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CEO Talking Shop: From clicks to bricks, Baby Kingdom shows it’s possible

E-commerce is on a roll. Traditional brick and mortar stores are discovering the online channel and taking their businesses there in pursuit of the digital consumer. Baby Kingdom is different. It is doing just the opposite. From a purely online retail shopping destination, it is now building actual physical stores and getting good at it.

Founded in May 2002, Baby-Kingdom.com was actually a parenting portal providing information and services for families with infants and young children. The shopping component came very much later.

As a portal, it was a vibrant community with over 450,000 members in Hong Kong and over 550,000 members in China and Taiwan, according to Rainier Sip, Baby Kingdom’s Operation Director. over two million unique visitors, generating more than 350 million page view per month.

Key to its success, he explained, is technology and the content provided by its users.

"Latest technology is in no doubt conducive to virtual communities outreach. By combining various BK subsidiary websites and mobile apps, we maintain a steady member growth continuously. Today, Baby Kingdom is proud to approach over two million unique visitors, generating more than 350 million page view per month. More importantly, we recorded a significant boost up of 650 million page view per month since the launched of mobile app," he shared.

For users, the site’s value proposition is that parents can have the peer support or search latest parenting information easily.

"The topic-centric response feature from the forum could not be copied when compared to other social media tools," Sip said. "We also adopted long tail strategy by not removing any messages in our database. Over the past decade these messages developed into a huge knowledge base, which is accessible by robots of most popular search engines. The SEO greatly contributed to the strong growth of our community."

From this huge base of people with a common concern and shared interests came the idea of expanding services to offer not just information and an interactive and collaborative platform but products as well.

"Nowadays, consumers pay much attention to quality – from food to educations to daily products. We believe parents always give the best to their child; it inspired us to run a retail store that assembled the worldwide well-known brands and the best products," Sip explained.

The site was the no. 1 femme and lifestyle website in Hong Kong and among the top three online channels in Hong Kong’s Digital Brand Index.

In September 2011, it started its retail business via a dealership of skin care products and play mat. Five months later, it opened its first branch shop in TST. Today, a third store is in the works.

Sip shared his views with Retail in Asia on why this strategy makes sense and how it’s brick and mortar stores are complementing its online presence.

Retail In Asia (RIA): What is the difference between your online and offline products and services?

Rainier Sip (RS): We have clear differentiation between online and offline products. We focus on group purchase services in the online platform, with a wide range of products, including educational tools, household items, as well as diapers and milk powders.

At the physical shop, we offer parenting-related services and top-notch products supported with professional consumer services.

Retail business can be tough among traditional players because they have to bear high rental costs as well as marketing costs. In our case, we leverage the promotion costs to our huge member base. By delivering product news and offers from time to time, we are driving consumers to our less-prestigious located stores so that the retail business can be operated cost effectively.

RIA: How does your online presence complement your store operations? How did your customers take to the idea of an online presence having a physical store? 

RS: Baby Kingdom has been running an Internet business for over a decade now. We built up a huge and cohesive online parenting community and also consolidated a strong promotion platform. We expected the physical store to acts as a bridge for us to communicate with virtual users and enhance the loyalty of our members. Besides, we can fully utilize our online advantages to spread out the products information and promotion.
 
RIA: What are the challenges you encountered in moving from "clicks" to "bricks"? What lessons can you share with other online portals venturing into traditional retailing?

RS: Without a doubt, to start a traditional retail store requires higher investment than the online business. We also faced challenges from managing the trade-offs from separation and integration of these distinct yet related businesses. So, a comprehensive plan on risk assessment, marketing strategy and even crises management is the essential of business. Geographic factor and product distribution channels are also challenges we encountered when compared to online business.

RIA: You are planning to open your third retail shop soon. Why is your business strategy successful in this age when retail stores are banking more on their online presence to boost sales?

RS: Baby Kingdom has been striving to provide quality lifestyle to families. Consistent with this, we continuously commit to liaise with different worldwide quality brands such as skin care products – Helan from Italy or Safety play mat – Dwinguler from Korea. We believe effective marketing strategy involves WOM. According to our internal page view analysis, comments and information search on particular products or services become essential in their decision-making process.

RIA: Baby Kingdom is also a web development company and marketing firm. How does it complement your retail business?

RS: Different functions lead to a hybrid. To cite an instance, quality play mat, Dwinguler, will be used as the designated play mat in the Baby Crawling Contest, which increases its exposure physically and creates WOM marketing effects easily and effectively.

Another example is we always have functions and mini gatherings held in our stores so that customers can interact with us and get a glimpse of our retail outlets.

CEO Talking Shop is the Retail in Asia section devoted to interviews with brand CEOs and retail industry leaders.