Staying close to the customer' has made Karangkraf the top Malay publisher.
KARANGKRAF, the publisher, is a corporate phenomenon.
It has no peers in its line of business. It is the largest Malay language publisher. It owns the nation's largest commercial printer. It is also the proud publisher of the fastest growing Malay newspaper.
Its net worth now exceeds RM200mil.
Not bad for a company which started with just RM1,000 in 1978.
How did it happen?
Astonishingly, without any bank borrowings to fund its early growth.
More astonishingly still, especially for a Malay-owned company. It did all this without any help from the Government no permits, licences, loans, subsidies or handouts.
Karangkraf is also a cultural phenomenon.
In January, more than 250,000 people thronged its open day at its premises in Shah Alam. Most were from the Klang Valley. Many came from as far away as Kota Baru, Alor Star, Johor Baru, and towns and kampungs in between. Such is the pull of the Karangkraf brand in the Malay heartland.
For Datuk Hussamuddin Yaacub, Karangkraf's founder, the Malay heartland is not just a geographical description. It is shorthand for Malay identity and aspirations.
Hussamuddin's special talent is his ability to tune in to this cultural wavelength and sync with it. It is the secret of his publishing success.
Over a span of 40 years, he has come out with books and magazines that have been readily lapped up by an insatiable Malay reading public.
“The problem in those days was that most of the reading material we had was dull and uninspiring. It had very little colour and the presentation was poor.
“So there was this huge, pent-up hunger for reading material that was more real, more down to earth and more vibrant.
“So that was what we tried to do. We started by publishing books and magazines for young readers, writing about things people can relate to. Then we came out with stuff for young adults and books and lifestyle magazines on all kinds of subjects,” Hussamuddin says.
Karangkraf was unconventional. It published what others avoided, and was prepared to do it loud.
“The initial response surprised us,” Hussamuddin says. “Our first publication, Mingguan Kanak Kanak, sold more than 150,000 copies every week, and that was in the 70s, mind you!
“We were shocked! But we were also inspired. So we carried on doing more of the same, and it was not long before people recognised us as a publishing house that was different.”
Today, Karangkraf publishes 29 magazines and a wide range of books. Its magazines dominate almost every segment of the Malay language market and are read by nearly 6 million people every month.
All this is also the result of astute marketing. For most people, magazines are mere reading materials. For Hussamuddin the marketeer, they are more than that. They are products that tie him to his customer.
Every Karangkraf magazine makes it a point to host a function at least once in two months where it will have an opportunity to meet its readers and supporters. This can be a fashion show or a story-writing contest.
“This gives meaning to the relationship between publisher and readers,” he says. “And it strengthens loyalty to the Karangkraf brand.”
Karangkraf's publications reach all age groups, but have a special resonance with many who are below 40 the generation that grew up with Mingguan Kanak Kanak,Bacaria, Remaja, Nona and Media Hiburan.
How does one explain Karangkraf's ability to sustain its success over so many years?
Is it because of Hussamuddin's ability to meet and create demand at the same time, creating a cycle of wants that he has cleverly exploited?
He hesitates to make such a claim, but few doubt his ability to read the market correctly and responds with the right product time and time again.
Hussamuddin is determined to prove he has not lost this touch. Five years ago he launched SinarHarian, the newest Malay language daily, and his most ambitious publishing project to date.
Karangkraf had long flirted with the idea of publishing a daily. In the 80s, it came out with Esklusif, a tabloid on pop, entertainment and politics, but had to shut it down when the Government refused to renew its publishing permit.
Hussamuddin knew he was not in the Government's A list. But fortune favours the brave and the persistent.
In 2006, Pak Lah became prime minister and Karangkraf applied once again for a newspaper publishing permit.
“The Government surprised us when it granted us a licence,” Hussamuddin says. “I have no explanation why or how it happened. But we are grateful.”
The company launched Sinar Harian in 2007, setting itself up against long-established newspaper giants.
Hussamuddin, who is from Kota Baru, initially wanted the paper to be an east coast publication. But the initial public response confounded him. And sales climbed rapidly, not only in Kelantan and Trengganu, but also in the northern and central states in the peninsula.
Sinar Harian is a newspaper with a difference. It sells more than 160,000 copies a day, spread over eight editions. Kelantan has its own edition, and so have seven other states. So it is more like having eight different newspapers branded as one.
How is he pushing sales? Guerilla style, he says. Every district is served by at least one reporter, sometimes two or three if it is a big or busy district.
“Each reporter is armed with a Perodua Kancil, a blackberry or equivalent, a camera and a laptop. We have more than 250 of these reporters all over the country.
“We stay very close to the ground. We report what is happening in the community and we report both government and opposition news. People respect us for this.”
Karangkraf has taken “staying closer to the customer” to extraordinary lengths.
Hussamuddin says: “We are not just local. We are hyper-local!”
So far, Karangkraf has invested RM80mil in the project RM50mil to buy equipment, and RM30mil to run the business. Hussamuddin is confident his newspaper business will break even by 2015.
And the future?
“To become one of the biggest newspapers in the country,” he says. And one of the most profitable too.
This article is part of a series on Winning Companies companies that have achieved outstanding success by being creative and innovative. Research for the article has been supported by the Ministry of International Trade and Industry as part of a project to promote public discussion of issues relating to national economic competitiveness.
Related Stories: Doing business the Karangkraf way