Friday 21 Jun 2024
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This article first appeared in Digital Edge, The Edge Malaysia Weekly on July 26, 2021 - August 1, 2021

When the Movement Control Order (MCO) first hit last year, Malaysians started noticing an advertisement on their Facebook and Instagram pages for a new e-commerce site selling wines and spirits, Albertwines.

Many availed themselves of the offerings, resulting in a surge in sales last April after a month of lockdown had frayed the nerves of even the best and bravest, and they were in need of some liquid courage and fortification.

It was a matter of right time, right place for founder Albert Tan, who had seen the writing on the wall for the wines and spirits business, and pushed for the development of an e-commerce arm a few years ago.

The website was ready in 2019 and Tan and his team tested it for six months. When the pandemic hit, the Albertwines e-commerce site was actually good to go.

Tan, a dapper 64-year-old in a well-appointed office in the wilds of Kepong, seems to have a thing about serendipity. He started his business Albert Wines and Spirits Sdn Bhd in 1992, on the cusp of the stock market super boom in Malaysia and the real surge in the wines and spirits business, with the mushrooming of pubs, bars, hotels and restaurants serving spirits in the 1990s.

Four to five years ago, Tan observed a new phenomenon in the market when a company called Wine Talk started selling wine and spirits over the web. “I foresaw that that would be the future of the business, so I started to scout for staff.”

One of the people he approached was David Stephan, the Frenchman who was running Wine Talk. Stephan, now the director of digital development at Albertwines, agreed to move when that company was bought over by new owners who changed its direction.

“I knew David for quite some time as everyone in this industry knows everyone else. It’s a small industry. I tried to talk to him to ask him to come over. I said, let’s do something different and more exciting.”

Different in what way? “Well, firstly, unlike Wine Talk, which is only a retail unit and depends on third-party suppliers, we are an importer. We bring in our own products and represent a lot of big brands. So it’s easier for us to do this (e-commerce) because we have the hardware.”

Stephan nods: “At Wine Talk, we did some good work on development but it came with some limitations because the big issue for any retailer is inventory.”

But this is not an issue he faces at Albertwines, Stephan hastens to add. “We’re importers and distributors and we always have a large amount of inventory available.”

Right now, he is sorting out the nitty-gritty of the website. “I’m pretty happy with the website we have now but it comes with some limitations because we got a pre-built one with templates where we could just enter images and information.”

This worked well in terms of helping it execute more rapidly but now that the business has taken off, it is time to upgrade the website and link it to the company’s inventory.

“We are putting the building blocks in place not only for e-commerce but for the company for the next 10 years. So, we will take a little bit of time to make sure that we get it right,” says Stephan.

This means adding other elements that are missing from the present system such as a proper rewards system. “This is imperative because we have regular customers and we want to give them some rewards in addition to the regular sales promotions,” he adds.

The company is finalising the selection of its system, Stephan continues. “Within a few months, we will launch with a brand-new website and customer service and rewards management system.”

The new website, he says, will cost up to RM100,000. “That’s a high price but it will be exactly what we want, fully integrated and with a very good customer management system.”

One thing Stephan put in the website from the beginning was a customer feedback form so the company could tweak it as it went along. “When people say we should have something on our website, we try to see if we can accommodate it. For instance, last year we didn’t have the Parker Points for the wines and now we do.”

Parker Points refer to a score awarded to a wine by Robert Parker, whose newsletter The Wine Advocate uses a 100-point scale to rate wines. These points tend to influence the price of the wine and its subsequent popularity.

“A lot of people are very sensitive to the rating because they don’t know too much about wines. We always try to give some small recommendation and tasting notes but they trust certain names and wine critics better,” says Stephan.

The other thing he had to sort out was the delivery service, especially after the first MCO. After a while, it started offering same-day delivery for RM20.

“This, too, was based on feedback from our customers. We have standard delivery which costs RM12 and takes two to three working days but some people wanted to have what they ordered much faster.”

What has been the response to this service? “Since we started a few months ago, about 5% to 8% of the orders come for the same day.

“And it’s not only the odd orders. Every day we have two or three orders for same-day delivery, people who want to order two to three bottles for their dinner that night or those who order 12 bottles to restock their wine fridges,” Stephan explains.

The e-commerce business has gone from nothing to accounting for 20% of its business. In many ways, the e-commerce website saved the company — Tan says it helped him pay the bills and retain his staff.

Albert Wines initially only had four or five people working in its e-commerce arm but after a week, orders were so good that it had to call in more people. “We needed one more accountant and more people in operations to pack the bottles. There was a spike in the orders coming in,” Tan says.

This was good as its main business from hotels and restaurants had gone down dramatically. “Starting in March, there was a big spike in orders from retail. We decided at some point to have a standard offer of free delivery for orders over RM199. For orders below that, there would be a RM12 delivery fee.”

During the first MCO, however, the company decided to provide free delivery for all orders. “So even if people just wanted one bottle of wine for the night, they would not have to feel like they had to spend a lot of money to get free delivery,” says Tan. The company also organised various promotions during that time. “Our margins fell a little but people were happy and we moved a lot of stock during that time.”

Who was buying? “When you think of alcohol, you imagine that it would only be the old uncles who are going to order, but from what we saw, 47% of our customers were female and about 20% were aged between 21 and 30, according to Google Analytics,” Stephan reveals.

The company has its own inventory, which is kept in two warehouses. “We have a duty-free and a duty-paid warehouse. (For) any bottle of wine or spirits, the highest cost in Malaysia is going to be the duties. So, we bring stock in and clear them progressively. It can take up to a month to clear the stock from one warehouse to the other, and to get the stickers (which denote that the duty has been paid on that particular bottle),” he says.

How does it figure out how much to clear at any one time? “We know that next month, for instance, we are going to sell 20 cases of a particular bottle. So we clear that out ahead. You always have to juggle between your forecasts and the reality on the ground because if you have no stock [in the duty-paid warehouse], it takes some time to clear the duty,” Tan explains.

The company is also in the process of designing its own packaging — which now consists largely of bubble wrap — to something more environmentally friendly. “We are designing special boxes that are very secure and don’t need bubble wrap, so we can reduce our use of plastic,” says Stephan.

He adds that another priority is introducing two-hour delivery, an improvement on the same-day delivery feature. “We can do this when we move to our new platform where we can get the correct inventory at any one time.”

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