The Pain Points of The Garment Industry
New shirt brand hopes to reduce prices and wastage with a different business model Overstocking and expensive shirts that donât fit. These are some of the issues that bother Oxwhiteâs Chang Chee Keong, 39, when it comes to the garment industry back in January 2019.
âIt is expensive to get a well-suited shirt. You either need to get it tailor-made or get it from a high-end brand. The high-end brands are usually highly priced and often donât fit the Asian physique. Most times, they need alteration. And if you go to an Asian brand, usually the quality doesnât meet your expectations,â says Chang.
Another problem prevalent in the industry is over-inventory. High street brands tend to produce excessive quantities, most of which end up being disposed of. When Chang decided to make shirts two years ago, he looked for a business model that would address these pain points.
The way to do this, he opines, is to use a pre-order model. This would not only reduce its cost for storage and inventory management, it also ensures that every shirt made is bought.
After spending some time learning about fabrics and how shirts are made and sold, he launched Oxwhite last June. Fingers crossed, he would be able to gather enough pre-orders to meet his minimum order quantity.
Demand turned out to be better than he expected, considering that wait time for orders to be fulfilled is four months and it wasnât as common for men to buy their clothes online. Chang thought he could really be on to something.
âBased on the trend weâve observed, weâve been getting good reviews for our
products. We believe with a good product at a good price, we can scale this business,â he says.
Oxwhite mainly produces white shirts, priced between RM69 and RM99. Customers would place their orders on the website and receive their purchase three to four months later.
Its shirts are made by a manufacturer in Indonesia which also produces for various international brands, Chang assures.
Oxwhite is about combining the big brand experience with Asian pricing and physique, he adds.
To-date, the brand has sold some 30,000 shirts to over 13,000 customers.
âWe are trying to change their buying behaviour. The market doesnât need another
brand. How we stand out is by having a niche business model. Our products are essential type of products. We focus more on form and function rather than style and fashion. And we have gained good traction with this.
âWe want to also be socially responsible and not excessively over-produce. We are staying lean with the pre-order model,â he says. Another trend that will benefit Oxwhite, says Chang, is a growing interest by millennials in non-conventional brands.
âMillennials in other markets are already choosing products above brands. They are looking at other things like quality, reviews, customer experience, company story and transparency.
There is an opportunity for us to be a brandless brand,â he says. He believes that Oxwhite has a good story to share, which will help with building customer loyalty.
âThe story telling part has been crucial to our business model from day one. Why buy from us? Because we are different. We can make an impact on the environment and on your wallet. We want customers to buy into our story before they buy into our product, that looking good need not have to be expensive,â he adds. He hopes to raise some funds through venture capitals or strategic partners to help the company expand regionally. If it doesnât move fast enough, other players may fill the gap it hopes to cover.
A deeper pocket may also help reduce wait time for its customers. From formal to casual It was reported in July 2020 that premium lifestyle brand OxWhite broke Malaysian equity crowdfunding records in December last year by securing an investment of US$1.188 million (RM5.019 million) from 485 investors.
The Business Model that Addresses The Pain Points
But shortly after, the Covid-19 virus hit China and subsequently crossed borders until it was declared a pandemic. âIn February, we were impacted when factories in China closed for Chinese New Year. We initially anticipated zero production for one month but factories there only reopened in mid-March, by which time, operations here had to be shut down,â OxWhite founder CK Chang tells Enterprise.
He says that with the funds raised, he anticipated sales to be five to eight times more than usual. Instead, OxWhiteâs sales only tripled during the Movement Control Order (MCO) period from March to May. However, he was thankful he managed to restock inventory before Chinese New Year as everything was sold out during the MCO. Initially, the plan was to launch new products every month as 60% of the funds raised was allocated for product development. The companyâs main product offering is noniron shirts and customers were looking for more clothing options. However, its stock of new products was stuck at the ports so Chang started offering more casual products such as short-sleeved shirts, polo shirts and underwear.
âWe reallocated our funds to focus more on casual wear because that was what we saw people looking for during the MCO period. We only managed to launch the next set of products in May,â he says, adding that OxWhite will be releasing a fitness collection in September. âWe definitely felt the impact of the MCO because we lost potential customers during that time. Weâre hoping to make up for it now.â
âCovid-19 affected our supply chain. A lot of our supporting factories from Indonesia, Malaysia, Vietnam, Thailand couldnât source the materials from China, thus delaying our production and delivery of goods and the launching of new products.â
Despite these challenges, Oxwhite tripled its sales during the movement control order period, which Chang attributed to having the right products. âInner wear, casual Tshirts, bath towels were best sellers during that time. People were staying at home, so they buy more casual items and household items.â
As an e-retailer, Oxwhiteâs primary sales come from its website. Its products are also available on Shopee Mall. Its target audience are those aged 18-40 years.
Chang said it has no plans for physical stores, although it has experience stores in Isetan The Gardens and Isetan KLCC for formal shirts only.
Oxwhite operates on a direct-to-consumer model, providing an accessible alternative to luxury brands that maintains the premium quality at a fraction of the cost.
Chang says he faced a similar problem when he wanted to expand his product line to include sports and fitness wear. âSportswear is something that we always wanted to do but we could not find a manufacturer that produced the quality [that we wanted]. Thanks to Covid-19, however, these manufacturers gave us production allocation because a lot of big brands cancelled their orders,â he explains.
âFor example, the company that manufactures the sportswear for big brands like Nike, Adidas and Underarmour; traditionally, these brands take up the manufacturerâs full capacity because worldwide demand for their products is strong. They donât even look at us when we request 10,000 pieces. But because of the pandemic, the bigger brands pulled back their orders and we had a chance to get a supply from the manufacturer. It was truly a blessing in disguise,â Chang says. The goal, says Chang, is to build a cult brand that is able to compete with the likes of Uniqlo, Muji and Padini. âWe have a long way to go before we get there. But weâll take it one step at a time, starting with a presence in the Asean region before expanding to the rest of Asia.â
1. Determine the strategies that drove Oxwhiteâs success before the Covid-19 pandemic roadblock
2. Examine the segmentation and targeting strategy (s) for Oxwhite Malaysia.
3. Recommend promotional strategies to Oxwhite for its existing product lines as well as the new upcoming sportswear.