SMU935

ZENXINORGANIC:FROMBRICKANDMORTARTODIGITAL RETAIL
In July 2020, Sengyee Tai, Executive Director of ZENXIN Organic (Zenxin), gazed at the dark
cloudsracingupthemountain,envelopingitssummitinaneeriemist.The steamingcupofkopi-O 1
satpatientlyonhisdesk,ashecontemplatedonthecurrentsituation.Uncertaintimeswerelooming
overnicheenterpriseslikeZenxinasthespreadoftheCOVID19pandemicwideneditsimpactover millions
of lives globally. Economically, brick and mortar retail businesses worldwide were one of the worst
hit. Zenxin was an organic food producer, selling fresh and packaged organic produce in Southeast
Asia. Although the company had an online store, the bulk of its sales came from retail
supermarketsanditsbrickandmortarstores.Giventhepredictedlong-termeffectsofthepandemic, an
effective digital strategy was the need of the hour. Sengyee knew that to survive in the existing
market, he had to improve his firm’s digital marketing strategy quickly.

Zenxin was established in 2001 in Johor, Malaysia, as an organic farm, producing items such as
vegetables,fruits, andfertilisers. Thecompany grew its business graduallyin Southeast Asia, using
a‘farmtofork’,supply-basedapproachbuildingpartnershipswithsupermarketsandestablishingits
ownbrickandmortarretailstorestogrowitsconsumerbase.ThefirmexpandedintoChinain2010,
whereitfocussedmainlyonorganicdryfoodproductsthatitsourcedfromaselectpoolofsuppliers. In 2018,
Zenxin also set up its online organic store with attractive bundled product offerings and convenient
home delivery services for end consumers. Over the years, the company tried to create
brandawarenessofitsproductsthroughbothbrickandmortarretailandonlinechannels.Itsnetsales
revenuesawconsistentgrowthfrom2014onwards,experiencingaspikeof19.2%in2017and8.7% in
2018.

Zenxin’s brick and mortar retail model flourished and in 2020 the firm became the leading organic
fresh producer and supplier in Southeast Asia. The company’s operations comprised more than 300
hectaresoffarmland,apoolofsalesdistributors(supplyingdirectlyfromthefarmstomorethan100
supermarkets),14brickandmortarretailstores,andarecreationparkinJohor,Malaysia.Itsupplied
awideselectionoforganicproducewithover200varietiesoforganicproductswithaffordableprice points.

Nevertheless, driving sales for organic produce continued to be a challenge, and the company
hoped to achieve further growth by integrating its online and offline marketing strategies.
Moreover, the current pandemic, had thrown a spanner in the woods, and Sengyee was unsure
of a specific strategy thatwaseffectiveenoughto deal withallthe challengesthatthe company

1 Kopi-OisalocalterminSingaporeandMalaysiatorefertoblackcoffeewithsugar.

This case was written by Dr Patricia Lui and Lipika Bhattacharya at the Singapore Management University.The case was
prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective
handlingofamanagerialsituation.Theauthorsmayhavedisguisedcertainnamesandotheridentifyinginformationtoprotect
confidentiality.

Copyright ©2021,Singapore ManagementUniversity Version:2021-04-06

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 SMU-20-0047 Zenxin:FromBrick andMortarto DigitalRetail

had faced in the past three months. These included temporary disruption of distribution channels,
closure of retail stores during lockdown, lower sales volume, and uncertain demand. Zenxin was
trying hard to improve its current Wordpress based organic store through several innovative
customer-centircwebsitestrategies.2Fortunately,onlinesaleshadgoneupsignificantlyafterthe
Singapore government announced the lock down. However, Sengyee was still not clear on what
digital strategies would work best to drive brand awareness and online sales for his firm.

Marketanalystshadprojectedthatthee-commerceindustrywasslatedtobethebiggestbeneficiaries of the
pandemic. Penetration rates were expected to increase to 25% by 2025,up from 15% before Jan
2020.3Moreover, by the end of 2021, 73% of e-commerce sales were expected to occur on a mobile
device.4Given the forecasts, Zenxin could possibly try to expand its online retail presence.

However,marketsurveyshadobservedthatmostconsumersstilllikedto‘seeandfeel’freshproduce and
groceries before purchasing them.5Sipping his kopi-O, Sengyee pondered: How could Zenxin
replicate the ‘see and feel’ experience for consumers on its website? What e-commerce strategies
could his firm implement to attract more customers and drive online sales?

ZENXIN

Zenxin Organic was set up by Tai Kokkong in Johor, Malaysia in 2001. Initially, the company
venturedintoproducingorganicfertiliserusingaJapanesetechniqueoffermentation-usingmicrobe to
turn waste into fertiliser. However, Zenxin found it hard to sell its fertiliser products. Frustrated by
the initial setback, Kokkong ventured into the palm oil industry. He divided his firm into two
subsidiariescateringtoorganicfertiliserfarmingandpalmoilfarming.Hethenexpandedhisorganic
business and started growing fresh vegetables. Organic farming of fresh produce (vegetables, fruits
and herbs) was a new concept at the time in Malaysia, and Kokkong hoped that it would give his
businessanopportunitytocapturethenascentmarket.ZenxinwentontoestablishfarmsinCameron
Highlands, and Gua Musang in Malaysia.

The company also set up two retail stores in Johor (Malaysia) and neighboring Singapore. The
produce from the farms was shipped to these retail stores via road transport, which took anywhere
betweenseventoeighthoursforJohorandaroundninehoursforSingapore.Thelongtransporttime often
caused product rejects and supply issues in the retail outlets. Organic vegetables were
perishableproductsandwererejectediftheylosttheirfreshnessduringroadtravel.Besides,organic
foodwasanewconceptinMalaysiaandneighbouringSingaporeandhadyettogaintractionamongst the
local population. Demand for organic vegetables came mainly from the expatriate community,
which was relatively small (about 7.1% of the total population in Singapore and about 4.2% in
Malaysia)6.Alackofdemandandinefficienttransportmeantthatacceleratingthebusinesswasnext to
impossible.

2 WordPressisafreeopensourcecontentmanagementsystem.
3 Tonya Garcia,“NeimanMarcusislikelyjustthe start: Analystsexpect100,000 storestocloseby2025”,Market
Watch,May4,2020,https://www.marketwatch.com/story/neiman-marcus-is-just-the-start-analysts-expect-100000-stores-to-close-by-
2025-2020-04-20,accessed July 2020.
4 Maryam Mohsin, “10 Ecommerce Trends That You Need to Know in 2020” [Infographic], Oberlo, Mar 12,
2020,https://sg.oberlo.com/blog/ecommerce-
trends#:~:text=Since%202016%2C%20sales%20made%20via,for%20businesses%20to%20tap%20into,accessedJuly2020.
5 AiHisano,HowSight—NotTaste,Smell,orTouch—
BecametheSenseoftheSupermarket,BehavioralScientist,Oct19,2020,https://behavioralscientist.org/how-sight-not-taste-smell-or-touch-
became-the-sense-of-the-supermarket/, accessed Jan 2021.
6 Brenda Yeoh and Weiqiang Lin, “Rapid Growth in Singapore's Immigrant Population Brings Policy Challenges”, Migration
PolicyInstitute,April3,2012,https://www.migrationpolicy.org/article/rapid-growth-singapores-immigrant-population-brings-policy-
challenges,
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accessedJuly2020.

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Attimes,Kokkongfeltthathisbusinesswasdoomedforfailure.ZenxinlostaroundUS$1.64million
ofitsinitialinvestmentinitsfirstthreeyears.Supplyvolatilitywashugeandbecameabigthreatto
thecompany’ssustainability.Onthedemandside,itwashardtosellitsorganicproducethroughits limited
retail channels, and the excess organic produce was often discarded. Yet, during the rainy season,
the farm did not have enough supply to support its retail stores.

Unfazedbytheinitialtroubles,Kokkongventuredintoacquiringmorefarmlandstoincreasesupply.
In2004,ZenxinestablishedtwoneworganicfarmlandsinJohor.Movingitsfarmsclosertoitsretail
outletshelpedZenxinreducethesupplyvolatility.Italsoallowedthecompanytoproduceperishable
products at a faster pace and increase the variety of organic vegetables and fruits it supplied.

Kokkongalsofocusedonexpandingdistributionbybuildingnewsupplierrelationships.Meanwhile, the
grocery sector in Malaysia had started to evolve, and the concept of supermarket had started to gain
traction in many cities in the country. Kokkong focused on building relationships with large
supermarketslikeAeonandGiantandstarteddistributingZenxinorganicfreshproducetothechains.
AlthoughZenxinreceivedastrongresponsefromsupermarketbusinesses,profitremainedanelusive
dream. Big retail supermarkets demanded high margin, leaving meagre profits for producers like
Zenxin. Moreover, there was still low awareness among consumers about organic vegetables and
fruits which made it difficult for Zenxin to market its organic produce at higher prices.

In 2006, Kokkong’s son, Tai Sengyee, joined the company as its Executive Director. A
Computational Finance graduate, Sengyee had exposure to working with international research
companies, but agriculture had always played a significant part in his life. He recalled, “As a child
growing up in a farm, I spent my school holidays working in the farm collecting eggs and washing
chicken barns”.

After Sengyee joined his father to support the business, the duo decided to open the firm’s largest
organic farm – Zenxin Organic Park, in Kluang, Johor. The farm served as an educational and
recreational park to showcase the methods of organic farming, build awareness about organic
produce amongst the local population, and propagate the firm’s brand. Park admissions were free
and included guided tours, cooking classes and recipe sharing sessions. The cooking classes and
recipe sharing sessions were later incorporated in its brick and mortar stores and online store (refer
to Exhibit 1 for Zenxin’s Branding Approach).

Sengyeealso embarked onthe certificationroute by liaising withthe AustraliancompanyNASAA 7

tocertifyZenxin’sorganicfoodproducts.TheNASAAcertificationbrought international exposure
tothecompanyandprovidedmarketingadvantages,suchastargetinghigh-endconsumerswhowere
particular about certified produce. Besides, it allowed Zenxin to reconsider its pricing as it could
price its products slightly higher, and still attract and retain its consumers. Sengyee added,

We enriched our product range. We had started with the ‘Simply Natural’ brand, but quickly
realisedthatbuildingmanydifferentbrandswasdependentonsuppliers,andnotalwaysthebest
strategy. We also realised that going for food certification was tough.

In 2008, Zenxin launched the ‘Organic Grower Initiative’, acquiring 155 acres of farmland and
converted them to organic farms. Many of the farms acquired under the initive were contract farms
owned by smaller farmers but managed by Zenxin. The firm also continued to obtain certification
for all its farms - more than 360 acres of farmland (including contract farms) managed by Zenxin
werecertifiedbyNASAA.In2009,Zenxinforayedintoagro-tourismbusinessandstartedselling

7 NASAA-TheNationalAssociationforSustainableAgricultureAustralia.

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 SMU-20-0047 Zenxin:FromBrick andMortarto DigitalRetail

farm experience packages. These provided visitors with a unique experience of organic farming
practicesanditsimportanceinmaintainingthediversityoftheecology.Zenxinalsotriedtorekindle the
Kampong spirit of the region by setting up a non-profit ground up initiative called Kampong
Kampusin Singapore.8The initiative was alow-carboncommunity campus on 2.6hectares of land
where the company would host activities to create awareness of organic produce and sustainable
living amongst the community.

Zenxin continued to broaden its sales network across Malaysia and Singapore using its ‘farm to
market’ approach and also started to supply its products to supermarkets in Hong Kong, Cambodia
and Indonesia. By2009,the company had becomeone ofthe largestsuppliers oforganic producein
SingaporeandMalaysia,whichattractedtheattentionofmanysuppliersandbuyersaroundtheworld,
leadingtofurtherpartnerships. Soonthefirmalso startedsellinga varietyof dryfoodproducts from
organic sellers under its brand name ‘Simply Natural’, and organic fertilisers under the brand name
‘Midori’. Its perishable food products were sold under the brand name ‘Zenxin Organic’.

GrowthStrategy

In 2010, Zenxin espoused anewvision of becoming Asia’sleading organicfood producer by2030. In

line with its vision, the company expanded into China by opening up an office in Nanning, the
capital city of the Guangxi province. The focus was mainly on importing organic dried foods from
all over the world to sell in China’s retail shops. The company also diversified by acquiring more
farms in Malaysia.

The growth strategy incorporated a multi-pronged approach. Firstly, the focus was on enriching
product offerings and adding newproduct categorieslike beverages, dairyproducts and eggs, grains
and legumes and cooking essentials like oils and sauces to the existing product range. Different
product categories were grouped under different brand names - like dry products under ‘Simply
Natural’ and fresh produce under ‘Zenxin Organic’. Secondly, products were made available in as
many supermarkets as possible. In Singapore, products were supplied to large supermarkets like
Giant, Cold Storage and NTUC while in Malaysia they were supplied to supermarkets like Aeon,
VillageGrocersStoresandGiant.Theideawastohavemerchandise,everywhere,everyday.Thirdly,
thecompanytriedtobuilditsmarket outreachbysettingupanonlineplatformtosellits products.It also tried
to raise awareness and appreciation of organic food culture through social media conversations,
print media advertisements and events like cooking lessons and guided farm tours.
Fourthly,thefirmtriedtoexpanditsproductofferingsinexistingproduct categorieslikevegetables, fruits,
and herbs and spices. Sengyee explained,

We piggybacked on existing logistics as we expanded. We supplied fresh produce to the

supermarkets. We then focused on supplying dry goods to enhance our offering to the
supermarkets. We then strove for excellence in all product categories to drive out competition.

We had our merchandise everywhere, every day – and thatpropelled our brandname. We were
rankedamongthetopthreeorganicfoodsuppliersinMalaysia,amongthetoptwoinSingapore, and in
some markets, we were at the top.

In 2016, Zenxin ventured into the organic food-processing business and began packaging products
likeorganichandmadenoodlesandorganictea.TheprocessingfacilitiesweresetupinMalaysia,and 80
percent of the Simply Natural products received ‘halal’ certification. The company also started

8 Kampong was the term used for traditional villages in the region. The English word ‘compound’ is said to originate from this
Malayword.

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home delivery services of its products in Malaysia and Singapore the same year. In 2018, the
company ventured into selling its products through its own online e-commerce platform. In 2019,
thecompanywasrankedas“TheBestOrganicFoodCompany”inMalaysiabymarketresearchand
consulting firm Frost & Sullivan.

For its Chinamarket, however, Zenxin used a very different strategy for growth. Initially,the focus
was to make a getaway into China through a partnership with a local company in the country. In
2019, Zenxin further expanded its base in China, and marketed its products in the premium range.
This was different from its strategy in Southeast Asia where it was selling its products under the
affordable,regularsupermarketpricerangebracket.Referringtothedistinctlyseparatestrategyused in
China, Sengyee commented,

In China, consumers identified us as a foreign brand. Equipped with international

standardisation, the Zenxin brand stands out, and hence we can market it as a premium brand.
WeselldryproductsinChina,likeourorganicnoodles.Now,wearealsosellingChinaproducts in
Singapore – like dry mushrooms and goji berries.

We use WeChat apps in China. We also use online channels like Chilli.com and Taobao for
selling our products in the country. Building a partnership with local grocery supermarkets in
China is not easy and entails a very different relationship-building approach. We, therefore,
concentrate more on online channels in the country rather than physical stores.

By 2020, Zenxin had become the leading organic fresh producer in Southeast Asia, with operations
spanning 30 farms, 400 employees and 14 retail shops, supplying directly to more than 100
supermarkets through a distribution channel of over 100 dealers.

EcommerceStrategyandImprovementPossibilities

Venturingonlinein2018,Zenxinhadbuiltasmallbutstrongdigitalpresence,withafullyfunctional e-
commerce website where customers could order fresh produce as well as dry food products. The
firm appointed a new team to manageonline sales andprovide customers with promptresponses. It
also implemented a few strategies to boost its ecommerce business. For starters, it tried to create a
presence in social media platforms like Facebook and Instagram, and constantly updated feed on
socialmedia.It also startedpublishing abimonthly newsletter, which was emailed tothesubscriber
base.ThenewslettercarriedarangeofinformationfromeventsorganisedintheOrganicPark,retail outlets
to product promotions, and new tasty recipes from cooking workshops. Customers could subscribe
to the newsletter for free. Additionally, the firm also built tie-ups with other online ecommerce
websites like Redmart, Amazon, Lazada and Happyfresh to sell its products online.

Butmanagingsalesthroughvariousonlineplatformshaditsownsetofchallenges,andthecompany had
experienced slower than expected growth through this channel. Sengyee explained,

Logistics issues of selling online can be difficult. Selling fresh produce online has its own set of
challenges.Weneedtoensurethatoursupplyisfreshwhenitreachestheendcustomerbecause we
cannot risk hurting our brand name. Moreover, delivery of fresh produce can be expensive, as
consumers mostly order in small batches, and cart size is often small.

To counteract the issue of small batch orders, Zenxin had introduced the concept of Organic boxes
onitse-commerceplatform.Organicboxeswereboxesofseasonalfruitsandvegetables. Packaging
productsintogiftsorhamperswasanotherstrategyZenxinhadfocussedon.Userscouldchoose

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bundledproduceboxeswithaweeklyormonthlydeliveryfromthevariousavailablepackages(refer to
Exhibit 3 for Zenxin’s Product Bundles). The firm’s intention was to tap on this strategy further
andbundleorganicproduceboxeswithcomplementaryproducts(liketeaorcookingoil/sauces)and sell
the as festive gift hampers.

EcommercePlatform

Zenxin’s online marketplace used a platform called WooCommerce, which integrated directly with
HubSpot – a third party customer relationship management (CRM) platform that provided inbound
marketing, sales, and customer service. HubSpot had a heat map integration that allowed Zenxin to
view a customer’s online behaviour on the website and online marketplace. All customer records,
regardless of purchase behaviour, were automatically stored in a centralised customer database.
However, the online platform contributed to only a small percentage of the firm’s total revenue.
Sengyeefeltthatonepossiblereasonforthelowonlinesalescouldbethatthee-commerceplatform was
separate and segregated from the company website.

Despite the lukewarm sales, the e-commerce platform provided Sengyee and his team with several
benefits. Asit wasintegrated with HubSpot,theplatform provided assortedservices in categorising
customerdata.Itallowedtheteamtodividecustomersaccordingtodemographics.Customerscould
alsobefilteredoutaccordingtothefrequencyofinteraction,thenumberofnewslettersreceived,etc. This
helped in reaching out to customers with promotions, email advertisements, and newsletters more
effectively. Italso allowed the trackingofthesuccess rateof marketing efforts.Besides,rules could be
implemented to automatically segregate customers into different “buckets”, and specific
metricslike“ifmarketingdiscountcouponsentwithinpastmonth,categorizeinto‘non-mailinglist” could
be applied more effectively to run various programs.

CustomerSegments

Sengyee had observed that customer segmentation was key in driving marketing efforts. From a
global survey for organic food consumers, he had learned that people who brought fresh produce
could be profiled depending on purchase behaviour into three personas – Forwards, Followers, and
Neutrals–eachwiththeir distinctexpectationsandbuyingpatterns.Forwardswerehealthobsessed and
consciously elected health over convenience; and were mostly younger consumers who lived
withfamily and were eagerto examine ‘better forme’alternatives. Althoughthewillingnesstopay for
premium priced organic produce with Forwards was high, the ability to pay was lower.

Followersontheotherhandweremiddleagedconsumerswithamorebalancedperceptionofhealth and
wellness, and were drawn to healthier and more sustainable options given a choice. Their
willingnessand abilityto pay were both high andtheyconstituted a largemarket segment. Neutrals
were elderly consumers and were lesser health conscious, preferring price and convenience over
health. However, they were prepared to experiment with healthier options as long as they did not
have to pay a premium for such items.

From another more concentrated survey specifically for Singapore consumers Sengyee had learned
that, the expatriate population in the country belonging to the middle to high income bracket were
theprimaryconsumersoforganicfoodinSingapore.9Theagecategoryofthebracketwasbetween 26-50
years old. The survey had also notedthatmillennials in the age bracket of 21-34 amongstthe
localpopulationdidnotmindspendingongoodqualityfoodproducts.Moreover,therewasa rising

9 Alice Kwek, Market report, USDA Foreign Agricultural Service, March 27,
2017,https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Organic%20Foods%20_Singapore_Singapore_
3-27-2017.pdf , accessed July 2020.

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awareness about the health benefits of organic produce, which was surely a positive indication for
organic producers. The overall population in Singapore was very health conscious; however, the
general understanding wasthat onlyhealthand fitnessenthusiasts werelikely to be willingto pay a
premium for organic products.

Sengyee felt that the key to building an air-tight digital marketing strategy was to further scrutinise
the consumer segments the company was trying to target. Although, the customer segment which
was more prone to make organic product purchases, was still largely the expatriate population in
Singapore and Malaysia, this was slowly starting to change. The local population in Singapore,
preferredtoeatout. Ontheother hand,themillennial population in thetwo countries were cautious
ofwhattheyconsumed,andpreferredeatingatplaceswhichusedorganicproducts.Besides,Zenxin had
created a strong base of over 20,000 loyal customers over the years, primarily through its store
visits,farmvisitsandcorporatewebsitevisits.Sengyeefeltthatthisdatacouldalsoprovehelpfulin
improving his firm’s customer segmentation strategies further. He explained,

Online and offline are quite different segments. Those who buy in supermarkets, go to websites
likeAmazoniftheydonothavethetimeinaparticularweektogotothebrickandmortarstore. But those
who order on Redmart are regulars (order online every week), unlike those who visit
Amazon.Sotherearetwocategoriesofonlineconsumers–onewhomainlybuyofflineandswitch to
online for specific products only, and second are those who buy mainly online for all their
grocery needs. We want to target the latter.

Sengyee and his team had made other auxiliary observations as well. Customers typically did not
makeapurchaseontheirfirstvisittothewebsite.Theyoftenrequiredproperengagementtomotivate
themtofinallyclickthe‘buy’button.Thisiswhereremarketingstrategiesprovidedpotentialbenefits.
Through a study, Sengyee had found that remarketing strategies could influence the customer to
know more about the Zenxin brand during their online purchase journey, and drive action by
encouraging customers to return to the website. Remarketing could also help increase brand
awareness by improvising better customer engagement experiences.

A marketing survey had found that over 98% of website visitors left without being converted. 10In
any website, customer conversion typically happened only after performed several steps. A study
conducted by Google on the conversion funnel approach had demonstrated that it was not out of
placeforvisitorstotake upto30stepsbeforeconverting.11An effectivesolutionfor this issue was
retargeting, a technique that was applied to consumers who made repeated visits to a website.
Retargeting campaigns had been found to increase search frequency by up to 1046% and site visits
by 726% after customerswereexposedto retargetedads for four weeks.Retargeting couldnotonly
help maximise ROI but also had the potential to increase brand awareness. 12

EvolvingTechnologies

Sengyee had also noted that many online players had started to use evolving technologies like
Artificial Intelligence (AI) for their online marketplace. There were several success stories of e-
commerce using AI, with companies like Amazon and Netflix leading the bandwagon. AI
technologies could not only help improve consumer experience by showing relevant products in a
customer’spurchasejourney,butcouldalsohelporganisationsbuildstrategiestofocusonvaried

10 ReshuRathi,5MistakesMostE-CommerceMarketersMake,Feb17,2016,Inc.https://www.inc.com/reshu-rathi/5-mistakes-most-e-
commerce-marketers-make-but-you-dont-have-
to.html#:~:text=Data%20suggests%2C%2098%25%20of%20your,15%20seconds%20of%20their%20visit. , accessed July 2020.
11 UXPlaybookforRetail,Google,https://services.google.com/fh/files/events/pdf_retail_ux_playbook.pdf,accessedJuly2020.
12 Shayla Price, How to Execute an Effective Ad Retargeting Campaign That Works, Shopify, Sep 9,
2015,https://www.shopify.com.sg/enterprise/62605443-how-to-execute-an-effective-ad-retargeting-campaign-that-
works,accessedJuly2020.
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customer segments differently, and create a personalised shopping experience for the consumer.
Organic product suppliers like ‘Farm to Market’ had implemented AI applications like ‘live chat
box’ and features like ‘WhatsApp business account’ to enable real time interactions between the
consumer and the platform.13 Some e-commerce players in the grocery sector were also using
chatbots and NLP based virtual agents to help customers in their shopping journey. 14

Strategyfor China

For China, Sengyee had concluded that he needed a completely differentset of strategiesfor digital
marketing.AprimaryreasonforthisconsiderationwasthefactthatChinawasamuchbiggermarket,
hadaverydifferentdemographicsetup,andacompletelydifferentculturalsetupthanSoutheastAsia.
However, one common factor between the two markets was the consumer bracket of millennials.

In a research published by the Fung Business Intelligence in 2017, it was noted that the proportion
of Chinese millennials was set to increase from 40% to 46% by 2021. 15Trends in the Chinese
consumer market were driven primarily by millennials with projected consumption share to reach
69% by 2021. It was observed that unlike their parents, millennials in China were born in an era
whenthecountryexperiencedstrongeconomicgrowth.Thisdemographichadgrownupinmoderate
financial conditions, and with the ‘one child policy’, had experienced the advantage of being
showered withmore opulent lifestyles thantheir predecessors. They were thereforemore willingto
spend on everyday items, and were also more brand conscious, and preferred a healthy lifestyle.
Personal well-being was a key motivation.

The Chinese millennials were also very digitally savvy, and preferred to spend their time in
experience generating pursuits. Grocery shopping in supermarkets, was not considered time well
spent. They are willing to pay a premium for delivery services and save time for other activities.
Additionally,Chinesemillennialsspentasignificantamountoftheirtimeengaginginsocialmedia, and
mobile phones were a preferred mode of transaction. In a research conducted by Hylink Group
(2016),ithadbeennotedthatthetopthreemobileactivitiesthatmillennialsengagedinweresurfing social
media and communications, mobile shopping and watching mobile videos. Moreover, the segment
weighted assortment and convenience as key buying factors when purchasing online. 16

EnablersandImpediments

Sengyeehadscouredthroughreportsondigitalmarketingenablersfororganicproduceandhadnoted
thatmostresearchestalkedaboutcustomerpainpointsintraditionalgroceryshoppingaskeyenablers.
Consumers disliked grocery shopping because of the time it consumed and the waiting time it
entailed at checkout lines. Additionally, inconvenience, crowded stores, and travel time to the store
were also noted as drawback factors. Dealing with parking, andfinding out thatthe store was out of
stockforthedesiredproductwerealsoidentifiedaspainpoints.Withevolvingtechnology,improved digital
commerce enablers and diminishing impediments to online shopping many consumers had switched
to online channels for making grocery purchases.17

13 FarmToMarket,“Aboutus”,https://www.farmtomarket.com.sg/,accessedJuly2020.
14 Ibid.
15 UnderstandingChina’snewconsumingclass–themillennials,FungBusinessIntelligence,ChineseConsumersSeries -Issue1,June2017,
https://www.fbicgroup.com/sites/default/files/CCS_series01.pdf , accessed July 2020.
16 MadelynFitzpatrick,TheChinese90'sMillennialReport,Hylink,July20,2016, https://hylinkgroup.com/blog/2016/the-chinese-90s-
millennial-report , accessed July 2020.
17 Pat Conroy, Rich Nanda, Anupam Narula , Digital commerce in the supermarket aisle: Strategies for CPG brands,
Deloitte University Press, 2013, https://www2.deloitte.com/content/dam/insights/us/articles/supermarket-digital-
commerce-cpg-strategies/DUP548_Supermarket_Ecommerce_Final.pdf , accessed July 2020.

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Seeing new items online (through advertisements or social media sites) often motivated consumers
to make their purchases straight away from the comfort of their home. Buying products online also
had the added advantage ofadditional information onthe website which wastypically not available
inabrick&mortarstore.Comparisonofpricesandonlinereviewsactedasfurtherenablerstomore
informedonlinepurchases.The onlineconsumercouldalsolockdownrecurring purchasesin alist,
adding further convenience to the purchase process. Moreover, choosing delivery slots allowed
consumers the flexibility to have the order at the doorstep at a preferred time and schedule.

Impediments to e-commerce adoption in the groceries segment was often the flip side of enablers.
Consumers were often unwilling to pay delivery charges and believed that the minimum order
amount for free shipping was too high. Sometimes they also felt that product prices were higher in
theonlinechannel.Moreover,someconsumersfeltthatonlineshoppingexperiencelackedvisibility to
expiration dates, precise product information, and were prone to accidents like leak from
packaging.Ithadbeennotedthatmanyecommercewebsitesfailedtoattractconsumersbecausethe product
pictures were not accurate or outdated. They also failed to mimic consumer experiences of in-store
shopping like picking thefood container at theback oftheshelf withthe longest expiration date, or
smelling a fruit or vegetable to check its freshness.

Fine-tuningtheEcommerceStrategy

InApril2020,drivenbythetriggerofthetemporaryclosureofitsbrickandmortarstoresduetothe Covid 19
pandemic, Zenxin embarked on an exercise to improve its online marketing strategy to attract more
customers to its ecommerce store. Sengyee and his team implemented a three-pronged
approachtofine-tunethefirm’sdigitalmarketingstrategy.Firstly,theyimplementedchangesonthe
website to improve engagement of visiting consumers. Secondly, they expanded the firm’s social
mediaoutreachtoreachouttoconsumersmoreeffectively.Thirdly,theytriedtoimprovethefirm’s online
presence by affiliating with Google My Business.

WebsiteStrategy

For starters,theyfocussedon using search engineoptimisingtechniques(SEO)toattract customers to

the website. SEO was the process of growing the quality and quantity of a website’s traffic by
increasing the visibility of the website. A few initial hacks were implemented to make the website
more appealing (refer to Exhibit 2 and Exhibit 3 for Website changes implemented in April 2020
after the Covid-19 Pandemic).

Akeyexistingissuewasthedisplayofthecompany’scorporatewebsite ratherthanitse-commerce landing

page when consumers entered the keyword Zenxin in the Google search. This issue was
amendedtolead users to the Zenxin Organice-commerce websitewithmultiplelandingpages. The
amendment allowed the team to segment and target their audience more efficiently by presenting
leads with targeted offers.

Thelandingpagewasalsoimprovedwithadditionalattributestoenticevisitors.A“ShopNow”and “Play
Video” feature was placed at the centre of the landing page, to offer users ease of usage and
moreinformationaboutthebrand.ApersonalmessagefromSengyeewasalsoplacedinthelanding page to
make it more attractive and personalised for users. Additionally, a few issues identified on the
landing page were fixed. For instance, there were too many different product categories on the
landing page, which made it difficult for users to focus on which category to choose from. The
landingpagewaseditedtoreducethenumberofproductcategoriesintothreegroups:OrganicBox, Recipe
Box, and Hot Deals.

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The website was also upgraded to make it more interactive. Static content presented in the website
earlier was replaced with interactive content and customers could click on the images for further
information.Additionalfeatureslikeinformationoncustomisedorganicboxorders,productstories,
customers’ cooking recipes, articles on stay home essentials were also added to the landing page.

Initially, Zenxin’s e-commerce page had a two-step process for shopping and customers were
required to click on “Shop Now” to explore individual products from the specific product category
in the landing page. For example, if the customer wanted to buy noodles, s/he had to go to the
“noodles”section,andthenclick“ShopNow”.Thiswaschangedtoallowuserstodirectlygotothe “Shop
Now” feature and then select the item they wanted to buy from the drop down product
categories,enablingaquickershoppingjourney(refertoExhibit4forImprovedProductDropDown
Categories).

Information provided on the individual products in the listing were also improved. A short product
blurbwasaddedalongwithalargerproductimageintheproductlisting.Additionally,longerproduct details
were added under the Detail section of the product listings (refer to Exhibit 5 for Product
Description).

SocialMedia

Another key areaofconcern for Zenxinwasitssocialmediastrategy.Thefirm used fourInstagram

handles, seven Facebook pages, and a YouTube channel, for its different markets, which led to
inconsistencies in content delivery across the platforms. Sengyee knew that he needed a more
cohesive strategy for social media.

Socialmediawasknowntobealowcostchanneltohelpdevelopbrandequitybyactiveinvolvement
andownershipofabrandthroughconsumerparticipation.Socialmediainteractionscouldpotentially help
build a community around a brand. However, building a brand through social media could be time
consuming and required diversified strategies to cater to different communities across various
platforms. A community in Facebook for example could be very different from a community of
organic produce shoppers in Instagram or LinkedIn, and would require different approaches.
Diversity of Zenxin’s market approach across Southeast Asia and China, further added to the
complexity of devising an integrated strategy.

A few simple tweaks were added to the social media strategy as a starting point. Social media
outreach was also expanded as part of the improved strategy. While the website was already
facilitating a live chat feature on Facebook Messenger; this was further augmented with a live chat
feature on WhatsApp - and a link to the app was provided for user convenience enabling improved
user engagement through one-to-one response. The website had existing links to social media
platformsandconnecteduserswiththecompany’sFacebookandInstagrampages.Thiswasfurther
enhanced to include links to the company’s LinkedIn and YouTube pages. The Zenxin YouTube
channel was fed with new posts and a process was put in place toregularly update the channel with
new videos.

GoogleMy Business

Sengyee and his team also implemented Google My Business strategies to manage Zenxin's online
presence.Google My Business was a free tool for businesses and included specialised ‘Search’ and
‘Map’ features. The tool was used to list Zenxin’s business profile and make the brand easily
traceable.Italloweduserstoknowaboutthecompany’sopeninghours,itslocation,directionstoits

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stores etc. The tool also allowed the company to post photos of its retail stores and list products to
provide customersfurthermotivationsto shop at its outlets(both online and brick &mortar stores).

Google My Business allowed the team to market their offerings in several innovative ways. All
product pictures were accompanied with product information and a call-to-action “Order Online”
feature was added directing the customers to its main website (refer to Exhibit 6 for Google My
Business).Theteammadeitapointtoanswerallcustomerquestionscominginfromtheplatformto build
customer engagement and drive conversions. Proactive responses to review questions had
enabledthefirmtogarneran overallrating of 4.1(outof 5), whichwashighcomparedtoratings of other
world-renowned ecommerce platforms like iHerb (which had a rating of 2.7 for its Singapore
website).

ThePathForward

Although Zenxin had invested in a more expansive digital strategy and implemented several new
features on its website, it was nowhere close to the sophisticated digital strategies implemented by
retailgiantslikeAmazon,andevenlargerlocalonlineretailplayerslikeRedMart.Sengyeerealised
thatmovingforward,thecompanywouldrequireamorestructuredapproachtooptimisingitsdigital
strategyto drive onlineconversions. He ponderedonhis options.He knewforcertainthat solutions
tapping on emerging technologies could improve consumer experiences. The winner in the new era
of digital ecommerce would have obvious advantages in a data driven business world, and organic
products were no exception. But implementing such technologies could be expensive and not
necessarily fruitful.

Sengyee wanted his consumers to receive immediate recommendations to assist them in their
purchasedecision;thehopewastoconvertasmanyvisitsintosalesaspossible,andpropelmoreand
moreconsumerstovisitZenxin’sonlinemarketplace.Atthesametime,Sengyeewantedtointegrate
thefirm’sonlinebusinesswithitsofflinemarketinginitiatives.Hepondered:Howcouldheenhance
Zenxin’s online marketing strategy? What strategies could he implement to further improve the
company’s website and build its brand identity? What could be the key ingredients of Zenxin’s e-
commerce and digital marketing strategy?

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EXHIBIT1:ZENXIN’SBRANDINGAPPROACH(CAMPAIGNS,RECIPETIPS,FARMTOURS)

VideoonFarmtour:https://www.youtube.com/watch?v=w1fXPdsYQxg&t=615s,(from8:45to 21:45)

Source:CompanyData

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EXHIBIT2:ZENXINWEBSITECHANGES

CompanyWebsitebeforeCovid19

EcommerceWebsitebeforeCovid19

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ImprovedWebsitewithmultiplelandingpagesfocussedonecommerceafterCovid19asatOctober 2020.

ImprovedMainWebsitepagewithShopNowfeatureafterCovid19asatOctober 2020.
Source:CompanyData

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EXHIBIT3:NEWWEBSITESTRATEGIESDURINGCOVID-19PANDEMIC

BeforetheCOVID-19pandemic WhentheCOIVID-19pandemicstartedinApril
2020
SEO
When consumers entered the keyword “Zenxin”, When consumers entered the keyword “Zenxin”
Google directed customers to the corporate site rather for an organic search, Google showed “Zenxin
than the online delivery, landing page. Customers had Singapore” with options of multiple landing
to access “online delivery” through clicks to be pages.
redirected to the shopping page.
LandingPage
Thelandingpagedidnotincludeanycall-to-action (CTA). Zenxinplaceda“ShopNow”featureatthecenter
ofthelandingpage,togetherwith“PlayVideo”to
offermoreinformationaboutthebrand.The
executive director’s personal message was on the
landing page.
DisplayofProductCategory
Multiple product categories displayed on the landing Zenxin reduced the number ofproduct categories
page making it hard to search for items. to represent better what it offers.

EncourageConversion-Shopnow
Atwo-stepprocessforshopping wherecustomershad Shopping made easy now with a one-step “Shop
toexploreindividualproductsfromthespecific Now” feature.
products’landingpages.Thebuyingprocesstook longer
time.
ProductInformation
Productshownonthemainpagehadasmall description. Bigger images with a short blurb to explain the
Small product images were used. product. The design was pleasing to the visitors’
eye and enticed them to explore.
Interaction
Staticcontent. Interactive website where customers could click
ontheimagesforfurtherinformation.Thelanding
page included features like stay home essentials,
Organic box - customize your own box, latest
productstories,cookingrecipes,andwhatour
customerssay etc.
CustomerCommunication
Limitedcommunicationchannels-e.g.inactivelive chat - The improvedwebsiteaddedWhatsApp asa new
limited to Facebook Messenger only. form of communication. The website linked to
WhatsApp for convenience and responsive one-
to-one response.
CustomerEngagement
The website connected to its Facebook and Instagram The improved website extended to LinkedIn and
pages. YouTube.ZenxinkeptitsYouTubechannelactive
withregularnewvideosuploaded.

Source:Author’sown-basedonCopmanydataandwebsiteimagecapturedon28thOctober2020(afterCovid19) via
https://web.archive.org/web/20201028024842/https://zenxin.com.sg/

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EXHIBIT4:IMPROVEDDROPDOWNPRODUCTCATEORIES

Previouswebsitehaditem-wiseproductcategorieslistedatthetop.

Newwebsitehadclearlyidentifiedproductcategoriesunderauser-friendlydropdowntab. Source:
Company Data

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EXHIBIT5:IMPROVEDPRODUCTDESCRIPTION

Source:CompanyData

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EXHIBIT6:GOOGLEMYBUSINESS PAGE

Zenxin listeditsproductsunderthe“Products”sectioninGoogleMyBusiness.Allphotoscamewithproductinformation andacall-

to-action“Orderonline”directingthecustomerstoitswebsite. Additionally, Zenxinansweredeachcustomer’s question directly
to build customer engagement and drive conversion.

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Zenxin respondedto mostof the customers’ reviews and questions. The CEO ofZenxin managedthe reviews and replied
personally to the customers’ questions regularly. The overall rating was 4.2, which indicated that the customers were
satisfied with the brand.

Source:CompanyData

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