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Monday September 17, 2012

RadioShack makes a comeback in Malaysia

IT’S FASCINATING to think that computer geniuses Steve Jobs and Steve Wozniak spent many hours in their garage putting together their own computer using parts from RadioShack. That computer went on to become Apple 1.

RadioShack’s small contribution to the rise of Apple will always find a way into Berjaya, RadioShack Sdn Bhd chief operating officer Yau Su Peng’s talk about the brand.

RadioShack was the brainchild of two brothers from Boston in the 1920s who wanted to provide equipment for amateur radio enthusiasts. After expanding to nine stores and an extensive mail order business, the company went bankrupt and was bought over by leather goods manufacturer Tandy Corp.

Tandy Corp later divested its non-electronic businesses, but not before the brand had grown internationally. Last year, the company raked in US$4.4bil (RM13.2bil) in sales. RadioShack, a one-stop electronic-supplies chain, opened its doors in Malaysia last month in Mid Valley Megamall.

A second debut: Yau (above) is positive about RadioShack’s return to
Malaysian shores. A second debut: Yau (above) is positive about RadioShack’s return to Malaysian shores.

For Yau, it has been a busy year getting everything in place for the official launch of the US chain later this week.

“Everything was done within a period of 12 months. From the time we met up with RadioShack’s management to closing the deal and opening our outlet in Mid Valley, it took less than a year. So things are moving very fast,” Yau said.

But Yau is not about to rest on her laurels because she has big plans for RadioShack in Malaysia and even beyond.

A second coming

RadioShack made its first appearance in Malaysia back in the 1990s with an outlet in Bangsar. However, the did not do well back then.

Yau said, today RadioShack is looking at a different strategy to expand in the Asian region and wanted to go by way of franchising. The origal outlet in Bangsar was a dealership.

“RadioShack has been in the region for the last two years or so and they have been looking for franchise opportunities to grow the brand here,” she said.

Early this year, Berjaya group via its subsidiary, Berjaya Retail Bhd, signed a master development agreement with RadioShack to expand the electronics chain store across 10 countries in the region.

As a franchise developer, Berjaya has sales and distribution rights to brands retailed by RadioShack, store rights, Internet selling rights and sub-franchising among other things.

“What we like about RadioShack is that it is a stable brand and it is able to cater to all segments. We had been looking at ways to build on what we have and we were looking for brands to complement the other brands under the Berjaya group. We see a lot of potential synergies between RadioShack and our other brands,” Yau said.

Among the brands under the Berjaya group stable include 7-Eleven, Borders bookstores and Singer.

As an example, Yau explained that RadioShack would complete Berjaya’s reach to the urban and non-urban consumers. As Singer retails mainly household items to the outer urban areas, RadioShack, on the other hand, will sell IT peripherals that cater to urban consumers.

“Additionally, we find that RadioShack fits into the reading and discovery lifestyle that is particularly prevalent in our other brand, Borders,” Yau said.

RadioShack opened its second outlet in the Borders bookshop in Gardens Mall last week and Yau noted that RadioShack may continue to explore the store-in-store concept with more Borders locations moving forward.

“We are pleased that our Mid Valley outlet has shown a general appeal to various groups so far. The interest is definitely encouraging,” she added.

A different retail experience

Avid electronic consumers are probably used to getting their fix at a few places famed for such items including Low Yat Plaza.

But RadioShack offers consumers a different retail experience.

“Often, it is not easy for non-tech savvy consumers to buy electronic goods because we really don’t know where to get them or what to get. So we are trying to provide a comfortable and non-threatening environment for our customers so that they will have a pleasant retail experience. We will have our own appeal to new audiences,” Yau said.

One of the most recognisable features at RadioShack is its racks of electronic components with clearly labelled items, which enable customers to browse through items with ease.

RadioShack is also big on DIY electronic items and consumers will be able to purchase pre-packed DIY kits. This works well with Yau’s strategy of opening up more RadioShack stores within Borders bookstores.

“From our Borders’ experience, we find that more parents want their children to discover and create things on their own and they are willing to pay top dollar to buy DIY kits that will enhance their children’s learning experience,” she said.

This, notes Yau, also allows RadioShack to leverage on Borders’ customer base.

Yau acknowledges that RadioShack may not be able to compete head-on with other electronic suppliers in terms of pricing.

However, she noted that consumers these days are looking for value and reliable quality and RadioShack is able to provide such products that are affordable to every segment.

Additionally, consumers will be able to purchase items unique to RadioShack like its own proprietary brands including Auvio, Enercell and Gigaware.

Yau added that the local outlets will be able to leverage on RadioShack’s consumer knowledge and purchasing power given its vast presence in different markets.

“There is a lot of work ahead to promote the brand, but we are optimistic about its potential here. We are filling a gap in the market for consumers who want to make their electronic buys in comfort,” she said.

A lot of Malaysians who have travelled to the US are nostalgic for the brand and Yau said this growing number will keep the buzz going for RadioShack.

Growth plans

Yau will be kept on her toes over the next few years as plans are already underway to open more outlets in the Klang Valley. She said the company is aiming to have at least 10 more RadioShack stores open nationwide by the end of the year.

“We are upbeat about the brand here, but we want to be responsible with its growth. We still need to learn how to customise the business for the local market,” she said.

She added that Berjaya Retail is already speaking to parties interested in partnering with them for markets outside of Malaysia. Berjaya is looking for joint-venture partners to expand the RadioShack brand for markets abroad.

It was reported that Berjaya intends to open at least 1,000 franchise locations across Asean within the next 10 years.

This offers RadioShack the potential to nearly double the number of RadioShack’s total dealer-franchise locations worldwide and increases the company’s global presence to 39 countries.

According to Yau, the set-up cost for a RadioShack outlet ranges from RM300,000 to RM400,000 excluding its stock.

“Our investment on the stock is not fixed. It depends on customisation to fit the market. We are still trying to get the right product mix,” she said.

That said, Yau is ready to take adioShack as far as it can go.

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