronic catalogue to a B2C platform,” said David Cheah (pictured), head of e-commerce department.
He added that the company conducted an extensive market research to define needs and a suitable profit- oriented strategy was drawn up to back up the plan. The management of the Royal Selangor Online Shop, which was earlier outsourced, was brought in-house owing to specific and “very peculiar” needs of the company.
Cheah pointed out that the Web site did not operate as a shopping mall but caters to specific and uniqueness of the company as a pewter maker and designer gift shop.
It is also among the few companies in Malaysia that viewed the Internet as an extension of what it already does. “We are not a pure-play but have the best of both worlds as we emulated the brick model on the click channel. What we do in real life is mirrored in the virtual world. The communication channels we have with our customers is direct.”
Today, Royalselangor.com offers over 500 gift items ranging from pewter photo frames, candle-stands, vases and tankards; Comyns silverware, Selberan diamonds and jewels; and Selcraft soft toys for sale online.
The family-run pewter company was started by Yong Koon, a Chinese immigrant from Swatow, as a cottage industry back in 1885. It grew from a modest shop house to a 12-acre site located at a suburb of Kuala Lumpur with over 500 pewter smiths and craftsmen producing 1000 items ranging from tableware to decorative accessories.
In the 1970s, the multiple-award winning company diversified its business to include the design, manufacture and marketing of precious jewellery, sterling silver and hand-painted collectibles.
Content is the Medium
The message is indeed the medium and a key pull factor that reaches the paying customers--as illustrated by the rising demand online. And it does not take a rocket scientist to figure out the e-fulfilment flow. According to Cheah, each online request is processed individually and attended to personally. “We opened up the personal gift services available previously to corporate customers to every individual.”
The 12-man staff, who double up as online shop assistants, take pains to create content for each e-mail query. Despite the voyeuristic atmosphere of the communication process, the human interaction is guaranteed.
“Customers want personalised and superior service levels and we offer exactly just that. We concentrate one million percent on simplifying the ordering, fulfilment and return processes. We concentrate on creating an impression and not on what the competition is up to,” he disclosed.
By leveraging on creating an impressive and effective customer experience, Cheah said many of the online sales are netted through referrals. “Customers are proud to share with their friends the red carpet experience we give them and this brings in new sales for us. It has an effect the way an advertisement does.”
Extras such as customisation, engraving and packaging services are cherries on the icing in choosing and buying a gift, he said, adding that it will continue to leverage on pewter products and other gift brands as long as the customer demands of it.
Given the success, Cheah said that the company is not compelled to sink millions to build an e-commerce infrastructure touted by consultants and experts. The only infrastructure cost that is outsourced is the server space hosted at a service provider in the US. Everything else is done in-house with the exception to shipping.
The logistic partners: DHL, Fedex and TNT deliver promptly within a three-to eight-day period worldwide aside the basic tracking and help desk services. Royal Selangor boasts of one of the best return policies in the world. “More often, customers ask us to replace what they buy with a large version of what they ordered in the first place.”
Cheah also does not see the need for placing banner advertisements elsewhere to increase click-through rates. “We did advertise online for a year with an international brand but did not receive a single enquiry from that. Banners do not work for us.”
About 60% of its sales are derived online and of that number, less than 20% is from Malaysia and almost 60 % is from the US. The profiles of the American buyers are typically middle-aged, well travelled and cultured individuals.
Currently only 1% of total revenue comes from the Internet and it is set to grow to 10% in the next five years. As a privately held company, numbers are not readily available but Cheah disclosed that “in 1998, online sales was same as what one showroom brought in. Today, it makes the sales of three showrooms”.
Low sales at the home turf was attributed to Royal Selangor being a native. “You need to sell the right thing here and not something that is commonly found. However, we recently made good sales with the first day covers that are popular among collectors. They are buying online because it is convenient to do so and a first day cover is pretty much a straightforward buy.”
Cheah said that the e-mail relationship built with its clientele is unique. Each time a query or comment comes in, the Web team traces the chain of events via its tracking system before replying.
“If someone writes in complaining they have trouble navigating the site, we will hold their hand all the way till they find what they want. We have gone to lengths to create a special section for a customer and assist him as we would if he were in our shop. To do that is not all that difficult.”
Such personalised replies have ballooned the size of the Royal Selangor Web site. But the company is more than happy to keep records of all its experiences as many are return customers.
“We have no time to count how many of our customers have come back over and over again. But we recognise them when they come back as there are records. Similarly I can tell you that many are from US and not Asia by virtue of looking at the orders that come in daily and aggregating the numbers.”
Cheah pointed out that traffic and page views were irrelevant in their case as their strength lies in converting a response into a sale. However, there have been instances where one large order comfortably covers a month’s work.
The Web culture may demand a 24 by 7 routine but Cheah does not see the need for a frenetic pace as long as they maintain a healthy e-mail communication with the clientele.
Peak season might, however, demand that the staff at the online shop and manufacturing plant work overnight to fulfil orders. The same applies for made- to-order designs that can be crafted to the last detail. “Last year, we were still busy processing and sending out gifts two days before Christmas and it all arrived on time as we insisted our courier service deliver by then.”
While most companies confess the last mile home is out of their control, Cheah admitted that they “arm twist” the courier boys to work at the service levels demanded. He added that the couriers are not allowed to inform customers if any of the parcels are delayed without informing them first.
Delays that arise at customs checkpoint are usually due to taxes but the tab is borne by customers. “We typically inform our customers about taxes especially if we have encountered difficulties in sending a gift to a specific country. Australia recently introduced value added tax and we are studying the best way to help customers,” he said.
Beyond the gift market, Cheah is also looking at creating communities based on its clientele’s interest such as collectibles and first day covers. “We are not a shopping site and have no interest in going that direction.”
In the pipeline are plans to focus on the various market segments identified such as corporate customers, collectors, people who buy gifts and individuals with specific interest. A standalone Mandarin site was also recently published this month.
“We have redesigned our Web site to cater to these different people and created an area for those interested in pewter care and general pewter news that is of interest to them.”
Some customers have also taken the next step by suggesting ideas on new product designs. “This is amazing for us because as a large manufacturer, we normally talk to dealers and retailers, not customers. But the Internet changed that for us,” he added.
In the long term, e-commerce will be progressively assimilated into its overall business strategy. “Essentially e-commerce is about logistics and risk management, as long as we do these two things well, we’ll be okay.”