Friday June 29, 2012
Penang-based entrepreneur take on the challenge of running a group buying site
TWO years ago, Clarence Long left his job in England to return to his birthplace — Penang. As the story goes, he was sick of the usual nine-to-five life in the British capital and was also a little homesick.
He was determined not to return to a conventional job — Long wanted out from the rat race. He had only one option — to start his own business. Even though, he wasn't a business graduate, he made a decision to venture into the online group buying industry.
Group buying, also known as collective buying, offers products and services at significantly reduced prices on the condition that a minimum number of buyers would make the purchase.
However, at that time, online purchasing wasn't a big thing in the country, and group buying was unheard of.
In the years that Long had been in England, he noticed that group buying is a very popular method of purchasing goods. Looking at the success of the group buying phenomenon in England, he picked this line of business as he believed that Malaysia would soon adopt this method of purchasing goods as well.
"Group buying is very popular in foreign countries. I remembered when I once came back for a holiday and realised that the group buying industry here has a lot of room for expansion and development and it was then I knew that this was an opportunity that I should not miss out on. When I went back to England, I immediately started collecting information about how to start up an online group buying business," said Long.
Soon after making the life-changing decision, Long resigned from his job and together with his wife, came back to Malaysia and started a local online group buying website, ezivoucher.com.
After a year-and-a-half, Long is still unsure about how he got the drive to do what he did. He said that when he told his family and friends about his plan to venture into this line of business, all of them were very much against it.
However, he persevered with the idea of ezivoucher.com and made it a reality. The word 'Ezi' was derived from the pronounciation of 'easy' from the phrase 'make everything easy'.
"Group buying has greatly influenced the way we buy our things because, with a two-star price, we can purchase five-star things like accomodation, spa treatments and food. Essentially, this is what makes this concept so tempting."
Long also revealed that up to 80% of sales from ezivoucher.com is from the sales of food and beverages.
"There was once when we sold 1,800 discount vouchers from one of our restaurants. Besides that, there was a 'buy-three-free-three' movie ticket bundle from one of the cinemas and we sold more than 6,000 of these tickets in just one week," said Long.
These days, most people spend most of their time on Facebook and so according to Long, it is one of the main platforms for sales.
When asked about why he chose Penang to be his base of operations, Long said that there is too much competition is Kuala Lumpur.
He also said that if he were to have opened his own individual business in the traditional sense, he would have probably been kicked out of the market. Eventhough this line of business he is doing now does not give him a very big profit, but at least the business can still generate a turnover.
Many businesses go through group buying websites to advertise special promotions (mostly up to 50%) to attract customers. Both the business and the group buying website benefits from this arrangement, but the one that benefits the most is, of course, the business.
"Once a business advertises a special promotion on a group buying website, it no longer needs to spend any money on spreading the word. Our profit comes from a commission from the sales of the vouchers. The more vouchers we sell, the more money we earn.
"The money saved from not requiring any advertising would be used by the business to compensate for the special promotion prices. It is a win-win situation," explained Long.
When Long first established ezivoucher.com, he met with his biggest obstacle yet. Most businesses and consumers were hard-pressed to trust him as most of them had never heard of group buying, and the thought of people paying their money to the website and obtaining a coupon was just a little too suspicious.
But now, many people are seeking him out to advertise their promotions. Not only that, with the presence of these special promotions, consumers no longer hold the suspicion they have had towards online purchasing, and they can also enjoy these benefits with their family and friends.
"Personally, I am a person who likes group buying.
"My staff and I also regularly buy many of the vouchers available on the website, so that we can see it from our customer's point of view," concluded Long.