2017 April
When Fermented Tofu Meets Online Shopping

Ztore, an online retail business, offers common general merchandise goods, but also supports locally created, original products to bring in high-quality niche products giving customers another option.


Like many people who are attracted by the abundant opportunities in the era of e-commerce, three members of the post-1980 generation grabbed the chance to jointly set up an online grocery store which has now become very popular. Ztore co-founder Danny pointed out that: “E-commerce is an unstoppable tide. The first wave involving Amazon, Alibaba and others has passed. In the next wave, we must know how to create value for our brands.”


Danny, who was previously engaged in the software industry, felt that the development of the industry was close to the bottleneck, so he considered investing in the B2C model. He took the opportunity and partnered with Clarence, responsible for financing, and Jack, expert at purchasing, to set up Ztore. Ztore offers more than 6,000 items, of which 40% are high-quality products rarely found in supermarkets, including chili oil of a well-established local brand, handmade beer produced in Hong Kong, garlic vinegar of a social enterprise, organic cleaning agents, and fair trade coffee beans. The other 60% are traditional supermarket products for the convenience of the public.


Attracting businesses with persistent cajoling and sincerity

It is always difficult to get things started, even more so when raising funds. The general public has a low confidence in e-commerce. Well-established brands with a long history are no exception. For this reason, Ztore was frequently given the cold-shoulder treatment.


Danny said, “Loyal fans of Tai Ma fermented tofu in Kwun Tong, Yu Kwen Yik chili sauce in Sai Ying Pun and Chiu Heung Yuen in Yuen Long will often travel long distances to patronise them no matter how remote the place is.” These well-established brands have an endless stream of customers even without much publicity.


Danny said that in order to impress these brands, they had to first understand their story and see things from their standpoint so that he can meet their needs. They chose the most sincere approach by persistently cajoling them until they signed up.


Payment on delivery to build confidence

Having worked at a software company, Danny is familiar with digital technology. Hence, regardless of the costs involved, he created bar codes for these traditional products and standardised the businesses with the help of technology to move the products one big step towards the market.


Most people are still wary of the online virtual world as they remain attached to the touch-and-feel approach of consumption. In this regard, Ztore provides payment-on-delivery services so that customers have something to see and touch, and gain confidence in slowly shifting to the mode of online shopping.


Sticking to ‘last-km service’

Currently in partnership with SF Express, Ztore promises same-day delivery service for customers. It also invests in offering “last-km service” which has deterred many companies because of the prohibitive costs. “Last-km service” refers to delivery to the doorstep. They are also committed to delivery by 12:00 midnight for orders placed before 12:00 noon for the convenience of office workers who are too tired to worry about such mundane stuff after a busy day at work.


The co-founders are not afraid of competition as Ztore has different positioning from its rivals. However, sometimes businesses resort to price promotions in order to attract customers. Nevertheless, the two bosses said they welcome healthy competition but reject price wars. Danny pointed out that while vicious competition such as price wars can push down the prices of merchandise, ultimately suppliers are the victims if businesses are to maintain the same level of profits. Clarence said that fortunately consumers also understand this concept; they are not too concerned about the dollar-and-cents difference from the supermarkets as they focus on value.