Maxxi Online Building Materials Maxxi, Thailand’s first online hardware store, has been established by Eric Johansson in Hua Hin. He wants to be the first choice for the buyers of building materials in Thailand.
It is almost impossible to buy online from any website of Thai manufacturers of building materials.
By Steen Poulin Nielsen
ric Johansson was a carpenter and concrete specialist when he arrived Thailand 19 years ago. He had been working in Australia and was on his way back home, but he decided to stay. “I could see so many opportunities here that I just had to stay,” Eric Johansson says. “I started renovating people’s homes while they were in Scandinavia. When they came back, everything was shining, and the business grew quickly.” Today, 19 years later, Eric has about 300 employees in total.
Difficult to source products Moving into selling hardware and construction materials was triggered by the great difficulties he sometimes had finding basic material for his own business. “When we did find the products we often bought more than we needed and sold to other construction companies – suddenly we were a small scale building material reseller,” says Eric. The business idea shaped up, when he three years ago found Björn Nylén who already had experience doing business in Thailand. Nylen joined Maxxi as the General Manager. Another partner in the team is Niclas Torsell who is based in bangkok. Niclas Torsell has lived in Thailand for 18 years and speaks Thai so he is account executive in charge of with key suppliers of the business. Going for the online business
meant a lot of website development work, which was outsourced to India and Pakistan. With the website online, Johansson, Nylén and Torsell have been meeting some of the big guys in the industry and telling them about how they can be part of what they want to do over the next two years.
Partnership under the umbrella Maxxi is to be regarded as an umbrella where different suppliers of building material can be a partner. Maxxi will sort out the deal and do a contract with each supplier and one of the major points is a price guarantee. Maxxi has to have the lowest prices on the market. The first project for Maxxi was a huge project with several hundreds of houses. Maxxi is selling materials and other companies are doing the work. “It is much easier to sell the cement and make a few baht per bag than to make sure that the cement is being put on the wall”, says Eric Johansson who also tells that Maxxi was an immediate success, he tells: “The first two month we have sold more than expected. Because our prices is so low. A costumer can save a double digit percentage on a septic tank buying from us. Price is very important.” Most important is that Maxxi wants to be a partner instead of a supplier. According to Björn Nylén it is not uncommon in Thailand, that the supplier will make as much money on a short term basis.
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If you are going to build your own house and do not know how big your septic tank should be you will ask the builder. Often he will sell you the most expensive one, much bigger than needed. You are expecting him to be he expert and to give you advises. But he is only looking to take as much money as possible.
Long term business Maxxi wants to take care of the costumer, to give the best advises and to look for continued business. Long term business relations to both suppliers and customers.
Another important factor in Thailand is commission. “It is not uncommon that staff makes money when dealing on behalf of the company. 99% of the purchasing staff in Thailand ask for commission. This practise means that products are getting too expensive. We cut out all kinds of commission”, Johansson says. Maxxi can do the full service for any builder in Thailand. Their architects can do the drawings, the planning, the workshop the kitchen and the windows. And the construction company can build the house. The builder can partner up with Maxxi
and have full service and he will not have to spend time talking to many people or taking care of numerous invoices. “If you look into the market today the majority of managers in the building industry are aged 50+. They were running successful businesses before the Internet was widely available here and not aware of the importance of online information. But the new generation of business people know and appreciate what we are doing”, says Johansson. “The market is hungry for information. Today it is very hard even to get a copy of a brochure.” “Here at Maxxi we know more about the product than many of the staff at the suppliers. If you go into HomePro you will find that knowledge of product is rarely available,” says Johansson.
Maxxi Team The company has already teamed up with 56 suppliers. They represent the major brands in the business and the buyers knows them well. “If you go to their websites to buy products, you will find that it is almost impossible. We at Maxxi want to be visible on all our partners websites as the online sales channel for their products so the costumer can start the buying process right there. We wants to be at the top of the page,” says Björn Nylén. The two Swedes have no doubt that Maxxi will turn into a big and successful business. They intend to move fast, expand the numbers of
partners and are sure that they have both the capacity and the knowledge both to grow the business and to add value to the market.
BuildTech´11 At the BuildTech´11 Building Technology Exposition in May, the main event in ASEAN of its kind, Maxxi had a 225 sqm booth where they had invited their partners to join them. Each supplier were given a 5 sqm space to show their products. At the centre of the booth were two Maxxi staff sitting at the computers showing the audience how easily they can order from the website. “We now have 10.000 business cards in our system and are contact them”, says the Eric Johansson.
Own two resorts The challenge to find products in the right quality at the right time and price did not move Eric Johansson into the online business right away. At first he established a workshop doing wall panels, doors, windows, wardrobes, kitchens and even furniture. And with about 300 staff he felt the need to capitalize days without work for all of them. “We have two resorts, Pineapple Resort and Garden Hill´s Resort. When you have 300 staff you do not always have work for all of them, sometimes you only got work for 260 persons and instead of letting 40 persons do nothing we found it a good idea to build for ourselves”, he says. May 2011 • ScandAsia.Thailand 33