Home-based F&B businesses flourish amid pandemic
Home-based bakeries have taken off amid the pandemic. (Photo: Tang See Kit, Lookie Cookie)
SINGAPORE: Baking was her hobby for more than 10 years but Josephine Wee never thought that her homemade cookies were good enough to be sold.
“My children love my cookies and always say why not sell them, but making for your family and selling to strangers are two different things,” she said. “When people pay, they expect some standard. How can I sell?”
But the 51-year-old, who worked as a tour guide for the past 30 years, decided to give it a shot last year after the COVID-19 pandemic annihilated the tourism industry.
Wanting to stay active after work dried up by March last year, Mrs Wee signed up for a variety of courses. It was at one of these courses offered by the NTUC LearningHub where she learnt about e-commerce and digital marketing.
In June, she took the first step to list her baked goods on Carousell.
“My boys told me ‘Don’t worry, you can do it!’” she recalled with a smile.
Orders did come through – first from her relatives, then strangers, building up into a consistent demand that Mrs Wee would spend more than 10 hours in her kitchen on some days.
The demand went on to October before reaching a lull in November. But the home baker did not have to worry as the year-end festive season proved to be a fillip for sales.
“I saw three to four times my normal sales for Christmas. It was sheer madness.”
So far, the income from her home bakery Jo Bakes remains nowhere near her previous salary but Mrs Wee said it is “enough to get by” for her family. She is now the sole breadwinner after the pandemic also put her husband, a self-employed entertainer, out of work.
“It’s better than I expected because when I first started, I was clueless if I was going to make it. There are so many home bakers out there too,” she said. “So I’m just very thankful.”
FLOURISHING TRADE
Mrs Wee is not alone in starting a home-based business and surviving amid the pandemic.
These micro-entrepreneurs were impacted by curbs put in place during the “circuit breaker” period, but after restrictions were lifted from May 12, the cottage industry – referring to small businesses that run from home – seemed to be thriving.
The boom in the number of new entrants, based on observations of social media which many of these home-based businesses rely on, stemmed from two factors, said Associate Professor Lawrence Loh from the National University of Singapore’s (NUS) business school.
First, a further shift to online selling which comes almost hand in hand with the pivoting away from bricks and mortar. Second, starting out at home, which helps to cut costs, can be an alternative for those who have lost their jobs amid the pandemic, he said.
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To be sure, there are also others who are taking the opportunity to pursue an entrepreneurial dream.
Ms Chloe Ong set up an online shop Qicha to sell homemade tea in December last year. The 30-year-old, who is still a full-time employee at a tech start-up, decided to give it a go despite the pandemic-induced economic downturn as she believes she is among the few offering traditional Chinese medicine (TCM) remedies in pre-packed sachets.
Her tea offerings, which have been certified by her mother who is a TCM practitioner, came about when she started working from home last year and was looking for alternatives to coffee.
“With my mum’s recipes, I’ll pop by different TCM stores to buy the ingredients and make my own teabags. Then I wondered why there isn’t anything like that for people to consume herbal tea more easily.
“So I thought maybe my tea bags can help those who are caffeine sensitive or enjoy TCM like me.”
Ms Ong said she put in nearly S$10,000 to get started, and orders have been better than expected. As the pandemic drove consumers to buy online and to be more health-conscious, she sold 600 boxes of tea within the first month.
For Jessica Chow, leaving a full-time job last year to concentrate on baking full time was “a challenging decision” to make.
Orders for her home bakery Lookie Cookie, which has been around “as a pet project” since more than a year ago, was on the rise but the 28-year-old was not sure if demand would last.
Although mixing flour, eggs and sugar and coming up with something delicious like a stuffed cookie was a “cathartic” process that she enjoyed since she was a teenager, she was also given a new role at work which was worth giving a shot at.
Besides, quitting in the middle of a pandemic seemed “too risky”, recalled Ms Chow.
“I was scared but at the same, I also really wanted to try doing it full time. In the end, I know if I don’t quit to do it now, I’d probably never know how it will be like so I decided to just do it,” she said.
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EASE OF STARTING UP
For those new to running a business, starting out at home is “a lower risk move” as it does not require a large start-up capital and has other benefits such as flexible working hours, according to those who spoke to CNA.
The ever-growing trend of online shopping also meant that starting out was as easy as setting up a social media account.
Facebook and Instagram are the popular social media platforms that home-based businesses here use to promote their products or services. Instagram, in particular, with its growing user base and visual layout, has been most effective in translating “likes” into orders.
Ms Ong said: “Between Facebook and Instagram, Instagram is the one that I’ve seen more interest and engagements.”
Echoing that, Mrs Wee said Instagram is “very easy to use” and has “more serious customers” compared with other e-commerce platforms.
Social commerce – e-commerce via social media platforms – has grown steadily in Singapore, with orders up 155 per cent year-on-year in the first six months last year, observed artificial intelligence solutions start-up iKala. The total value of merchandise sold saw an even bigger jump of nearly seven-fold over the same period.
iKala’s co-founder and chief executive Sega Cheng believes social commerce is here to stay after consumers have experienced the ease and convenience of shopping on social media.
“Even before the pandemic, the agility and convenience of shopping on social media made it an attractive alternative for people but since COVID-19, it has well and truly taken off,” he said.
Social media platforms are recognising that, with Facebook rolling out business-friendly features such as Facebook Shops and Instagram Shopping last year. In Singapore, it also announced a grant worth about S$4.75 million aimed at supporting more than 800 small businesses.
READ: Facebook to give S$4.75 million in grants to small Singapore businesses hit by COVID-19
“Small businesses are the heart of our communities and the backbone of our economy. They have also been some of the hardest hit by COVID-19, impacting lives and livelihoods for so many Singaporeans,” said a company spokesperson.
Home-based business owners have also been given a helping hand with the advent of e-payment methods. For instance, PayNow has proved to be “very convenient”, said Mrs Wee.
Recalling how she used to send photos of ATM receipts after making payments for online purchases, Mrs Wee said: “Almost immediately after an order is confirmed, payment can be made and you can check if you’ve received it. It is really amazing and very convenient for small businesses like ours.”
CONVERTING “LIKES” TO ORDERS
But the low entry barriers also means an ever influx of new players. And in the crowded space that is social media, it can be hard to capture eyeballs and translate them into orders.
iKala’s Mr Cheng said creating more real-time interaction and immersive experiences for customers is the way to go for social retailers. But this may be tricky for home-based businesses given how they run solo and have to divide their time between fulfilling orders and managing their online presence.
The three business owners are very much aware of the stiff competition and try to update their social media pages regularly. These can be posts with photos that are carefully worded and using trending hashtags, or Instagram stories that show what goes on in the kitchens as part of customer engagement.
“It is a double-edged sword and you’ll need to find a way to stand out from the saturated market,” said Ms Chow. One way, according to the new entrepreneur, is to have eye-catching photos, which is why she signed up for a food photography course last month.
“I think having a nice food photo really helps to capture attention and make someone stop scrolling. The world of food photography is so vast so I wanted to put myself through a course to get better at it, and transition to using a camera which is one of my 2021 goals,” Ms Chow added.
Mastering the art of engagement on social media also comes with a learning curve for Ms Ong, who said she has been paying more attention to how other businesses craft their posts on Instagram. She also tells herself to think from a customer’s perspective.
“If I’m the one buying the tea, what is it that I want to see from this Instagram page? Instead of promotions, I think I will want to know what are the herbs and their benefits,” she said.
“TCM is also something that can be taken for the long term so I thought I can educate people, especially the younger generation, about TCM and its concepts like what is defined as ‘heaty’.”
Asked if they are also concerned about demand tapering off amid competition and a tepid economy, the home-based business owners are taking it in their strides.
Ms Ong believes she is in “a sweet spot” at the moment given her niche product. “I think we are still manageable for now but since it is also easy for others to start an online business, I am aware that there might be more competition eventually.”
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Home baker Ms Chow said she would make use of lull periods to experiment with new menu items.
“I do see myself doing this for the medium term. One reason being that this is something that I enjoy and the world of desserts is still wide enough for me to keep pushing myself to learn and come up with new things,” she said.
Mrs Wee, who thinks it is unlikely for her to return to tourism anytime soon, said: “I am slightly worried about what's going to happen this year – whether or not I can retain customers, whether or not I can find new customers.
“These are always the questions at the back of my head but these were the same questions that actually held me back from starting in the first place. So, I think I will keep the faith and see where this takes me.”
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