The story of Rotiboy is also an interesting entrepreneurship case study for its remarkable experience undergoing a meteoric rise followed by a spectacular fall soon after.
History:
Rotiboy bakesshoppe was born in April 1998 in Bukit Mertajam, Penang Malaysia. Founded by Hiro Tan, this company prospers with a mission to provide fresh, good quality bread and great tasting cakes to customers in the neighborhood. With strict control on shelve life to ensure freshness and taste, Rotiboy became a household name in Bukit Mertajam, Rotiboy Bakeshoppe were known for their freshly make cakes and high quality bread.
Rotiboy moved to Kuala Lumpur and started its first outlet in Wisma Central, Jalan Ampang in January 2002 and since then have experienced phenomenal growth in the sales of its Mexican bun, now branded as Rotiboybun or Rotiboy.
Founder Biography:
Hiro Tan – founder and managing direction of Rotiboy bakeshoppe Sdn Bhd. A Penangite who graduated from the University of Malaya with an Economics degree, journeyed through a rough road to success. He first ventured into mushrooms business after graduation but that did not succeed. He was with Prudential Assurance for 9 months before joining Singapore Airlines as a trainee station manager in 1991. He continued his career in Singapore in the property business before returning to Penang in 1998 to start Rotiboy.
With his sister providing the recipes and know how and his brother actively assisting him, Rotiboy bakeshoppe was born. In the early years, Rotiboy is just another conventional bakery depending on cakes sales to sustain the business. Even though Rotiboy does make a name for itself by selling fresh, good tasting cakes, the business is neither growing nor failing. A decision was then taken to try for greener pastures in Klang Valley at the end of 2001.
Business took a turn for the worse initially and eventually he had to make a last stand at Wisma Central. He had to borrow money, sell his brother’s car and his apartment to finance the move. By God’s grace and some kind human souls, he managed to sell more and more buns and by the end of 2002, Rotiboy is selling about 6000 a day. He never looked back since then. In 2004, Rotiboy International Pte Ltd was established to take on the role in the international market. Rotiboy was exported to Singapore, Indonesia and Thailand.
Seeing the overwhelming success of Rotiboy, copycats and imitators started sprouting like mushrooms. Soon we see all Pappa Roti, Roti Mama, Roti Mum, Baker’s Boy, Mr Bun and all sorts of bun shops all over the places. They all sniffed opportunities and they want one thing in common – profits.
However, good things came to an almost abrupt end. While the buns were getting a crazy attention in 2004 and 2005, things were in the reverse from the beginning of year 2006. Rotiboy was no longer people’s savior. It is no longer the in-thing for the day. The fall was so catastrophic that the company had to pull out almost its entire operation in Singapore. The normally crazed cream filled buns were not selling like hot cakes anymore.
Apart from Rotiboy, its copycats and imitators suffer the same fate, if not worse.
Why is this so? Why a popular product underwent a free fall within a short span of time?
According to one of the owners of the outlets, the bun was no longer selling much because ‘the fad is over’. They also learnt an important lesson, which is to start diversifying products in anticipation of market uncertainty selling merely one product. They need to keep reinventing and reengineering the products and services to cater the evolving demand and market.
Maybe, the bun market will be booming again when the next fad cycle arrives, but when it will come or whether it will eventually be here is surely be a long debate.
Moral of the story is; it is not a wise move to start a business because of some buzz or hype that last only for a short while. A viable business model takes account the sustainability of the demand and the market. Keep that in mind when opening a new business.
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