It was while they were running a wholesale business that the trio who launched Target Media Australia realised the sheer potential of online shopping.
While supplying the likes of JB Hi-Fi with electronic brands such as Canon and Samsung, the founders realised that their margins were shrinking.
“A lot of retailers were going overseas directly and we saw this as a threat,” says Peter Xie. “Our margins were being squashed while, at the same time, we saw the growing potential of online retail.”
“We were ordering tens of products for customers and then, suddenly, it became 20s and 30s. We felt we could do something different in this market ourselves.”
That point of difference was TopBuy.com.au’s vast range of products and engaged customer service team – the business’ Chinese call centre is fully run and managed by the company, so training and product knowledge is better than most third-party arrangements.
Eventually, the wholesale business dropped off as TopBuy.com.au grew. It now sells in more than 30 niches, including electronics, homeware, toys and cosmetics and has 400,000 Australian customers.
“There is much more competition than when we started, but we moved quickly to have the range and brand names that people want,” says Xie.
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“In online retail, if you’re not growing rapidly, someone else will be. You need to be the category leader or you will be gobbled up.”
The growth that Xie refers to is impressive – the business expects to grow revenue to more than $20 million by the end of the year and forecasts growth of 50% each year for the next three years.
“We want to develop new niche areas and we are looking at overseas markets such as the US and UK,” says Xie. “We also want to raise funding to grow the business at a faster pace over the next year.”
“We have grown from zero to a sizeable and profitable business within a short period of time. Our business now has good scale, and plenty room for further growth.”