While shopping at grocery stores, have you ever come across an area selling discounted food that’s near their expiration dates?
Well, there’s a shop that dedicated to selling near-expiry products in Damansara Uptown. It mainly carries food products sourced around the world, typically within three to six months of expiry.
Aptly named Near To, the business was founded by Nicholas Tan in 2022.
After completing his Bachelor’s degree in advertising at the University of Arts London, Nicholas co-founded a media production company with some friends, but that ended during the pandemic.
From there, Nicholas pivoted to the ecommerce industry, working on a business called Localli Store that focused on selling imported boutique products from overseas.
It was during this time that he experienced the high risk of food products’ expirations.
Nicholas began researching business models around the world that tackled the issue of near-to-expiry (NTE) products, and found that discount store models were doing well in many countries.
He looked to case studies such as Value$ from SG, Hot Max from China, Green Price from Hong Kong, and even Don Quijote from Japan.
“Most of the businesses that I have mentioned focus on expanding their business on the retail side,” Nicholas pointed out. “The main reason is that discount or NTE products are highly impulsive items because of the price, so a physical environment is best to engage the customers to shop.”
Thus, he came up with the idea of Near To, a physical store that people can visit to buy discounted NTE items.
“Personally, starting any business is easy nowadays,” Nicholas admitted. “But [since we deal] with NTE products, I know that my company is creating a positive impact in our neighbourhood, and hopefully soon the whole Malaysia.”
Sourcing the products
Near To gets its NTE products from a range of suppliers, including local manufacturers, importers, and even supermarkets.
“We consider ourselves as a solution provider for the current FMCG system,” Nicholas shared.
Near To makes for a more convenient solution compared to bigger supermarket chains, which typically have all sorts of rules a supplier has to follow.
Starting out, Nicholas said he had to ask suppliers for special deals due to their small purchase volumes. But as the business grew, they now have suppliers that walk in to their store or reach out online to discuss how they can work together to solve their product problems.
Setting up the supply chain has been one of Near To’s biggest challenges, Nicholas said. And now with nearly 40 local suppliers onboarded, there’s also the challenge of demand.
“Since we have a strong supply now, we have to create enough demand to consume all these products,” he explained.
To do so, the founder is looking to expand to more locations for more exposure.
What happens when a nearly expired product actually expires, though? Nicholas shared that in this case, they can either return them to the supplier in exchange for a new batch, or dispose them themselves.
To create a less wasteful ecosystem overall, Near To also aims to collaborate with Entomal, a biotech company that tackles food waste by using black soldier flies to treat the waste.
Addressing the skeptics
It seems like a business like Near To may find it hard to attract customers, as people might find it off-putting to buy nearly expired products.
But Nicholas said that a good bargain would always attract crowds. As such, it didn’t take long before locals started to know Near To.
As for how they price their products, it’s based on the discount value from the supplier. Suppliers can either opt to sell at cost price to get some money back, or sell it at a cheaper price and take a loss to get rid of the stock.
While customers in the area, which are mainly office workers, accepted their concept rather easily, Near To staff are still tasked to educate customers further about their concept.
Nicholas believes that their Damansara Uptown location allows for steady foot traffic, so marketing is not a big concern. As long as the team continues to provide a good solution, there will likely be a wilful audience.
Near to success?
To start the store, Nicholas invested his own money from his previous ventures while also obtaining some capital from friends and family.
Now, to take his business one step further, Near To is fundraising for their first round.
As for expansion plans, rather than focus on opening new stores, which is more capital-intensive, they’re actually going the supply route.
This means bringing their NTE products to other independent stores, thus increasing Near To’s points of sale. This project is already in progress, with Near To supplying its discount products to five other locations currently.
“Our next step is to set up our own warehouse for buyers to come and purchase directly—a real warehouse sale,” Nicholas said.
While unconventional, the idea of selling near-expiry products is not novel. Malaysia is already home to various discount stores, and from personal experience, it seems like they do sell products that are closer to expiry.
With that in mind, as Near To grows, it may face some competition. But its lean, solutions-oriented strategy that allows them to work closely with suppliers certainly helps it stand out now.
And as for how Near To aims to maintain that competitive edge should newer businesses with similar models pop up, Nicholas said, “Dealing with NTE products is not common in the market. We are early in the market, and so have enough data on which SKU works and which doesn’t.”
“Any entrepreneurial person can replicate a business with enough studies,” he admitted. “But the experience is not something that can be replicated in a short time.”
Featured Image Credit: Near To
