In the first part of a four-week series, three companies share with Aaron Tan their stories of how they expanded from humble beginnings to make their mark at home and overseas.
The Sunday Times
September 6, 2015
WALK into any MDS store in Singapore and you will find racks of stylish women’s wear that often give more established fashion labels a run for their money.
In fact, to maintain its competitive edge over rivals in the fashion industry, the company launches over 70 new designs a week. “MDS is a fast-fashion company,” says Mr Joe Phua, director of MDS Group. “We offer trendy and affordable products of reasonable quality in the Asia market that resonate with consumers.”
Mr Phua set up MDS with his business partner, Ms Georgiana Yeo, in 2006 when they were students. With 22 retail stores across Singapore, Indonesia, Cambodia and Myanmar, the company has expanded rapidly and now its online store is also enjoying growing sales.
“It was a conscious decision to enterthe fashion industry,” says Mr Phua.
“Georgiana is passionate about the fashion industry and has an eye for detail, while I’m always searching for an opportunity to invest in the clothing, food, property or transportation industry.”
With just $3,000, the duo set up an online store to sell their products.
Business picked up quickly, as the company had a first-mover advantage in the nascent e-commerce industry at that time.
However, it lacked credibility as a fashion brand during its early days, as it was competing with many bigger local and overseas brands in the market. “We managed to overcome this over time through consistency in our products,” Mr Phua says.
Much of MDS’ success is built on the company’s core values of innovation and design.
“The team works really hard. We monitor and tweak the types of products across product categories all the time. Our design inspirations come from trend reports, competitive analyses and in-house data mining,” he says.
In addition, MDS relies on the sales data from its online and physical stores to better understand buying trends, so it can cater to consumer preferences across online and offline channels.
At the same time, it also takes in feedback from its customers, as there have been instances when it faced a “disconnect” with their purchase patterns, Mr Phua says.
“What we assumed would sell well did not meet expectations, and the products we thought wouldn’t sell well became top-sellers,” he reveals.
“I’ve learnt that observing and listening carefully to what your customers want is the key to increase sales conversion.”
To further grow its overseas footprint, MDS has developed a franchise programme, which was supported by Spring Singapore in 2013, that documents experiences, to-dos and know-hows MDS has picked up over the years. It covers topics ranging from MDS’ values and operations to expansion capabilities.
“As of today, we have signed up franchisees in Indonesia, Cambodia, Myanmar and Malaysia, and are talking to potential franchisees in Vietnam, the Philippines, India, China and Egypt,” he says.
On choosing the franchise route over other expansion models, Mr Phua says: “Having two entrepreneurs learn about the business is always better than one. We are working towards having 60 per cent of our stores run by franchisees, with the rest wholly owned by us.”
For more information on the retail sector and stories on how retailers have built their capabilities, please visit www.spring.gov.sg/retail or email firstname.lastname@example.org.