Siblings realise their father's dream - in cyberspace
MINH TRUONG escaped Vietnam in a boat, arriving in Australia in 1978. His first wish was to find a safe haven. An importer and exporter, Truong found sanctuary and began a new life in Melbourne. Twenty-two years later, he is part of another great upheaval: the worldwide e-commerce revolution.
Today, Truong - who admits only to being "more than 65 years old" - sits comfortably in front of a computer working on the payroll of one of Australia's leading retail-shopping Internet sites, Wishlist (wishlist.com.au).
Truong's bosses are his four children, technopreneurs Huy and Jardin - the founders of Wishlist - their sister Dinh and brother Cam, a lawyer. Outside investors have a majority stake in their company.
"After arriving in Australia, our father worked in a factory as a packer for 20 years to put us through school," says Huy Truong. "Now he is watching us develop this business - it's a dream come true for him."
Huy completed an MBA at Harvard and worked in management consulting and investment banking before opening Wishlist in cyberspace in June last year. Its product range includes food and wine, fashion and beauty products. Lingerie, too, is a popular item. "The exciting thing about this operation, compared to a traditional bricks-and-mortar store, is that we don't have to knock a wall down to expand. We simply open up new pages on the Web," he says. "It's better for the customers, too. It's more personal, shoppers don't run the risk of getting ignored when they come into our store."
AFTER 10 YEARS BUILDING RETAIL BRANDS SUCH as popular fashion label Kookai, sister Jardin stepped in as general manager of Wishlist. During the Christmas 1999 season in Australia, Wishlist claimed one third of all online shopping revenues, worth more than A$500,000 (US$319,000).
A TRIFLING AMOUNT, MAYBE, COMPARED TO global cyberbrand Amazon.com, which shipped 20 million items worth about A$2.5 billion during the same December period. Like Amazon, though, Wishlist has seen its sales, mostly to locals and expats living in Australia, explode. "The numbers buying have exceeded our expectations," says Jardin.
Wishlist points to its more personal approach with customers as one of the reasons for its success. "Our credibility is helping customers to make the decision to purchase products from us," says Huy, the CEO. He adds that the site uses a secure credit-card system to collect payments. "We do everything here - sales, administration, technology, fulfilment, so if anyone has a problem they can speak directly to someone from Wishlist, rather than a call centre." Huy says Wishlist bridges two worlds: "We're taking people from traditional retail stores to Internet shopping. People are learning to shop in a whole new way."
WISHLIST ADDS A MARK-UP TO ITS PRODUCTS and charges a small delivery fee. But its prices are still competitive against high-street shops. Wishlist focuses on speed and flexibility to stay ahead of its traditional rivals. It also targets special occasions such as birthdays, anniversaries, Christmas and Lunar New Year to promote its services. More than 20,000 members have registered their details online to get reminders of their loved ones' birthdays, for example. Wishlist expects to have more than 2 million registrants by 2002.
Zonal Research, a US-based market-research company, estimates that worldwide, each online shopper is worth about US$8,000 in future purchases. Analysts expect those numbers to escalate as consumers begin to use the Internet for shopping as regularly as they drop into a convenience store for a quart of milk.
Upmarket Australian clothing designer Scanlan & Theodore chose to sell a limited range of its products through Wishlist rather than investing in its own Website. It has since seen a 30% increase in sales. These results, say the designer's general manager Sener Abdula, indicate that Wishlist sales were achieved without harming existing retail sales. And several online customers later visited retail outlets to see the rest of Scanlan & Theodore's line. "Far from harming retail outlets, the Web presence attracted new customers to retail stores," says Abdula.
TRADITIONAL RETAILERS WITH brand names are expected to provide the greatest competition to the new wave of e-tailers. Ted Yates, a director of retail and consumer products at Ernst & Young, says that the costs of entry on the Web are rising all the time. Every dotcom has to spend most of its money on marketing, whereas bricks-and-mortar companies already have brands.
"People use that recognition to find sites," Yates says, "not to buy from them. If established retailers are going to compete online, they're going to have to convert more visits into sales."
Wishlist is coy about estimating its start-up costs and potential profits. Huy says investment to date in Wishlist "is in the millions". As for profit projections, he will only say: "When we feel we have invested enough in customer acquisition, product development and brand building, we will look to make profit." He expects this will take two to three years.
THE PACE AND EXTENT OF the Internet economy has been likened to the 18th-century Industrial Revolution. But while Wishlist's office is in a scruffy part of Melbourne, there's no resemblance to Britain's once dark and gloomy sweatshops.
Most of the workforce is made up of university graduates in their mid- to late 20s. "We are creating a way of living," says Huy. "We're all evangelists, out there singing the gospel of e-commerce."