Attributed to Dato’ Dr Jodness Tan, Founder DJW Labs
As Malaysia gradually makes headway in rebuilding the economy in this endemic phase, the question remains, what sectors will bounce back and emerge as key economic contributors. Where will the engine of the economy reside as we collectively attempt to turn the ignition on this sputtering machine that has been totalled by the pandemic?
As a commercialisation industry veteran with more than 10 years of experience across Malaysia, Singapore and China; the fate of commercialisation and the brands and businesses tied to it are of great interest to me personally.
The pandemic saw Malaysia’s economy contract by 5.6% in 2020, its worst performance since the 1998 financial crisis. At a government level, billions were spent and lost in helping keep individuals, businesses and industries afloat. But the road ahead is not as bumpy as it once was, there is light emerging at the other end of the proverbial tunnel. It is simply a matter of if we can capitalize on it?
Just as the sun does, so too does this light emerge from the east – to be precise a new era of consumption driven by observations and consumer evolutions arising out of China which is steadily spreading across the globe.
In an increasingly digital and connected world, consumers have become more conscious and clued-in. In doing so, they have driven a shift in the commercial market. The key market spenders are now composed largely of Gen Y and Gen Z and they have placed priority on concepts, quality and presentation, moving away from priced-based decision making. Today’s consumers prefer experiences, relationships and algorithms.
This represents a seismic shift, one that brands must be alert to and act fast to capitalise on. To do so, there may even be a need for brands to completely rethink how products are designed, packed, priced and presented.
Gone are the days, where similar and dull products fought for customers’ attention through a price war that only served to devalue markets and impact product quality. The age of copycat products is nearing an end.
Now what reigns supreme is highly differentiated products that are presented impeccably even if they come at a higher price. In this new era of consumption – where consumers live half their lives digitally through social media, presentation and packaging play an almost equally important role as the quality of a product itself. Word of mouth and first impressions have never been more important, as the avenues for product discovery, comparison and review are more open through social media.
For brands to effectively flourish in the new era, they must be innovative and efficient. A key component in successfully making this shift will be the backend transformation and transition from an Original Equipment Manufacturer (OEM) approach to an Original Design Manufacturing (ODM) approach.
As the founder of an ODM myself, and having too served as the head of an OEM for many years, I am only too aware of the differences. ODMs such as my DJW Labs, provide a platform for brands to better meet these new criteria of consumers whilst ensuring product quality and importantly maintaining operating and manufacturing expenditures.
Brands can no longer simply manufacture and put out a product, but must instead adopt more holistic approaches that encompass all aspects of manufacturing and take into consideration the vast and varied demands of today’s consumers. With price no longer being the only sticking point, there is a huge opportunity for innovative brands that collaborate with ODMs to come up with never before seen products and thereby reap huge profits.
This is why in recent times, the ODM market has grown exponentially. Estimates indicate that over the next four years, the ODM market (in combination with the electronic manufacturing services market) will register a 4.1% compound annual growth rate, reaching an approximate market size of USD 636 billion by 2025.
The market is opening up to more thought-out consumer experiences even at high price points and this opens up an opportunity for ODMs to enter the market further, delivering more comprehensive services. This market evolution presents the perfect opportunity for manufacturers to evolve away from conventional mindsets.
For brands, it is equally beneficial, particularly with an influx of SMEs and MSMEs with shallower market consumption knowledge. For instance, at DJW Labs, we focus on providing tools that do not only enable SMEs to develop highly differentiated products but can also leverage a variety of ODM services to further benefit their business. This ultimately creates a tripartite win situation, where ODMs see more market opportunities, brands gain fuller services and consumers are delivered higher quality and more valuable goods.
At the end of the day, it is the holistic nature of ODMs’ services that set them apart and make them ideal for the varied needs of this new era of consumption. For instance, at DJW Labs amongst others, we offer brand management, marketing, logistics, IT management, resource procurement, market research, competitor analysis and more. This makes us a one-stop solution for brands looking to create products that are tailored for this new era of consumption.
We have collectively made it out of a highly difficult few years, and now that we are on the other end, we must seize opportunities at all levels – whether as manufacturers or brand owners. Working synergistically, I believe we are in a prime position to mould our offerings to fit this new era of consumption and thereby unlock millions in potential in the near future.
