Helen Twose 's Opinion

Personal finance and KiwiSaver columnist at the NZ Herald

Success: Baby business learning to run

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In 10 years the Babu brand has grown from one Auckland stockist to a 380-store deal in Europe

Ali Hui, owner of Babu a New Zealand designed range of babywear, based in Avondale, Auckland. Photo / Chris Gorman
Ali Hui, owner of Babu a New Zealand designed range of babywear, based in Avondale, Auckland. Photo / Chris Gorman

A colleague of Ali Hui's once told her the slowest dripping tap wears away the hardest rock. She says the proverb has become the business philosophy behind her babywear company, Babu.

Her tenacity on the exhausting journey to build the Babu brand has resulted in it growing from one Ponsonby Rd stockist 10 years ago, to her latest deal, supplying a 380-store chain in Lithuania, Latvia and Estonia.

Hui, 41, says she still gets excited about picking up one customer but to sign up a huge chain is "great".

"You just realise that actually your stuff is really nice."

The Babu business was created out of her search for good quality, stretch-knit sheets for her first child, Jack, in 2002.

Hui, a former national sales manager for a medical company, bought a roll of fabric, cut it out and had a machinist sew up the sheets before selling them to friends.

Figuring that if her friends were buying them there must be a wider market, she set up the brand and began door-knocking at stores along Ponsonby Rd.

Within two months she had a range of 10 products and at the end of the first year had 40 New Zealand customers.

Back then the big names of the local babywear industry - Nature Baby, Dimples, Merino Kids and Nurtured by Nature - were just starting out and sales were confined to high-end gift stores.

Hui says her plan then was to "potter around" supplying about 20 stores. "I think if I'd have known back then the journey it would take me on, I would probably have thought twice about it.

"In those early days it was just so hard, there was so much that I had to learn; so much that I didn't know that I didn't know and they were the challenges."

Looking back, she says a business course would have been helpful given that she had never run a business before, but instead she tapped everyone she knew for advice.

This includes the "incredible, amazing" Maori business network the Poutama Trust (her husband, Kingi, is Maori) which helped fund Hui's first trade show in Australia.

That trip netted 30 new clients, all of whom Hui still supplies today.

With an eye on European expansion Hui went on a trip to Britain that she describes as "hell". Having spotted a trade show in Birmingham, she travelled around the world with stock, promotional banners and her two kids, Jack, then 5, and Rubie, 2, while Kingi stayed home to oversee the house they were building at the time.

Despite the challenges of setting up flatpack Ikea furniture for the stand while Jack kept an eye on his little sister, Hui picked up her first British customer and got some leads into Europe.

"I just realised at that time that we have to get into bigger markets and just how small New Zealand was."

Her focus on quality and simple, classic styles works well overseas, as has the extensive use of merino fabrics.

Hui has concentrated her efforts on markets with colder climates, including the Netherlands, Belgium, Luxembourg and now Russia, China and Japan.

That has meant researching garments to suit extreme cold and local tastes using heavier merino.

Managing the manufacture of a range of products for a variety of markets across two different seasons concurrently is the hardest thing she does, says Hui.

The expertise she has built up in creating garment specifications, samples and managing manufacturing, which is now done offshore, has seen her form a business handling work for other fashion and bedding brands.

The maze of different clothing regulations and labelling standards in each country is now the domain of Kingi, who has also become a stay-at-home dad, allowing Hui to travel for business at a moment's notice.

Freight company Profreight has been invaluable in accessing markets such as Russia, she says, advising her on what needs to be done to land products in different countries.

It means that when Hui attends a trade show in Moscow at the end of this year she is prepared for questions about shipping rates, taxation and documentation.

Babu is now three times as big as it was five years ago, says Hui. "And I really want to be twice as big as that at the end of next year."

With a huge dip in Britain after the global financial crisis that "really kicked us in the pants" and a drop-off in its loyal Christchurch customers after the 2011 earthquakes, Hui says growth coming from the Russia, China and Japan markets is key.

It will provide the volume and funding to crack North America next year.

In the longer term, Hui says, selling all or part of the business is inevitable in order to bring not only investment but the expertise to reach the company's full potential.

Although it would be difficult to let go her "third child", Hui says, in five or six years' time she will be looking for a break and fresh opportunities.

"Growing a brand was a lot more difficult than I ever thought it was so I don't know whether I'd be up for the challenge of that again at all."

- NZ Herald

Helen Twose

Personal finance and KiwiSaver columnist at the NZ Herald

Helen Twose is a freelance business journalist who writes regularly about KiwiSaver and entrepreneurial companies. She has written for the Business Herald since 2006, covering the telecommunications sector, but has more recently focused on personal finance and profiling successful businesses.

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