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How this Malaysian company made MYR 500 million selling goods to gamers

Written by Vulcan Post Published on   4 mins read

SEA Gamer Mall distributes virtual goods such as digital prepaid codes and gift cards that gamers can redeem to get in-game currency or items.

Looking at SEA Gamer Mall now, it’s hard to believe it began in a small bedroom. An engineering graduate and avid gamer, Wong Ong Hua began SEA Gamer Mall in 2008, after being introduced to the in-game virtual goods secondary market by an online friend from China.

When co-founder Tommy Chieng applied for a job there in 2010, Wong was still running the startup from his home, with 12-13 staff helping him out.

“Mr. Wong wanted to hire someone to manage in-game virtual goods inventory,” Tommy recalled. “I remember that during the interview, after the formality of getting to know my background and experience, Mr Wong asked if I played any games. I said ‘no’ and told Mr Wong that his website sucks.”

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A move like that might get you booted from the office, but Tommy had his backup. He’d done research on the company’s online presence, as well as the structure of SEA Gamer Mall’s website.

Using what he knew, he told Wong about the shortcomings of the website and how it could be improved.  Impressed, Wong hired Tommy as a supervisor instead.

From room to “mall”

About half a year later, Wong and Tommy had a talk about growing the company.

“During the conversation, he told me about how he wanted to share the company with his staff, including me,” Tommy remembered. “I was shocked and surprised because I was very new in the company.”

Wong also had a new proposal: for Tommy to work alongside him in growing the company. Accepting the challenge, Tommy worked 12 to 14 hours a day to improve.

Finally, in 2012, the two co-founders officially established SEA Gamer Mall, after a buy-in from an external investor.

Photo courtesy of SEA Gamer Mall via Vulcan Post.

SEA Gamer Mall is a company that distributes global goods and services for gamers, game developers, and publishers. The things they sell mainly revolve around digital prepaid codes and gift cards that gamers can redeem to get in-game currency or items.

There’s a huge market for these types of goods in Malaysia and even overseas, and SEA Gamer Mall’s customer base is proof of that.

“We have more than 2.4 million users and the majority of them are from Malaysia,” Tommy revealed. “In terms of the largest region, we have more than 1.2 million users in the SEA region.”

Other countries include China, Thailand, India, and Indonesia.

Despite having such a huge customer base, SEA Gamer Mall’s headquarters have steadfastly remained in Sitiawan, Perak. According to Tommy, this was because Wong dislikes the city life, and therefore has elected to stay in his hometown.

Benefitting from the pandemic

The COVID-19 pandemic has brought many businesses to its knees, but SEA Gamer Mall has safely evaded its clutches. In fact, their business has gotten better during the pandemic.

“We’ve definitely benefited from COVID-19 due to the lockdown in most countries,” Tommy said. “More people are playing games for longer periods of time, and that translates into more spending by gamers.”

With the pandemic accelerating their revenue, they’ve already achieved 65% of their projected revenue of MYR 500 million for 2020.

“Based on the current run rate, it’s on track to hit and break above that figure,” Tommy added.

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He predicts that they would achieve the revenue amount by September or October 2020. In 2019, they netted MYR 386 million in total revenue.

“Although we are a well known brand among gamers, there are still a lot more of them we could reach out and convert them into paying customers,” Tommy said. “In Malaysia alone there are more than 20 million gamers. We want to capture a bigger market share in Malaysia and grow other markets along, especially SEA region.”

They’ve partnered with Touch ‘n Go eWallet, Boost, GrabPay, and PayPal to run campaigns, and have also sponsored prominent gaming influencers and e-sports teams to expose SEA Gamer Mall to the gaming communities.

Change from the inside

SEA Gamer Mall has had its fair share of problems, especially in the beginning phase. These problems included high staff turnover, malicious attacks on their site by third parties, and payment fraud, which is a pretty serious problem.

“A fraudulent transaction is a double whammy loss—loss of payment to charge back as well as the delivered goods,” Tommy stated.

They used to have an average fraud rate of 4-6% in the past, but since automating and improving their fraud management capability, it’s dropped to an average of 0.5%.

To overcome the high turnover rate, they focused on restructuring the organisation and its working hours, and implementing better staff benefits.

The latter includes paid-for gym and swimming pool memberships as well as badminton court bookings. So far, these have worked out well.

In order to achieve their 5-year vision, Tommy shared that they’re identifying more talents to grow their organizational capabilities, and are making investments in the local startup ecosystem too.

“We have allocated some funds to invest in startups in the payments, gaming, and entertainment related platforms and e-sports organizations.”

“If successfully executed, I believe the investment would help further diversify and grow our business,” he concluded.

This article was first published by Vulcan Post.


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