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The path to entrepreneurship is never smooth, a truth that applies to every entrepreneur. When he embarked on his entrepreneurial journey at the age of 24, he was buried in debt. However, through sheer determination and the trust of friends and family, he transformed adversity into success and established a well-known fashion brand.
Join us today with Exabytes Retail Heroes as we delve into the story of Tracey Star‘s founder and CEO, Johnson Tan. Discover how he navigated the challenges and emerged as a prominent figure in the fast-fashion industry.
Starting from Scratch: The Tracey Star Entrepreneurial Story
Tracey Star’s founder and CEO, Johnson Tan, recalls how he yearned to start his own business at the age of 24, driven by the desire to marry. With a lifelong dream of becoming an entrepreneur, he seized the opportunity. He mortgaged his father’s only home, borrowed money from relatives, and invested RM500,000 to purchase his first container, containing 12,000 handbags. However, upon the arrival of the handbags, he realized he had no sales outlet and without knowledge of selling. Tracey Star resulting in heavy losses in the first year.
Johnson Tan mention that the second year was even more challenging. There were no digital banking services at the time, so he frequently had to visit the bank to print documents personally. Every 2-3 weeks, the bank would call, notifying him of insufficient account balance, urging immediate replenishment, or risk being blacklisted. To repay the bank, he borrowed RM19,000 from his girlfriend, which was her study loan (PTPTN). He also borrowed money from various sources. Despite this, he felt a deep sense of despair and disappointment.
However, his girlfriend encouraged him, emphasizing that everyone believed in him, and he couldn’t give up. Consequently, he started exploring alternative business models. He shifted from renting a storefront to consigning his products at department stores while continuing warehouse sales. During a promotional event hosted by MetroJaya, he achieved outstanding sales performance, leading to significant recognition from the organizers. As a result, his business ideas took off, attracting many employees, and the company expanded its team.
In 2015, he realized the company had seen no significant growth for four consecutive years. He made a crucial decision to seek professional consultant. He began delegating tasks he was unfamiliar to experts, allowing himself to focus on what he was good at. Since then, his sales increased by 500%, and profits surged by 1000%. He learned to let capable people handle tasks, leading to the sustained growth of the company.
“Despite the challenges on the entrepreneurial journey, if you persist in pursuing your dreams and are willing to put in effort and time, you can ultimately achieve success.”
Tracey Star: Three Strategies for Building Strong Customer Communication
Tracey Star is a fast-fashion brand aimed at providing stylish, multi-functional handbags for women. At its inception, founder Johnson Tan brainstormed various names, all of which were rejected by the registry. Eventually, he combined the words “trendy” and “fancy” to create the brand name “Tracey.” Additionally, Johnson’s idol was the famous singer A-Mei, who released an album titled “Star” at that time. Hence, the brand’s founder envisioned Tracey to shine internationally, much like A-Mei, resulting in the name Tracey Star.
Tracey Star operates both online and offline, with 189 sales channels across Malaysia, including its official website and TV shopping platform for consumer convenience. Tracey Star does not have direct retail stores; instead, they employ various strategies to enhance customer management and encourage repeat business. In 2016, they introduced a rewards system that not only offered basic commissions but also monthly surprises, such as cash rewards and products rewards. Exceptional employees received T-shirts and dinner invitations with the boss as recognition, fostering a sense of belonging and motivation among the staff.
The second strategy was to prepare small gifts at each sales point. When customers hesitated, these gifts could be offered, leaving a lasting impression and increasing the likelihood of return visits.
The third strategy was the introduction of gift sets. This service allowed customers’ purchases to be packaged in boxes, which was especially well-received by Malay customers, as it eliminated the hassle of selecting and wrapping gifts. These customers were more likely to return for future purchases.
To improve customer communication, Tracey Star also implemented a new ERP system, making it easier for employees to interact with customers when promoting new products. Online, they manage their own web store and email marketing, enabling customers to view and experience products in stock and make offline purchases when needed, while also providing logistic parcel delivery services.
Providing Personalized Products and Services to Consumers in the Fast-Fashion Industry
Tracey Star brand using different personalized products and services to target different consumers. Through various brands, Tracey Star provides different product positioning and values to consumers. The brand also expands its market through different sales channels, providing customers with a convenient shopping experience.
Tracey Star currently has 189 retail channels in Malaysia and is available on its official website and television shopping platform. Tracey Star aims to be listed company in 2025 or 2026 and become Malaysia’s largest fashion accessories shop, offering customers better choices.
The brand also plans to expand into Southeast Asian countries, including the Philippines and Indonesia. Johnson believes that Tracey Star’s operation not only involves selling handbags and shoes but also influences the entire supply chain. The company’s profits can contribute not only to the company but also to the national economy.
Tracey Star plans to create a 4S center in Klang, complete with tourist and shopping attractions, allowing customers to visit the factory and understand the handbag manufacturing process, with a DIY area. Tracey Star are aims to become a better company through continuous innovation and development.
Transformation and Success Amid the Pandemic
The outbreak of the pandemic presented unprecedented challenges to businesses worldwide. Tracey Star was no exception, with all offline stores closing within 50 days, forcing the brand to confront the challenges of online sales. Fortunately, Tracey Star had an experienced online team in place, well-versed in online sales with strong technical support.
During the pandemic, Tracey Star took multiple measures to address challenges and undergo transformation. The brand developed various new sales channels to expand its customer base. It enlisted the assistance of housewife to support in sales, providing them with additional income. This transformation not only helped the achieve sales growth but also provided additional income to housewife and sales staff.
With professional sales, financial planning, and a dedicated sales team, Tracey Star brand achieved significant growth during the pandemic. Focusing on the operations of women’s handbags and shoes, Tracey Star provides fashionable, versatile products for women. Tracey Star brand’s success during the pandemic can be attributed to its years of experience in online sales and a deep understanding of consumer demand.
Setting Long-Term Goals and Strategies: The Key to SMEs Success
As the owner and operator of SMEs, Johnson believes that continuous growth every year is a positive thing. However, for such enterprises, he recommends setting 3-5 years goals and working diligently to achieve them. These goals can assist businesses in better planning and managing their operations, leading to greater success in the future.
Furthermore, Johnson suggests that businesses should boldly set directions and goals, prioritizing the result in their operations. This means that businesses need to define their long-term objectives and how to achieve them, rather than solely focusing on annual growth rates.
When businesses have clear goals and directions, they can formulate corresponding plans and strategies to better manage their operations, improve production efficiency and quality, enhance customer satisfaction, increase sales, and profits. Companies can also motivate employees to work harder towards achieving the company’s goals by establishing various incentive programs and reward systems.
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