Saturday August 4, 2012
Greeting card businesses see growing demand for handmade items
By JOY LEE
BEGINNING in the mid-1800s, greeting cards were traditionally exchanged during festive periods, but today, you can say almost anything with a card.
For example, in the US and UK where the greeting card market is mature and bursting at the seams, you can find cards that say “Don’t think of it as losing your job, think of it as a time-out between stupid bosses”.
Hallmark and American Greetings are the largest greeting card producers in the world, controlling an estimated 82% of the US market which is worth US$7.5bil (RM23.35bil)
The UK is considered one of the largest markets for cards and the Greeting Card Association estimated that nearly £1.4bil (RM6.81bil) was spent on cards last year; more than tea and coffee put together.
While the local greeting card market may not be big enough to warrant the establishment of a trade association, local card makers are optimistic that positive consumer trends in Malaysia will ensure plenty of room for growth.
“Business here will still grow. There are not that many players yet and the market is not brimming like in the UK where it is very competitive,” said AEIOU Studio Sdn Bhd senior designer Wong Lin Lin.
AEIOU is one of Malaysia’s bigger gift and card companies. The company was started some 20 years ago by its managing director Edward Low after a trip to London.
“Handmade cards were already popular there then and Low loved them so much that he decided to venture into this,” Wong said.
Low, who had a gift store at that time, went about purchasing materials for greeting cards from different countries and sold them in his shop. The venture proved to be successful as his business flourished and grew from a retail store to a full-fledged gift and card manufacturer.
AEIOU eventually moved into wrapping paper (currently its core business), gift boxes and other gift-related products.
Made by hand
Wong oversees AEIOU’s handmade-cards division, which is a growing business for the company.
While the bulk of AEIOU’s cards are mass printed cards, Wong said AEIOU is moving more aggressively into the handmade segment as this is where the growth opportunity is.
She added that competition in the printed-cards segment is getting stiff thanks to mass production in China.
Also, producers can’t pass on the rising cost of paper to consumers for printed cards as prices of cards have generally remained low in the past 10 years.
AEIOU will slowly phase out its mass-printed cards that focuses more on corporate demand.
The company owns a printing plant in Kepong which houses its RM2mil printing press.
In contrast, Wong said consumers are willing to pay a premium for handmade cards, which means better margins for card makers.
“Moof” and “You’re Invited” wedding invitations are spin-off brands from the success of AEIOU’s handmade cards.
“Although we now have e-cards and other electronic forms of sending greetings, people still generally like to show that they care by getting actual cards.
“It is a show of sincerity. So, cards can’t really be replaced,” Wong said.
According to a Global Industry Analysts Inc report, the global greeting cards market may reach US$30.4bil by 2015.
Greeting cards make up about 10% of AEIOU’s business, turning in a revenue of about RM950,000 last year. Wong said the cards division enjoys modest annual growth of about 5%.
Wong travels to China at least once a year to source materials for their handmade cards.
“It is a challenge trying to get good materials at a good price. We need to make sure that our cards are affordable and so we need to control our cost but we don’t want to compromise on our quality as well,” she said.
AEIOU spends about RM40,000 a year on materials for handmade cards.
Although handmade cards are all the craze now, Wong noted that it is not easy to produce handmade cards in a big way as each card requires more detailed attention than a printed card.
“It is time consuming and we have to make sure that the finishing for every card is the same,” she said.
The production of most of its handmade cards is carried out by home-based freelancers. AEIOU has six fulltime designers.
Bringing them home
The popularity of handmade cards has sparked many home-based businesses where craft hobbyists make and sell their cards online.
Yuen Sia and Belle Wong have been close friends since their school days.
Both grew up with an interest and a knack for handmade handicrafts and spent much time making their own cards, photo frames and jewellery.
“We started our business after both of us got married. And of course, we made our own wedding invitation cards.
“We have always had a passion for handmade things and I thought, let’s do something about it,” Sia said.
Sia and Belle started a blog to promote their handmade cards and PaperThrill Cards was in full swing by mid-2009.
They started out with a collection of single cards for birthday and festive occasions, but featured some wedding cards as well. Soon, the orders started coming in and their wedding invitation card designs proved to be a hit.
These days, they are focused on fulfilling orders for handmade wedding invitations.
According to Belle, 50% of their orders come from local clients while the other half are from overseas. PaperThrill Cards receives orders from as far as the US.
The biggest investment for Sia and Belle to get PaperThrill Cards going was to purchase a good printer.
“Then we had to seek out paper vendors, ribbon vendors, stationery and all the other smaller items that we use for the cards,” Sia said. Most of their materials are sourced locally.
“There was no fixed initial investment for us because everything is very much home-based. So the expenses come along the way,” Belle added.
Sia and Belle also did not need to spend any money on advertising, which may come as a relief for other aspiring card makers.
“Initially, it was quite a challenge creating an online presence. We mainly post up notices on wedding sites and leave links to our site. So that has helped us spread the word for our business,” Belle said.
The prices of cards available at PaperThrill Cards start from RM5 onwards and vary depending on the customisation required for a design.
“The business is growing. Initially, we got about an order every few months, but now we get a few orders each month,” Sia said.
She noted that it is a challenge to keep up with the orders at times as both of them have day jobs.
Sia said their week nights and weekends are more or less spent making cards. They say have yet to reach a stage where card making feels like a chore.
The most memorable and most expensive card made by Sia was a RM40 Manchester United birthday card.
Other challenges faced by the duo include sourcing suitable and affordable materials as customers are sometimes unwilling to pay high prices despite demanding elaborate designs.
For the most part, they believe that consumers are still big fans of unique handmade goods.
“The trend is relatively new in Malaysia and there is still room to grow the handmade-cards segment, particularly among the younger group. And brides now want something unique for their weddings,” Sia said.
Both Sia and Belle hope the success of their online business will translate to a physical shop someday where they can work on their passion for handmade stuff on a fulltime basis.