Rotiboy is famous for its fatal-attraction aroma
of coffee-flavored Mexican buns, which smells from distant away, and
attracts anyone who passes by the shop. Just go to KLCC Suria on
Saturday and see how long the queue down there on the ground floor in
front of Rotiboy’s cash counter. In fact, this long queues used to
present a problem for owners of Rotiboy’s outlets – a rare case of
good-news problem.

The story of Rotiboy is also an interesting entrepreneurship case
study for its remarkable experience undergoing a meteoric rise followed
by a spectacular fall soon after.

Rotiboy was first set up in 1998 in Bukit Mertajam, Penang,
providing small-size, affordable cakes and buns in the neighborhood
which soon became a household name in Bukit Mertajam. The founder, Hiro
Tan was a former lecturer in economics before deciding to open up his
own bakery business.

With his bakery products getting popular, Hiro sensed a new
opportunity. He wanted to jump into a bigger pond, catching bigger
fish. So he decided to move to the country’s capital, Kuala Lumpur,
which has been a land of opportunities for many others.

The first Rotiboy outlet in Kuala Lumpur was opened in 2002, which
is based in Wisma Central, Jalan Ampang. This is where Rotiboy’s
Mexican bun jumped start a phenomenal growth and at the peak of its
fame, the outlet was selling an outrageous number of 20,000 buns per
day. More and more outlets started mushrooming, one after another –
KLCC Suria, Midvalley, The Mines and so on. Rotiboy’s next target –
overseas covering Singapore, Thailand, Indonesian and China and this
was pulled off expertly through the robust franchise system. The target
was to achieve 100% growth rate every month.

Seeing the overwhelming success of Rotiboy, copycats and imitators
started sprouting like mushrooms. Soon came Pappa Roti, Roti Mama, Roti
Mum, Baker’s Boy, Mr Bun and all sorts of bun shops all over the
places. They all sniffed opportunities, and they want one thing in
common – profits.

However, good things came to an almost abrupt end. While the buns
were getting a crazy attention in 2004 and 2005, things were in the
reverse from the beginning of year 2006. Rotiboy was no longer people’s
savior. It is no longer the in-thing for the day. The fall was so
catastrophic that the company had to pull out almost its entire
operation in Singapore. The normally crazed cream filled buns were not
selling like hot cakes anymore.

Apart from Rotiboy, its copycats and imitators suffer the same fate, if not worse.

Why is this so? Why a popular product underwent a free fall within a short span of time?

According to one of the owners of the outlets, the bun was no
longer selling much because ‘the fad is over’. They also learnt an
important lesson, which is to start diversifying products in
anticipation of market uncertainty selling merely one product. They
need to keep reinventing and reengineering the products and services to
cater the evolving demand and market.

Maybe, the bun market will be booming again when the next fad cycle
arrives, but when it will come whether it will eventually be here is
surely be a long debate.

Moral of the story is; it is not a wise move to start a business
because of some buzz hype that last only for a short while. A viable
business model takes account the sustainability of the demand and the
market. Keep that in mind when opening a new business.