Dan Lain-Lain (Malay for “and others”) is a weekly column by TIA journalist Emmanuel Samarathisa that dissects the goings-on in the Malaysia tech scene but with a heavy mix of current affairs, policy, and politics. Click here to read past articles.
Most discussions around startup hubs in Malaysia revolve around two areas: the Klang Valley and Penang. Rightfully so – they are the most developed parts of Peninsular Malaysia.
PTT Outdoor founder Mike Chu / Photo credit: Mike Chu
The capital city, Kuala Lumpur, is in the Klang Valley while Penang has long been touted as the “Silicon Valley of the East.” So these states naturally steal the spotlight.
But there are still some who go against the grain: founders who establish startups in places outside Malaysia’s urban bubble, such as in Ipoh.
Situated 200 kilometers from Kuala Lumpur, Ipoh is a city in the state of Perak. It’s located in between Kuala Lumpur and Penang and is served by the country’s major highway, the North-South Expressway.
There’s a punctual intercity rail service you can take from Kuala Lumpur to Ipoh and vice versa. It also has an airport with direct flights to other Malaysian cities as well as Singapore.
If you’re still scratching your head over the location, this is the hometown of Oscar winner Michelle Yeoh. She still has a house there.
When it comes to the tech scene, however, there’s nothing much brewing in Ipoh – or at least that’s what the headlines tell us. Success stories are few and far between.
The latest was in 2022 when German conglomerate Siemens acquired Radica Software, a little-known engineering startup, for an undisclosed sum. Radica still operates out of Ipoh.
But after some digging, I found 33-year-old Mike Chu Chin Hong, an Ipoh native and the founder of PTT Outdoor.
As its name suggests, PTT is an ecommerce platform that offers a wide spectrum of products related to outdoor activities. These range from hiking sticks and sleeping bags to camps and hammocks.
PTT makes 3.5 million ringgit (US$762,000) in yearly revenue. But what differentiates it from other companies or resellers, at least according to Chu, is that it has its own flagship brand, Tahan, named after Peninsular Malaysia’s tallest mountain.
What drew me to Chu, however, is simply the curiosity of running a tech-enabled company outside Kuala Lumpur.
Our interview, edited for brevity and clarity, as follows:
Q: Tell us a bit about PTT Outdoor and why you started the company.
I’m an avid hiker and previously I had trouble finding equipment suitable for Malaysian terrain. This was seven to eight years back. I also needed equipment that I could use in a tropical climate.
Typically there were outdoor gear for other climates and they weren’t suitable for ours and they were much more expensive. So I set out to build a company that could provide something affordable and made for the weather in this region.
We develop products within that range and we try to make them as high quality as possible.
I initially ran PTT as a Facebook group in 2016 and quickly grew the company by setting up a website. Today we have about 15 staff and a warehouse and physical office.
I bootstrapped during the initial stages and lived off my savings, which was then around 8,000 ringgit (US$1,500). But due to low operating costs as I was working from home, I quickly turned a profit.
Q: Why set up in Ipoh?
It was on a personal and business level. In the case of the former, this is my hometown and my parents are here, so I don’t want to be too far from them. That might sound selfish but it is what it is.
On the business side of things, the cost is much cheaper here. As a startup, I had to consider various overheads such as office rental. As an ecommerce platform, I have also rented warehouses for storage.
These things stack up really fast, more so in bigger cities. In some of the more urbanized areas, you’ll get a much smaller office at two or three times the price, depending on your location. So it doesn’t make financial sense.
I run an ecommerce company so I don’t have to worry much about location.
That said, I don’t have a number of things such as “better talent” or “better network.” There are adjustments and sacrifices you need to make when you establish a startup in places like Ipoh. I don’t get the fancy Bangsar South address but one on some unknown street. But no one cares, and I’m not building a real estate company.
Q: Infrastructure wise, Ipoh isn’t Penang or Kuala Lumpur…
When I first started, it really sucked. During the first five years of our business’ life, we didn’t have any broadband lines.
Now, infrastructure is much better. You get high-speed broadband throughout Ipoh. We have numerous logistics hubs so all I need to do is drive for five minutes, drop the parcels at the pickup point, and return to the office.
Q: How did you get connected to the wider startup community?
I remember asking Thomas Yip of Radica Software on how to run a tech-enabled business. After a few sessions, he recommended I join Cradle’s Coach & Grow program.
(Cradle’s Coach & Grow program is organized by the tech agency together with Proficeo, a Kuala Lumpur-based consultancy. The program, over a period of 12 months, consists of classes as well as mentorship sessions.)
Q: But that program is in Kuala Lumpur…
Yes, but I was very committed. So on days where I had to attend sessions, I took the first train to Kuala Lumpur, which was at 5 a.m. I’d reach the capital at 7:30 a.m. and then it’s off to the program. I would be done by 5 p.m. and then it’s back to Ipoh, as I wanted to save on hotel costs as well.
This was my routine for the entire program. But I’m glad I committed to the program. That’s how I met my business partner, Jason Khoo, who was a mentor there.
Q: When did you decide to get a partner onboard?
A: I brought on Jason after running solo for the first five years. He handles the numbers and backend operations while I focus on the front side of things such as sales, marketing, and product development.
Jason’s from Kuala Lumpur and I often make trips to the capital to see him for discussions. He wasn’t my assigned mentor at the Cradle coaching group program but we connected.
He also loves the outdoors. So we kept in touch for about four years before I finally suggested to him that he come onboard.
Q: Is getting talent to run the business a problem?
There are young people returning to Ipoh but not in droves. Those who return do so to spend time with parents. Ipoh is still a “retirement” city where people come to lead a more quiet life.
That said, at PTT, we have flexibility in terms of our working culture with hybrid working arrangements. We offer a substantial salary. I wouldn’t say higher than Kuala Lumpur but relatively better than Ipoh.
Q: You scaled and failed. What happened and what are the lessons learned?
This was pre-pandemic, I think four years ago. We became a tad overconfident and expanded to the Philippines because we wagered that even though they spoke Tagalog, they also spoke English, and their climate was somewhat similar to Malaysia’s.
The Philippines also had been charting a good GDP and they had a population larger than ours.
We set up our Philippine website and Facebook page. We even had sales but weren’t enough to cover costs.
But when we went in, we discovered a number of problems such as fragmented payment facilities. Many customers who ordered from us didn’t have credit cards or were unable to do bank transfers.
Back then they preferred cash on delivery (COD), but the issue with that is how their addresses can be difficult to locate.
And when they would choose COD, the problem back then was that you get charged for the parcel being sent there and you get charged for the parcel being sent back to you.
So we had cases where the recipients couldn’t receive the item for some reason and not only did we not get the payment, but we were also charged twice.
To be sure, I’m still looking at the Philippines. But this time, as for lessons learned, I’d do some things differently.
Aside from identifying payment processes and logistics partners, the major thing I’d do is build a local team. This is, perhaps, the most important lesson.
We did not understand the local market. We thought their Christmas was the same as ours, but it clearly wasn’t.
Q: What moats does an upstart like PTT have against bigger ecommerce platforms or even resellers on Lazada or Shopee?
The first is our own product development, especially under the Tahan brand.
We have done research and made substantial tweaks and changes to our products to differentiate them from what you find elsewhere. These are tailored to what our customers want, which we get from all the data we’ve collected through the years of selling outdoor gear.
Next is intellectual property such as patenting our products, but this one is more long-term given the work and resources involved.
Further down the road, we are trying to come up with AI models to predict, for example, when a product needs restocking or what newer offering to put out. We have the data, especially consumer habits and preferences, since we’ve been doing ecommerce for some time.
It’s not a perfect system yet but we are working on it.
Currency converted from Malaysian ringgit to US dollar: US$1 = 4.58 ringgit.