Sweet Taste of Great Success in the Bird's Nest Business
Frank Pak, Managing Director, Home of Swallows Limited
For the longest time, it was thought that bird's nest was very expensive and only the wealthy could afford to buy such products for consumption. Hong Kong entrepreneur, Frank Pak, however, was going to change this mindset and make bird's nest affordable and available for everyone and anywhere.
Frank, a former property practitioner with no prior experience in the bird's nest business, is Managing Director of Home of Swallows. He founded the company in May of 2000, and despite the economic downturn, has built Home of Swallows into a commercial success, having expanded the business into 30 retail stores throughout Hong Kong, Macau and Mainland China. Frank feels the keys to success were the ability to identify a unique perspective on the bird's nest industry, coming in with a flexible approach in doing business, and his own background in the property market.
Property Practitioner Turned Entrepreneur
After obtaining his BBA degree in Canada in 1988, Frank began his career as a management trainee at an established corporation's property division. He changed jobs frequently because he felt none of them were his true calling and in 1997 he even founded his own property agency. Frank's experience in the property field, both as an employee working at a large firm and running his own business, helped contribute to his eventual success in the bird's nest business. Said Frank, "I gained valuable insights from my experience working at both large and small enterprises. With this knowledge, I was able to manage every operational facet of the much bigger-scale business of Home of Swallows."
All About the Details
Frank's first encounter with bird's nest began when he represented a property owner to lease a shop to a bird's nest wholesale merchant for retailing business. He became acquainted with the merchant and pondered the idea of retailing the product. Frank observed an interesting market behavior: rather than keeping a tight grip on their finances during the economic recession, bird's nest retailers actually expanded their businesses ?to Frank, this signified a growing demand for the product instead of the reverse.
Frank says that learning about every detail pertaining to a particular industry or industries is key to successfully doing business. "I worked seven days a week and looked into every aspect of my business," he said, explaining how an outsider like himself turned into a bird's nest entrepreneur within a year. "It's important to ask as many questions as possible, because often asking questions is what inspires new, exciting, and potentially lucrative ideas."
Spending Little to Create Big Success
Despite having limited capital when he started Home of Swallows during the economic downturn in 2000, Frank understood clearly that company branding was the key to success, and that a positive cash flow was essential to supporting a healthy business operation. He also knew that for any business to remain competitive and ensure multiple revenue streams, he had to offer a variety of different products ?without endangering and diluting the value of the core business. Frank expanded on the company's main business and provided additional side products, such as bird's nest drinks and soft sweets, to supplement the dried and instant products.
"Being financially well-managed is a crucial element of a business start-up," said Frank, on finding the right way to enter the market quickly. It is also important to find the right venue and store location for a business because that provides an opportunity to build a large base of customers. Because of his background in real estate, Frank was able to identify several good choices for opening his Home of Swallows shops. He ended up renting a retail area of the Wing On Department Store in Whampoa and was successful in attracting a customer base early on. "It's not always the case but generally speaking, managing the cash flow with a retail area inside the department store is much better than running an individual retail store in several aspects, including saving costs on store decoration and rental deposits, together with a more secure and reliable management that handles many types of sales transactions." After trying the Wing On Department Store in 2001, Frank was encouraged to hunt for a second retail spot in the following year.
"Finding the second location was not an easy task, since only the JUSCO Store in Whampoa offered a retail area for us, meaning two retail outlets would be operating in the same district." However, Frank decided to move the bird's nest sales channel to JUSCO. With his earlier working experience in corporate branding and as a real estate agent, Frank negotiated excellent deals with the JUSCO department stores, because of the branches being strategically and conveniently located in areas that covered more target consumers. In just two years' time, Home of Swallows was made available in numerous JUSCO Stores throughout Hong Kong.
Franks noted that, to effectively establish a brand, companies sometimes need to take risks and make bold business decisions. When the Prince Edward MTR Station underwent renovations, Frank took the initiative of selling his upscale product there, leveraging on an innovative and attractive shop design to boost sales.
"Building brand royalty in the MTR was more efficient than placing advertisements," Frank commented. It turned out that making use of such a busy station, where thousands of commuters change trains every day, was a good business decision and created another channel to attract new business. "Since the monthly cost of retail rental space and placing a 500mm x 700mm billboard advertising along the escalator at that MTR station are nearly the same, we preferred to have an actual retail store in the station because this would be a more effective method of drawing customer attention and driving sales directly." Home of Swallows is currently distributed in six MTR stations. The approach of expanding into areas where there is a huge movement of people with easy access to bird's nest helped elevate the brand to the point where it now holds a leading position in the market and competitors have started to follow suit.
Specialization, Diversification and Popularization
On the path to success, Frank points to three central elements, which he refers to as the 'doctrine of the three -tions' ?namely specialization, diversification and popularization. "By providing a wide variety of choices, diversification provides opportunities to reach out to both the high and low end markets." However, diversification need not be mutually exclusive to specialization. "Company logos, colors, branding and outlet operations ?all of these fall under corporate identity and brand development, and, if done correctly, can deliver a very clear and consistent message to consumers." Frank said he will continue to develop more products and explore business opportunities focused in the bird's nest industry. His brand building efforts also helped the push for popularization.
Frank sees the 'Made in Hong Kong' label as a valuable asset in the highly lucrative Mainland China market, and elsewhere in the Asia Pacific region. If there is a chance to expand a local business outside of Hong Kong, companies should explore such a move because of the tremendous opportunities there are to reach out to new consumers. Frank is planning to expand Home of Swallows in Macau, Taiwan, Singapore, Indonesia, Korea, Japan and wherever there are Chinese people. Ultimately he aims at positioning his company's products as gifts that family and friends give out during special occasions.
Contributing to the community is also an effective and indirect way of building a brand, and Frank has realized many benefits of running a socially responsible corporation. By sponsoring charities and participating in different speaking opportunities for trade events, he learned how companies gradually establish a healthy image and naturally draw customers to a business more effectively than simply making use of high-priced advertising or always offering special discounts.
The road to success for Frank has been a humble one over the years but he remained undaunted by his desire to learn and try new things. "You never know the outcome unless you try." By learning alongside and solving challenges with his employees, he created the opportunity for win-win situations in business.
"Never give up" is Frank's overriding philosophy to doing business. Working hard and making the right decisions have resulted in him being able to enjoy the sweet taste of success in doing business in the bird's nest industry.
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