The Edge, Monday, February 25th, 2002
Hooking customers with freebies
By Nancy Chin
There is still such a thing as a free lunch, it seems, especially for small- and me-dium-sized industries (SMIs) that lack the financial means to e-enable their business.
Web-hosting provider iRepublics.com offers free web-hosting, SMS and web-mail for SMIs. Other freebies include individual corporate domain names, 33MB web space and 30 e-mail accounts at 10MB per e-mail account with no banner-ad requirements on web pages.
Its chief executive officer Leng Kean Meng says the offer is pretty good, considering that a web page with some photographs takes up 30 to 60 kilobytes of space.
But here’s the catch: Businesses need to pay if they need extra services such as “instant web” packages, customised web design and e-commerce enabling.
Leng says iRepublics.com is currently hosting over 5,000 websites and has activated about 70,000 mailboxes.
Some of the companies that have evolved from receiving the free web hosting to paid services are Ayamas Food Corp Bhd, Pathlab (M) Sdn Bhd and Tong Garden Snack Food Sdn Bhd.
Other sources of income are from its e-commerce services via www.vis.com.my, an online retailing website that has been operating since 1996.
Both iRepublics.com and the online retail site are principal Internet properties of Value-i-Store Sdn Bhd, an e-commerce and web-enabling company set up by Leng six years ago with a paid-up capital of RM1 million.
Leng says Value-i-Store’s business comprises services, solutions and subscriptions. In 2000, these areas contributed 15, 70 and 15 per cent, respectively, to Value-i-Store’s revenue of RM5 million.
“We are hoping to generate RM7 million in revenue this year,” Leng adds.
Services include online retailing, web designing, Internet advertising and interactive marketing while solutions offer hardware, software and network system integration, web development and web-enabling, creative and strategy consulting services.
Its subscription business covers domain name registrations, pop-mail hosting, domain name system (DNS) and application hosting, server and service maintenance programmes.
There’re still opportunities in e-commerce
While many say business-to-consumer is dead, Leng thinks otherwise. “You will be surprised to know that there are still people who buy online,” he says. Most of Value-i-Store’s customers are Malaysians residing abroad who make online purchases for friends and relatives living here.
The e-commerce business, Leng says, contributed RM300,000 to revenue in 2000. Clairmont Kok, the company’s marketing and communications director, recalls an interesting online purchase by a consumer who wanted to present 99 bouquets of roses to his girlfriend on Valentine’s Day last year.
“He found our website and made his order. When we contacted him, he said he had made inquiries at several online stores but we were the only one that replied,” she says. Prompt response and the ability to tailor the order to customers’ needs are two essential traits that an online store should possess, she adds.
New source of income
Last August, Value-i-Store introduced a service called interactive network marketing (INM) which it hopes will lead to increased revenue. INM is a solution to raise brand awareness and to lower customer acquisition costs. “It represents our initiative to grow the services segment of the business. In addition, INM is an interactive marketing solution that complements our Internet advertising services through demonstrable results and return on investments for our clients,” Leng says.
With iRepublics.com hosting the websites of 5,000 companies and 70,000 e-mail accounts, Kok believes such marketing methods will work. “This solution is aimed at converting our 70,000 e-mail users to “evangelists” who refer products or services to their family and friends. This is not spam because the e-mail is from a person that the recipient knows,” she says.
Through INM, advertisers and marketers can cost-effectively acquire new customers and get people to try out their products quickly.
“The database is acquired for future loyalty and marketing programmes,” says Kok. She reckons that INM is better than other advertising media because of the high level of trust in advertisement messages.
“An accountable media is crucial for effective advertising and promotion, especially during a bad economic period,” she says.
Leng hopes that the new service will make a significant contribution to the company’s bottom line. He is optimistic that the company, which employs 20 people, will achieve its RM7 million revenue target as he believes it has a holistic e-business offering that provides customers a value proposition.
“We also reinvest our profits in research and product development activities, having ploughed back RM3 million of profits into the business,” Leng says.
The company made a profit of RM10,000 (excluding profits channelled into research and development) for 2000.