Want veggies online? Try Malaysia's first virtual grocery store

If you think business to consumer (B2C) is heading for the trash heap as far as Malaysia is concerned, you better think again. A Malaysian entrepreneur is trying to make this type of e-commerce trendy in the country. And he wants to do it with perishables like fish and vegetables. You may think he is a little behind time as far as B2C is concerned, considering the fact that B2C has not really soared to the level of expectations many people in the West had harbored in the early days of Internet commerce.

But Pasarborong.com CEO Nik Rushdi Nik Hassan is upbeat that his venture will be able to attract Malaysians to congregate on the Internet and order fish and other household essentials from his Web site. It is probably the only one of its kind in Malaysia which sells and delivers groceries to the customers' doorsteps, claims Nik Rushdi. Operations began in the third week of July and the Web business services several townships like Damansara, Bangsar, Kelana Jaya and several areas in Petaling Jaya. Nik Rushdi says currently Pasarborong has a consistent customer base of a hundred households which translates into about 200 registered customers.

But why B2C when it is being avoided like the plague here and abroad? Nik Rushdi is convinced B2C has gotten a lot of bad publicity and if handled carefully and competently, it can work--even in Malaysia. He doesn't buy the notion that there is not enough critical mass for an Internet play like Pasarborong to thrive on.

"I think as far as critical mass for our business is concerned, we have it," Nik Rushdi says with a gusto of resolve. "In Malaysia, it's all about the confidence game. Once you gain the trust of your customers, they will keep coming back."

"Why we say we have critical mass is because of this factor; we did a survey of about 300 households prior to starting this business and about 70 percent of the respondents said they would give Pasarborong.com a try," he claims. The issue here is that one have to customize operations specifically for local needs, Nik Rushdi points out. He is targetting another 3,000 households in high-populated areas like Subang Jaya and Ampang by the end of this year.

For example, Malaysians are very averse to the idea of releasing credit card information over the Internet. Shoppers can simply click on the items they want and upon delivery the next day, shoppers can pay the deliveryman cash on delivery. Nik Rushdi says this is one way he and his team is getting around the issue of e-transactions.

"And when we started out in late July, we inevitably faced teething problems and there were admittedly, some late or wrong deliveries. But we went back to the customers promptly, apologized, and even threw in a fruit basket."

"If the fish is not up to the customer's expectations, we'll give him or her a bigger fish! Customer service is key in this business and even though Malaysians are not really noted for their personalized service, we intend to change all that," he noted.

You want fresh? We'll give you fresh!
Nik Rushdi says his motivation to start an online grocery store was largely due to his own difficulty in getting the right types of fish at the right price. "Fish is so expensive here!," he laments with a chuckle. Nik Rushdi assures surfers that fish on his virtual store is fresher than anything local supermarkets dish out on its aisles. "When we say fresh, we mean fresh!"

An investor in the Pasarborong.com venture, an analyst who declined to be named, told Malaysia.CNET.com that the freshest fish in any supermarket is three days old whereas Pasarborong.com guarantees fish that is not a day and half old. Pasarborong.com gets its fish and poultry from Selayang wet market which is the only wholesalers market in Kuala Lumpur. Nik Rushdi says his workers get the items they need at 2am in the morning to ensure customers get their orders within the same day.

And prices of items are competitively priced, in some cases 10 percent lower than supermarket prices. "Our overheads are low. We don't have a fancy physical store (except a packing and distribution centre), practically no inventory thus cutting down on storage space and only a staff of ten people," Nik Rushdi says.

And what about his plans for the future? Nik Rushdi says his team is in the midst of looking for additional funding to expand to other townships in the Klang Valley as well as to beef its still nascent B2B operations. He says another RM5 million is being targeted. Currently, a group of private investors have pumped in RM350,000 to get Pasarborong off the ground and running.

But Nik Rushdi says B2C will still remain in the forefront as "we have to create the demand from B2C in order to stimulate the B2B side". Plans obviously include being THE supplier of fish, poultry and vegetables to restaurants and hotels. Right now Pasarborong.com has started modestly in the B2B line, supplying to three restaurants in the city. But money, Nik Rushdi says, is critical to get this expanded and moving.

3Capital.com chief executive Sivapalan Vivekarajah who is assisting Nik Rushdi and his team to get additional venture capital funds, says even though he (Sivapalan) is not a big fan of the B2C concept, he feels Pasarborong.com has what it takes to succeed locally. The most important asset they own, Sivapalan adds, is a good management team. "Foreign VCs may also be interested if they are keen on a Malaysian Internet company strictly servicing local needs."