Operating A Enterprise Promoting Controversial Merchandise In Malaysia

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Becoming a founder is not something your Malaysian parents would disapprove of, but you could end up in a company selling a controversial product.

For Jeremy, despite his family’s opinion, he was determined to run a subscription vape business.

“After I decided to start the Vape Club, I told them. And everyone thought I was crazy, ”Jeremy shared in an interview with Vulcan Post.

In addition, his family and friends would probably have bet that his company would fail from the start.

Want a conventional career path for her son

Like any other Asian Tiger parent, Jeremy’s are no different. He came from a middle-class Chinese family, and of course they wanted their son to pursue a conventional career path.

He was expected to study hard, get a scholarship, go to university, get a good job, and retire at 60.

But Jeremy had always felt that this path wasn’t right for him as he couldn’t imagine doing it for the next 30 to 40 years until retirement.

When he started the Vape Club, he only worked for two to three years and received comments that he hadn’t been able to start a business because he lacked the experience.

“Fortunately, I’m pretty thick-faced. So I didn’t really take what they said seriously and just kept doing what I had to do, ”he shared.

Controversy is a perception

“If society decides to consider this business controversial, I cannot stop them. But in my eyes it’s perfectly fine, ”said Jeremy, explaining his attitude towards his business.

A common comment he would get from people about the Vape Club was the health aspect. People wondered why Jeremy wanted to encourage Malaysians to adopt a “negative” habit like vaping.

However, Jeremy sees his business in helping those who are avid smokers slowly find a way to break out of the habit, much like he has personally done.

“I was a cigarette smoker at the time. And when I took an X-ray, I found my lungs were pitch black at the time, ”he said.

After switching to vaping, he later took another X-ray and learned that his lungs had become healthier.

“If you’re not a smoker, you shouldn’t vape. But if you are a smoker, to do less harm to your body, I don’t think there is a problem with that, ”explained Jeremy.

Some Vape Club Products / Image Credit: Vape Club

Be comfortable with uncertainty

Since there were many gray areas in such a deal, Jeremy shared that many investors weren’t interested, which made it harder for them to accelerate their growth.

“When I say ‘gray area’, there weren’t any laws regulating vaping until 2018 when Europe started introducing taxes, regulations, packaging requirements, etc.,” said Jeremy.

“In Malaysia the laws are very specific. If you sell nicotine, it is a crime. In reality, however, there is no legislative enforcement. There are still tons of vape shops in Malaysia and they definitely sell products that contain nicotine, ”he added.

Due to a lack of investor trust, Jeremy and his team had to boot anything with less than RM 10,000 in initial capital and reinvest their profits over time.

However, during Black Friday in 2017, they managed to generate RM500,000 in sales in one month, which Jeremy saw as a major milestone for the Bootstrap company.

“When you’re in a controversial environment, you need to know a lot more about uncertainty than about any other company,” advised Jeremy.

For example, before starting Vape Club, he wasn’t aware of the advertising policies on Facebook. After building the website and more, Facebook suspended his ad account for promoting vape products.

In addition, PayPal has closed the payment gateway and thus excluded it from a payment method that is popular around the world.

Stay one step ahead

Despite the uncertainty of the regulations for controversial companies, Jeremy stated that it is an industry that cannot simply be closed. More people have already made such businesses for a living, as demonstrated by the many vape shops in Malaysia.

However, it stipulates that the government will only introduce excise duties on cigarettes in order to open up another source of income, tighten packaging regulations, for example requiring manufacturers to put up images and slogans against smoking, and manufacturers to obtain licenses.

“What can I do when as an entrepreneur? [we’re] I will try to diversify my revenue streams and develop other businesses ahead of time as there is a risk of new regulatory implementations, ”said Jeremy.

Interestingly, there aren’t a lot of red ribbons disrupting his business. Currently, the only tax levied on its products is SST.

With 99% of Vape Club’s customers also from outside Malaysia, this would most likely cushion its impact should any legal changes impact the industry.

“We actually got a lot of legal letters, not for legal reasons, but because a lot of Malaysian vape brewers are copycat brands. As if they were creating a variant of Milo, they would do the exact font and branding, but just change the name to ‘Meelo’, ”said Jeremy.

As a result, over the years they have received legal letters from Kinder, Red Bull, Pepsi, Haagen-Dazs, etc. asking them to stop manufacturing these products.

But Jeremy usually forwards these to the manufacturers as Vape Club is only a reseller and takes no liability for it. So far they have avoided other problems.

For those looking to start a controversial business

For beginners thinking of starting a controversial business but not getting the support of their friends and family, Jeremy had simple advice:

“Do you want to be more successful or do you want to worry about what other people think? Just don’t get into trouble, don’t do anything illegal. “

He also believes that having more confidence in your own business is important because if you don’t, it can reflect your performance.

Even so, it is no longer as handy in the vape club as the vape industry is no longer as lucrative as it was in 2017-2018.

Jeremy used his experience from the Vape Club to build a new startup called Hustlr, an educational platform that helps entrepreneurs thrive digitally.

  • You can find out more about the Vape Club and Hustlr here.
  • You can read about other startups we’ve covered here.
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