Babydash aims to dominate Malaysian market
By Karamjit Singh March 31, 2015
- Using diapers and infant formula as loss leaders
- Self-funded site aims for US$1.1mil revenue in 2015
THERE was no hackathon nor pitch competition to flesh out the idea. They did not go through an accelerator, nor did they have a cofounder who had built a successful startup before.
All it took for Babydash to be launched by two friends, Lavinie Thiruchelvam and Tay Shan Li, was the realisation in 2011 that they could not buy diapers and infant formula online.
“No one was doing it and so we thought, why not us?” laughs Lavinie, looking back at those early days and marveling at the naivety, mixed with ‘can do’ spirit, that infused her and Tay, speaking to Digital News Asia (DNA) in Petaling Jaya recently.
It also helped that they were aware of a US-based site, diapers.com, that had a successful business model selling diapers online.
In essence, the duo is using diapers and infant formula, sold cheaper than anywhere else, they claim, even compared with a large store like Tesco, as loss leaders to get customers to buy other baby- related products. Hence the free shipping offered since launch in late 2011, but for orders worth RM149 and above.
Such was their pricing for diapers and infant formula that in the early days they would get customers calling just to check if the company was real and to confirm the prices. “They could not believe that we could sell our diapers and infant formula that cheap,” says Lavinie, a law graduate.
Today, they look back with satisfaction at a journey that has seen them hit what they claim was a breakout year in revenue for 2014 (they decline to reveal the amount), confidently targeting RM4 million (US$1.1 million) in revenue this year.
“It is very doable,” says Tay, who is in charge of marketing, public relations and social media.
Self-funded thus far, Babydash is now looking for funding to “grow more rapidly, increase the products we offer, and dominate the Malaysian market,” says Lavinie.
Steep learning curve
Predictably in the early days, the learning curve was steep, especially for Lavinie, who was running the show alone for three-and-a-half years while Tay was still with a large Malaysian-based regional bank. She joined Lavinie full-time in September, 2014.
While they did not have any experienced hand to guide them, they knew that it was important to start with a proper e-commerce site that looked professional and could scale.
“That’s also why we started with payment platform iPay88 in place for the ease of our customers, to have various payment options,” says Lavinie, who also spoke to numerous web developers before finding one she felt was suitable.
At that time in 2011, she had already been running a dance studio for 10 years, and this was a side project that just started demanding more of her time, especially when Babydash launched. She started focusing on the site full-time starting February, 2013.
“It may sound like a cliché but we knew that to differentiate, we had to deliver excellent customer service – and that was, and still is, our main focus to our customers,” says Tay.
This customer service is reflected in the delivery time of their products. While the site initially promised customers a five-day delivery period, Lavinie would personally pack customer orders and send them out the same day whenever possible, with customers getting them within 24- to 48-hours.
“We wanted to over-deliver on our promise,” she says.
That they’re delivering on that promise is echoed by customer Nur Ain Dahlan, who told DNA via messaging that she spends a minimum RM150 a month with them, and likes the cheap price she gets for the Karihome infant formula in particular.
And this is the reason Lee Chee Yong, general manager of Orient Europharma (M) Sdn Bhd, appointed babydash as the “official online partner” to its New Zealand imported infant goat milk formula.
“They provide great customer service and many of our customers have given us very positive feedback on their experience with babydash,” says Lee.
In fact, during last December’s floods in Malaysia’s East Coast states, Babydash was still able to deliver orders to customers in flood-affected areas.
“We got some heartwarming messages from customers who could not believe we could deliver on time,” Tay declares.
Part of the reason they could do so is because of the relationship they have built up with ABX Express Sdn Bhd, their main logistics provider. “We have grown with them over the past few years,” says Lavinie.
Their growth has also not gone unnoticed by the large infant formula brands. And the duo sees an opportunity here.
“Some of them still are not ready to put in the resources to invest in an e-commerce channel, and that is where we are telling them to leverage on our site and customers, and to view us as their online platform,” says Tay.
With data readily available online, Babydash can tell the brands how their advertising messages are working, who has seen them, who has clicked on their products, and how many end up buying them.
“They have to pay the supermarkets to promote and market their products with no real feel for how effective the promotions are. But we are saying, ‘Give us your marketing dollars and we will promote your products for you’,” she adds.
2015 is also the year that Babydash starts promoting itself more, after having done no public relations or media interviews since they launched in 2011.
With their ambition of wanting to dominate the Malaysian market for baby products, expect to see and hear more of them moving forward.
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