First Appeared on 25th May 2023 on Daily Straits
By June Ramli
In an exclusive interview with DailyStraits.com, Tay Ching Teck, General Manager – Retail at Creative Lab, sheds light on the company’s remarkable achievements and continuous growth in Malaysia’s tile retail industry.
With the construction sector undergoing significant expansion and evolving consumer preferences, Creative Lab has adeptly adjusted its approach to cater to the changing needs of customers.
By offering a comprehensive and convenient one-stop solution, which includes complimentary interior design services and a strong focus on technology integration, Creative Lab sets itself apart from competitors in the market.
The company’s strategic retail presence, unwavering commitment to customer satisfaction, and unwavering dedication to sustainability position it favorably for sustained success in the dynamic ceramic tile industry.
Without further ado, let’s read the full interview with Tay below:
How has the growth of the construction industry in Malaysia impacted the ceramic tile market, and what opportunities does this present for Creative Lab?
In 2022, the Malaysian construction industry experienced significant year-on-year growth, reaching approximately 10 percent.
As a result, there has been an increased demand for tiles, primarily driven by new construction projects and the expanding use of tiles in home renovation and replacement works.
Now, customers possess a higher level of knowledge and actively seek product information, installation guidance, and even survey products on the internet.
Homeowners now rely less on contractors compared to the past.
Previously, when homeowners wanted to renovate their houses and select tiles, they often engaged a main contractor with samples for decision-making.
However, the dynamics have changed in recent times.
This shift presents an opportunity for Creative Lab.
Our services not only simplify the purchasing process for customers but also empower consumers to make informed decisions about their renovation projects.
What is Creative Lab’s approach to maintaining as the leader in the tile retail industry?
Currently, within the tiles industry, there is a notable division between residential projects in Malaysia.
It is estimated that approximately 70 per cent of the demand is driven by housing development projects sold to developers.
The remaining 30 percent to 40 percent caters primarily to residential renovations.
Creative Lab, in its present state, offers complimentary interior design services to customers.
These services, which typically incur significant costs in the market, are provided without any conditions. This unique offering allows us to differentiate ourselves from other tile retailers.
We aim to leverage technology to simplify and streamline the tile selection process for customers. One of our key services is the provision of free 3D design, using software that enables customers to visualize their desired designs from a 360-degree perspective.
When customers visit our showrooms, they can choose their tiles alongside their layout plans.
Our designers will then assist them in creating the desired design, typically taking less than 30 minutes to complete the rendering process.
This enables customers to visualize the renovated area and make informed decisions about the tile selection process.
If the chosen tiles are not satisfactory, customers can easily explore alternative options with just a few clicks.
As for showroom accessibility, we currently have 40 outlets strategically located throughout Malaysia. This extensive network ensures convenience for customers looking to renovate.
Moreover, two of our outlets are situated in shopping malls, namely Ikano Power Centre in Mutiara Damansara and Bangsar Shopping Complex.
These outlets operate from 10 am to 10 pm, providing working customers with the option to visit and select tiles after their work hours.
This eliminates the inconvenience of having to wait for weekends or dealing with the early closing times of traditional tile shops.
Furthermore, we offer site visits to customers’ homes, ensuring a hassle-free experience throughout the entire process.
Should any issues arise, our dedicated designers are readily available to assist. Additionally, we have our in-house tiling services and experienced crew specifically catering to customers in the Klang Valley area. We take pride in being a one-stop service provider, ensuring that customers not only purchase high-quality tiles but also benefit from skilled and reliable workmanship.
It is worth mentioning that all our tiles installers possess over 20 years of experience in the market, and we do not outsource our contracting work. This gives our customers peace of mind regarding the quality and professionalism of our tiling services.
What are the emerging trends and technologies that are reshaping the tile retail industry, and how is Creative Lab staying ahead of the curve?
In today’s landscape, customers expect a seamless and accelerated shopping experience.
They prioritize speed and the ability to visualise outcomes quickly.
In addition to our design services, we offer online consultations coupled with site visits to ensure precise solutions for customers.
Moreover, our Niro Granite website enables customers to select their desired tiles conveniently.
It is evident that the traditional approach to buying tiles is becoming outdated.
In the past, customers either sought recommendations to hire a contractor or relied on tile shops, primarily for product consultation.
Currently, we provide a comprehensive shopping experience from the moment customers step into our shop, even if they have limited knowledge about tiles.
On our display wall, tiles are showcased in a gradient from lightest to darkest shades, ranging from white to black, with variations in beige, grey, and brown tones in between.
This layout facilitates easy color selection for customers.
Our designers offer guidance on suitable applications, such as advising against slippery surface tiles for bathroom floors and recommending matte or structured surfaces instead. We then present samples to customers, allowing them to physically assess their choices.
Subsequently, we provide design services.
This entire process typically takes around an hour, during which customers can swiftly make decisions. This streamlined approach eliminates the need for customers to visit multiple stores, compare prices, and retrace their steps.
Our efficient process enables them to visualise the outcome of the designed tiles within a short timeframe.
Furthermore, our system promptly informs customers about the availability of stocked items.
This eliminates the need for them to spend unnecessary time going in and out of the store, as we can provide real-time information on our inventory.
How does Creative Lab plan to expand its retail presence in Malaysia in the coming years?
Presently, we have a network of 40 outlets spread across Malaysia, with a significant concentration in the central region which is Klang Valley.
While the majority of our showrooms are located there, we have one outlet in Sabah and a newly revamped one in Kuching, Sarawak.
We are actively considering expanding our presence in East Malaysia due to the booming property development in that region, presenting a lucrative opportunity for our business.
Furthermore, our retail formats vary, encompassing outlets in shopping complexes, shop lots, and even a flagship showroom housed in a bungalow unit.
Currently, we are conducting studies to assess the feasibility and potential of establishing additional outlets within shopping malls.
This strategic consideration stems from our observations of evolving customer shopping behaviors. As we all know, Malaysians have a penchant for shopping, and it is particularly evident during crowded weekends at shopping malls.
Drawing from our own experiences, we have witnessed growing year-on-year sales in our shopping mall outlets.
Therefore, we see great potential in expanding our presence in such locations.
Additionally, we are exploring opportunities in both the northern and southern regions of Malaysia too.
How does Creative Lab differentiate itself from its competitors in the tile retail space?
We offer a convenient one-stop solution for customers through a holistic process, from assisting customers in the selection of suitable tiles to providing the tiles themselves, as well as offering the expertise of our skilled tiling crew for installation.
This streamlined approach sets us apart from other retailers in Malaysia, as we not only provide product consultation but also extend our offerings to include interior design consultation—a service that is often lacking in the industry.
To further enhance the customer experience, we have leveraged technology to simplify the entire process. Recently, we introduced our augmented reality (AR) app, which is available on both iOS and Android platforms.
This innovative app enables customers to visualise designs in a three-dimensional format easily.
When customers visit our shop, we can either provide them with a printed 2D design or allow them to download the app by scanning a QR code.
Through the app, customers can create and explore their entire design in 3D—an advanced capability that sets us apart from many other retailers who have yet to embrace such technology.
What are the biggest challenges facing the tile retail industry today, and how is Creative Lab addressing them?
Currently, we are witnessing a shift in customer shopping habits, particularly among the younger demographic. It is crucial for us to adapt and meet their evolving expectations.
Nowadays, customers tend to conduct thorough online research before making a purchase for their homes.
They are well-informed about product details and upcoming promotions even before stepping foot into a physical store.
This poses a challenge for us, as we must ensure that our staff and resources are constantly updated to meet these informed customers’ needs.
Tiles are not considered commodity products, as they are viewed as long-term investments.
Customers do not frequently purchase tiles; hence, conveying accurate and comprehensive product information becomes vital. It can be challenging to educate customers effectively due to their limited tile-buying experiences.
Many customers, upon entering our shop, compare prices and materials extensively.
Ceramic tiles, porcelain tiles, and various tile types for different applications and functions are factors they consider.
At Creative Lab, we prioritize equipping our designers with the knowledge and expertise to address and answer these questions. Therefore, we emphasize not only sales training but also technical training to ensure our staff can provide the right guidance to customers.
Moreover, customers increasingly seek hassle-free shopping experiences.
Based on our research, it has become evident that having an omnichannel presence is crucial.
To cater to these needs, we have invested in technology such as AR apps and 3D visualization, which simplify and enhance the overall customer journey. These tools enable us to provide a seamless and convenient experience, aligning with the expectations of modern customers.
Looking forward, what do you see as the future outlook for the Malaysian ceramic tile industry, and how is Creative Lab positioning itself for continued growth and success?
I anticipate continuous growth in the replacement and renovation market, indicating a promising trend. Even for new project developments, developers are increasingly opting for quality tiles, as well as homeowners often require renovations with an application of high-quality tiles upon receiving their keys. To address this market segment, we have a dedicated project team in place.
However, we have also observed a rising interest in DIY activities, particularly after the pandemic. It has become a popular trend.
While homeowners may engage in DIY projects, we have noticed that flooring installation is still predominantly carried out by professionals due to the required knowledge and experience.
Nevertheless, through our design services, customers can actively participate in the layout and design process.
This is an aspect that sets us apart from traditional shops.
With the aid of technology, we assist customers in creating their designs and integrating their ideas into the overall process.
This level of involvement can be considered a form of DIY design, which aligns with the current trends. Additionally, our commitment to providing free design services not only saves time for consumers but also positions us favorably in the market.
Furthermore, sustainability has emerged as a significant concern for many companies and customers. Recognizing this, Niro Ceramic Group has taken proactive measures by obtaining the Environmental Product Declaration (EPD) certification for both our company and our products.
This certification underscores our commitment to sustainability and positions us well for future growth. We remain dedicated to product innovation and providing excellent customer service, ensuring that we meet the evolving needs and expectations of our customers.
What is your view of the outlook in the construction industry?
During the first quarter of this year, we have noticed a limited number of mega projects being awarded. As a result, we are closely monitoring the situation. It is important to note that there are still several pending and ongoing projects that have been affected by the pandemic. These projects are still progressing despite the challenges.
Currently, the overall outlook remains positive. The projects we are currently involved in were secured around years ago, and any potential impact from the current situation may be observed in the coming months, possibly within the next four months. However, it is difficult to predict the exact outcomes as the situation continues to evolve. We are closely monitoring the developments and adapting accordingly to ensure the best possible outcomes for our projects.
What about the increasing interest rate? Do you think it is impacting the industry?
The increasing interest rates and overall rising costs have indeed posed challenges for us. However, we are committed to not transferring these costs directly to our customers. Instead, we are proactively exploring alternative sourcing options from different countries. By diversifying our procurement channels, we can compare prices and make informed decisions that help us maintain competitive pricing for our contractors and clients. It is worth noting that steel prices, in particular, have experienced significant increases over the past few quarters, but we are actively managing this situation to mitigate its impact on our operations.
Does the economic slowdown forecast worry you?
Not necessarily as there are still ample opportunities in the replacement and renovation sector. While there are not many customers who are retiling their entire homes, we see many who are opting to upgrade specific areas of their homes, such as changing bathroom tiles, which can provide a refreshing and rejuvenating experience. While the scope of these projects may be smaller, the frequency of such activities remains significant. Even though people may not be purchasing entirely new houses, the act of changing tiles can have a transformative effect and make them feel as if they have a brand-new home.
Can you elaborate on your target market?
Currently, the majority of our customers, over 80 percent, are homeowners (B2C), while the remaining portion, approximately 20 percent, consists of contractors and interior designers (B2B). This disparity can be attributed to our comprehensive interior design services, which include offerings that are typically charged for by independent interior designers. As a result, we indirectly receive compensation for these services. Additionally, we have recently ventured into providing our in-house tiling services, potentially leading to competition with some contractors. However, we aim to identify opportunities for collaboration with these customers, as many interior designers are pleased to work with us due to the services we provide.