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| Robert Esser won the Global Innovator Award for his high-quality, low-cost cookware |
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A kitchenware chain, riding on the inspired business plan of a well-seasoned chef, is enjoying region-wide success. Pantry Magic, which opened its first shop in Hong Kong, in 2006, now has franchises in several cities across Asia, including Beijing, Shanghai, Jakarta, Singapore, Taipei and Auckland.
Its success has earned Pantry Magic's founder, Robert Esser, the Global Innovator Award from the International Housewares Association. Previous winners have been major retailers such as US-based Williams Sonoma, the Philippines' Rustan's Department Store and Hong Kong's Lane Crawford.
"Even before the financial crunch hit Asia, Pantry Magic had built a steady stream of clientele looking for high-quality cooking utensils at reasonable prices," says Andrew Yeo, Publisher of Retail Asia. Mr Yeo, whose magazine covers the retail industry in the region, nominated Pantry Magic for the award.
"The fact that, by the end of 2008, Pantry Magic had franchised stores in six cities is proof that Mr Esser's innovative business concept is working well in the Asia-Pacific region," he adds.
Secret in the Source
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Retailers from more than 20 countries celebrate their success at the International Housewares Association awards |
That innovative business concept centres on sourcing direct from manufacturers in the Chinese mainland for most products, then branding and shipping them direct to the company's franchises.
"If you want to set up a premium specialty kitchen store, we provide a one-stop solution, from the store layout, to shipping the inventory and helping with the initial set-up and training," Mr Esser says.
"At the end of the day, we are able to provide our franchisees with 2,000 items, making their shipping costs negligible. We are real partners in that sense, because we supply them with products at a low cost."
The idea to open a kitchenware business was born out of frustration. "I noticed that I couldn't buy any nice kitchenware," said the former chef. A visit to the HKTDC Houseware Fair in search of a specialty vessel awards opened his eyes to the possibilities. "I was astonished at the quality of products available from Chinese exhibitors."
With the growing popularity of home cooking in Asia, thanks in part to television food channels, Mr Esser says the obvious step was to set up a niche store to fill the demand for quality pots, pans and kitchen gadgets.
Cost Advantage
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| Pantry Magic stores have a strong following in Asia, defying the economic downturn |
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He says his business concept works in the region because there is no established brand loyalty for kitchenware here. "Clients are more willing to try unknown brands," he says, emphasising that his products, which come with a lifetime warranty, are one-third cheaper than the bigger brand-name cookware.
After three years of solid growth, Mr Esser says his business has slowed somewhat because of the economic downturn, mainly in Hong Kong, Singapore and Auckland, where the cost of living is higher. He's hoping to counter that by opening stores in places such as Bangkok, Kuala Lumpur and Manila, where the target customers are not as badly affected by the downturn. Those cities are similar in demographics to Jakarta, which has been his most successful store to date.
The American chef-turned-entrepreneur plans to take advantage of the economic downturn by increasing his store's product offering 40 per cent by Christmas. He says the downturn has produced a more sourcing-friendly environment: mainland companies are more willing to accept smaller orders because of dwindling markets in the US.
Mr Esser feels fortunate to be among the region's first in his line of business. "I do not have a lot of competition, because it would cost a lot to purchase the inventory you need," he says. "The business requires a large upfront investment. I was lucky enough to get that from investors who had faith in what I was attempting to do."
Related Link:
Pantry Magic
