- Prism+ achieves success through D2C strategy.
- Quality concerns arise despite rapid growth and increased advertising.
- Founder retains 99% stake in parent entity.
Singapore-based Prism+, founded by NUS Business School alumnus Jonathan Tan in 2017, has achieved remarkable success in the retail retail space for consumer electronics.
The company’s direct-to-consumer (D2C) strategy and emphasis on excellent customer service have been key factors in its growth, allowing Prism+ to sell products at one-third the cost compared to competitors.
Rapid growth, quality concerns
Prism+ has expanded its product range from home entertainment electronics to smart home appliances, resulting in a surge in annual sales growth.
However, the company’s flagship smart TV product has attracted mediocre reviews and customer complaints regarding durability. Despite these concerns, Prism+ maintains high ratings on
e-commerce platforms and runs a 24/7 omnichannel customer service platform to win customers’ trust.
As Prism+ expands into new markets, it has increased its advertising spend to maintain brand awareness. Advertising expenses accounted for 37% of the company’s total operating expenses in FY 2023.
However, some of the company’s marketing efforts have faced criticism from Singapore’s advertising standards watchdog. Employee benefits have also seen a significant increase, doubling from FY 2022 to FY 2023.
Founder’s majority stake
Unlike typical startups, where founders’ shares are diluted through venture capital investments, Prism+ founder Jonathan Tan retains over 99% of the shares in the company’s parent entity.
The company has secured US$31.9 million via a financing round from TNB Aura in 2022, which is assumed to be represented by the 9.4% stake that the investors hold.
To read the original article: https://www.techinasia.com/prism-built-profitable-business-missteps
