Nes­tle to grow e-com­merce biz

> Turnover from its online busi­ness grew from RM100,000 a month to RM1 mil­lion, says MD

The Sun (Malaysia) - - SPEAK UP - BY EVA YEONG

PE­TAL­ING JAYA: Nes­tle (Malaysia) Bhd, which un­veiled its first ecom­merce flag­ship stores yes­ter­day, ex­pects 10% of its to­tal turnover to come from e-com­merce in five years’ time.

Man­ag­ing di­rec­tor Alois Hof­bauer said the group em­barked on ecom­merce about two years ago by es­tab­lish­ing a Dig­i­tal Ac­cel­er­a­tion Cen­tre and started to en­ter the ecom­merce space in a big way since early this year.

From a turnover of RM100,000 to RM200,000 per month, the turnover from e-com­merce al­most quadru­pled within six to eight months and has reached RM1 mil­lion to­day.

“In the old days, e-com­merce would only have been on elec­tron­ics, gad­gets and oth­ers but now you can see ecom­merce has also gone into gro­ceries and fresh prod­ucts. So we have seen that e-com­merce has been de­vel­op­ing very fast. In China to­day, if you think about our prod­uct range, de­pend­ing on the dif­fer­ent cat­e­gories, at least 10% of our busi­ness al­ready goes through ecom­merce. So that’s huge and when you talk about busi­nesses like pet food or in­fant nu­tri­tion, we’re talk­ing about 30%, 60% that goes through this chan­nel,” he told Sun­Biz in an in­ter­view.

Hof­bauer said the group re­lies on the plat­form of online re­tail­ers like 11street and Lazada to han­dle the back-end (de­liv­ery and lo­gis­tics) of its ecom­merce busi­ness and although it han­dles cer­tain prod­ucts on its own, such as Ne­spresso, there are no plans to take over the back-end ser­vices.

“I don’t think we will in­vest into this mas­sive set up be­cause that’s a huge in­vest­ment and a big chal­lenge. It is a big chal­lenge that re­tail­ers face to make it work, to make it ef­fi­cient and cost ef­fi­cient,” he said, adding that the online re­tail­ers are bet­ter equipped to han­dle back-end ser­vices.

Hof­bauer said the group’s in­vest­ment into the en­tire dig­i­tal space has in­creased mas­sively over the last three years.

“Not too long ago, we had a small por­tion of our brand­ing and ad­ver­tis­ing busi­ness go­ing into Facebook, Google and so on. To­day, more than 40% of our in­vest­ment is al­ready in this area. So it is a huge dif­fer­ence be­cause specif­i­cally, Gen­er­a­tion X, Y and Z are no longer on tra­di­tional me­dia; they are in so­cial me­dia, they are in the dig­i­tal space and that is nat­u­ral,” he said.

Hof­bauer said by go­ing into the dig­i­tal space, the group will be able to of­fer more than just prod­ucts to its con­sumers. For ex­am­ple, it can of­fer recipes and nutri­tional in­for­ma­tion as well as cross-sell its prod­ucts to con­sumers.

“The per­son­alised ex­pe­ri­ence is a lot more en­riched. That is some­thing which I be­lieve, as a con­sumer, you re­ally can ben­e­fit. It gives you a much more com­pre­hen­sive pack­age,” he added.

Hof­bauer said it will also use ecom­merce to ex­pand its new KitKat Cho­co­la­tory store in Mid Val­ley, by com­bin­ing e-com­merce and prod­uct cus­tomi­sa­tion to cater to the Malaysian taste bud.

The shop will be open in the next two weeks.

“The Cho­co­la­tory com­bines the best of both worlds. On one side, we are of­fer­ing very lim­ited edi­tion KitKat specif­i­cally for Malaysian taste buds, for ex­am­ple, nasi le­mak and durian.”

“On the other side, and this is where – in the fu­ture – e-com­merce will come in. You can cre­ate your own KitKat with dif­fer­ent pack­ag­ing va­ri­eties, choco­lates and in­gre­di­ents. It gives you in prin­ci­ple 10,000 va­ri­eties,” he said.

He said the KitKat Cho­co­la­tory is the first within the Nes­tle world and there is in­ter­est from Nes­tle UK to repli­cate it.

From left: 11street vice-pres­i­dent of mer­chan­dis­ing Bruce Lim, Hof­bauer and Lazada Malaysia CEO Hans Peter Res­sel dur­ing launch of Nes­tle Well­ness To­gether-Gather cam­paign at Mu­tiara Da­mansara yes­ter­day.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.