Tollyjoy cautiously optimistic, hopes to extend positive growth

PETALING JAYA: Tollyjoy Corp (M) Sdn Bhd is cautiously optimistic on its performance this year and hopes to repeat the positive growth it achieved previously despite soft consumer sentiment.
“Since 2014 till 2016, we have had positive growth of up to 10% year-on-year, on the matrix of gross sales as well as profitability. But I think we should not rest on our laurels because our consumers demand that we don’t do that. Once you rest on your laurels, you become complacent and that’s not what we want to be,” its CEO Tan Wee Keng (pix) told SunBiz.
Last year, the baby products group achieved close to RM50 million in revenue compared with RM46 million in 2015 despite negative business sentiment and is working towards replicating the growth this year.
“We are working towards that. Every quarter may look different because there are certain events going on, different festivals in different quarters. As a whole, we hope to be able to replicate our performance this year but I can’t guarantee that,” he said.
Although the baby products industry can be seen as an evergreen industry, Tan attributed the group’s resilience over the past years to its focus on product development, branding and getting its cost structures right.
“Those are just some of the things we did to ensure that the brand performed during those down years. We’re glad we did what we did because it showed … in those years, we knew that the economy was soft but we braced ourselves and told ourselves that we shouldn’t use the economy as a means to justify poor results,” he said.
Tan said the group spends most of its resources on product development with 95% of its product range being outsourced following a decision in 2010 to streamline operations to focus on brand and product development, and to gradually outsource its manufacturing capabilities.
“We do have a factory, for the remaining 5% of our product range and warehousing for our products,” he added.
Besides brand and product development, another area that Tollyjoy is attempting to grow in is the e-commerce space. It is currently leveraging on e-commerce portals and working with Lazada under the Alibaba Group to explore opportunities for future collaboration.
Tan said Tollyjoy had in the past, as far back as the late 1990s, tried to sell its products online when e-commerce was at its infancy. However, it “failed miserably” as it was not the right time and the group gave up on the idea along with its investments.
“It was simply too expensive. Can you imagine there were a lot of fees such as bank charges, bank fees that you have to incur. But these days no more and we realised we can’t do it alone as well. If you want to tap into the power of the internet, you have to tap on the strength of others rather than go it alone; unless you really have deep pockets and resources,” he said.
The group has re-entered the e-commerce space in the last four to five years, when big e-commerce players like Redmart and, thereafter, Lazada, entered the regional market, with Amazon entering Singapore this year.
In terms of contribution from online sales, Tan said it is still in its infancy with most of its sales still coming from brick-and-mortar channels due to the shopping trends in Malaysia and Singapore.
“The death of retail malls has not come to Singapore or Malaysia just yet, unlike in Europe and America, simply because we Asians love to shop. In Asia we also have this problem with weather, it is hot and humid, thus the lure of the air-conditioned malls is just too great. There are also quite a number of malls that are still attracting consumers due to good tenant mix,” he said.
Tan said it will engage with more e-commerce players while deepening its linkages with existing retail channels and trade partners. Combined with its brand and product development efforts, it hopes to maintain its leading position as one of the top three brands in Malaysia.