Entrepreneur.com.ph

As if single-handedly starting a company fresh out of college weren't difficult enough, Brian Dy, at 22, had simultaneously ventured into two different lines of business: handicrafts and garments. "It was actually my Dad's idea for me to go into both," he explains. "As to garments, it was something I had already been into since I was young. My family's into manufacturing, so I'd often be in my Dad's office asking the artists to create shirts for me. I'd just think of a design—usually around the concept of basketball—and I would have them do it on a shirt."

But while he was on a trip to Bohol in 2002, it was handicrafts that Dy first thought of going into. "While looking through the souvenirs being sold there, I felt there was room for improvement," he recalls. "Despite their high price tags, a lot of the items weren't too nice. I therefore thought of creating a brand of high-quality souvenirs with good designs but that weren't too expensive."

The following year, after graduating from the University of Asia and the Pacific, Dy's parents gave him the choice of either working abroad or going into the family business. He recalls: "Since my parents are in the business of manufacturing baby clothing, I asked if I could branch out into another apparel line. They said yes, but on the condition that I also get into handicrafts as another business for the family."

Dy agreed to that condition and, in September 2003, established Fusion Crafts International, Inc., an umbrella company for a souvenir apparel line under the My Philippines brand and a home décor collection line under the Fusion Crafts brand. He took a P300,000 loan from his parents for capital, using about 80 percent of it for My Philippines, specifically for product development, for putting up an office in his family's factory, and for hiring an artist. He used the remainder for initial product development work for Fusion Crafts.

"It was very difficult handling both operations at the same time," he says. "Doing the My Philippines part was okay, though, since it was my own idea to produce a souvenir brand. In the souvenir business, however, I saw that the main risk was going up against already established and popular souvenir brands. At any rate, my parents, being already suppliers of Shoemart Department Store, helped me get an appointment to present my products during the store's monthly product samplings."

Dy immediately went to work and was able to come up with over a dozen designs for the product samplings, which took place in September 2003. He made no sales that month, but kept on producing more shirts until he got his first order from SM two months later. SM accepted a total of eight of his designs—mainly those around the Cebu, Manila, and Philippines themes—and ordered a few thousand pieces of each. The shirts retailed for P199 to P379 apiece.

An order can be as much as P500,000 or even higher, which was enough for Dy to earn back his initial investment. His made his first delivery to SM by mid-December of that year, and after that My Philippines became SM's steady supplier.

In contrast, being an altogether new line of work for Dy, Fusion Crafts proved to be a much more difficult undertaking. He recalls having had to take numerous trips to Bulacan, Laguna, and Quezon to do research on natural materials for use in handicraft manufacture. Eventually, he was able to get several subcontractors to produce his initial handicraft lines. The subcontractors employed an average of 30 workers, and Dy himself had to hire 10 in-house employees for Fusion Crafts.

Dy recalls: "The home decor line combined various materials like abaca, capiz, and wood into each piece, so we had to get different subcontractors for every shipment. For the wood items, for instance, I had two subcontractors in Bulacan and Laguna to produce them, and then had another subcontractor in Payatas, Quezon City, to do the Capiz accents. In doing business, I made it a point to give a good price for the subcontracted work, and I treated my employees and suppliers well. I did so because I knew that they also had to meet their own needs, and that it was my responsibility to take care of them. In business, loyalty goes a long way."

Initially, Fusion Crafts produced small home décor like baskets and candleholders, and Dy started supplying SM with them in January 2004. The first order of about 70 pieces retailed from P99 to P300 each.

But as Dy worked to improve the quality of his products, their price became too high for the department store market. After three months, therefore, SM asked Fusion Crafts to be a consignor instead, offering it a section of its own in SM's Kultura stores at SM Megamall and SM Makati. "We did well at the Kultura stores during the first six months, with the bowls and candleholders as our bestsellers," says Dy. "But then sales began to decline, prompting us to venture into exports as another market for our handicrafts."

Fusion Crafts started shipping its products to England, Hong Kong, Russia, Spain, Switzerland, and the United States, as the export demand for them proved to be better. The major problem, however, was in production. Although foreign buyers were interested in purchasing handmade items, they wanted them to look manufactured—smooth and without many imperfections. This was to prove very difficult and time-consuming for Fusion Crafts.

Says Dy of the experience: "The business broke even in 2005, but given that I was always at the factory checking on the products and shipments. I therefore rarely had time to do anything else, and it came to a point where my health started to deteriorate. I also realized that although about 80 percent of my time was going into Fusion Crafts, most of my profits were coming from My Philippines."

So, in 2006, Dy decided to give Fusion Crafts one last big try. He commissioned Carlo Tanseco, one of the country's most respected designers, to help create new handicraft pieces for him. He then spent about P200,000 to join both CITEM's Manila FAME exhibition in the Philippines and the Hong Kong Houseware Fair abroad. "The two show dates overlapped, so it was very hectic for me," he recalls. "At least I had employees to help set up for the FAME show in Manila, but in Hong Kong, I had to carry and fix everything myself—pieces that were several feel high. That was an exhausting trip for me.

Fusion Crafts got some orders as a result of its participation in the two exhibitions, but after closing the books on the last shipment, the company found that it earned a net income of only P100,000 for the year. It was then that Dy decided in December 2006 to end his export venture for good. "Fusion Crafts incurred huge losses—probably in the millions," he says. "Bottom line: the products were very difficult to produce and it wasn't such a profitable business."

Giving up Fusion Crafts enabled Dy to focus on his initial garment concept. He admits that having had to attend to the Fusion Crafts business at the same time, he had not paid enough attention to his shirt line and their designs began to deteriorate. "This time, I decided to convert my supply arrangements for My Philippines to a consignor agreement with SM," he says. "I was hesitant to do this at first because it was something new to me—it put me out of my comfort zone. It meant that I would have to provide my own sales ladies, take care of my own inventory, carry the risk of losses for non-moving items, and compete with other consignors. But in the end I decided to do it."

To produce the much bigger volumes required by his consignor arrangement with SM for My Philippines, Dy purchased a 700 sq m factory that could house a cutting area, a printing area, a sampling department, and a stockroom, then hired a total 10 regular employees for the company.

Dy then assiduously worked to maintain the high quality of the My Philippines product lines, improve their designs, and repackage the brand to give it a new look. In March of this year, he took the major marketing initiative of signing on boxing champion Manny Pacquiao's wife, Jinkee, and the couple's children as image models for My Philippines.

"Being relatively new in this industry, I was looking for something that would help further the My Philippines brand as 'Our Country's National Shirt'," Dy explains. "The Pacquiao family was perfect because they represent the country and the Pacquiao name is at the same time very well known abroad," he says. "Our expansion and this marketing initiative brought out our best, and sales have never been better. We are now selling several thousand pieces of My Philippines shirts per month, with sales peaking from last December to April this year."

Today, My Philippines now carries men's, women's, and children's sizes for its shirts as well as caps, shorts, towels, and other apparel items. From a purely tourist market, it now targets a market mix of 40 percent foreigners and tourists, 40 percent balikbayans, and 20 percent locals. And My Philippines products are now carried by all SM Supermalls nationwide.

"Along this line, we will further develop our product selection and also open retail boutiques and franchises in the country's key tourist destinations," says Dy. "My goal is to create a positive image for the Philippines through our products. I also believe that everything I have achieved this far is a blessing from God, and that we are just his instruments. Everything comes according to His timing."


CONTACT DETAILS:

FUSION CRAFTS INTERNATIONAL, INC.
10 Col. Martilino St.
Heroes Hills, Quezon City
Telephone: (02) 411-3686
Fax: (02) 371-3549
E-mail: fusion_crafts@yahoo.com
Website: www.mynationalshirt.com