Courting consumers with low price promise


  • Business
  • Saturday, 16 Mar 2013

A COUPLE of weeks ago, I managed to catch up with Allard Sjollema, the country director of Courts (M) Sdn Bhd for a “Power Lunch” session over local Malaysian kuih-muih and fruits at its store in Setapak.

While handing over my name-card, Sjollema immediately picked up on my Indonesian surname, forgiving my inability to pronounce his Frisian-influenced name and proceeding to tell me about his adventures during his previous visits to Indonesia. Being Dutch and having relatives who have worked in Indonesia before, Sjollema has on numerous occasions visited our South-East Asian neighbour.

He tells me that even without leaving the Netherlands, the influence of Indonesian culture could be easily felt in Holland and that this is most obvious in their available cuisine. Sjollema tells me of his penchant for satay, lumpia and babi panggan, as an array of Malaysian kuih-muih is served to us.

“People make this at home in Holland. It's like a badge of honour. If you know how to make it, then it shows that you had family that had been in Indonesia, and that's something people are proud of in Holland. We love Indonesia. There's a love affair. It's nostalgic. Wherever you go in Holland, you'll see that,” he tells me, as he samples the kuih lapis, likening and comparing it to the spiku that he knows from back in Holland.

As we talked about his love for Indonesian cuisine, the conversation soon progressed to a discovered love of Malaysian fare, which he's been enjoying with relish since moving to Kuala Lumpur two months ago. He has also had the opportunity to sample our fruits, including the most notorious of them all, the durian.

On this, he tells me that it really isn't too difficult to accept, as the Dutch too have delicacies that are not always widely appreciated by foreigners, such as the national dish of raw herring “There are even some Dutch people who won't touch raw herring. In the summer when the boats come in with the new catch of herring, you eat it on the street. You have a pot of raw onions. You pick it up by the tail, dip it in the onions and the whole herring goes into your mouth. It's like Dutch sushi.”

Coming back to the topic of his relocation to Malaysia, I wondered what triggered his interest to consider this move across the globe. “Because of the job. The challenge. It's just very interesting. The opportunities are very big. I think Courts is very interesting because it's a company with a strong brand but also a young company.

So, there's both the long tradition of facilitating and the challenges and energy of a young company because we went public only a few months ago,” he tells me forthrightly, as we discuss the difference between his current posting and his previous role.

Having previously worked with organisations such as Makro and Tesco, Sjollema shares with me that working with an Asian-based business has some advantages over a larger company. This is so especially when it comes to store concepts, explains Sjollema, as the focused and innate understanding of the Asian market region has enabled it to avoid many “translation battles” to make its concepts successful.

Expansion

Courts was previously listed in Malaysia and Singapore. However, it delisted five years ago when its mother company (at the time) stopped trading in the United Kingdom. Since then, Courts has gone through several changes from becoming independent and privately owned by the Asia Retail Group to being listed on the Singapore board late last year. Sjollema takes a confident stance on the direction that Courts will be heading “What we're doing now is we're going through a phase of expansion. There was a period of turnaround. Courts had quite a big footprint in Malaysia at a certain time. Then the restructuring was necessary because the whole ownership issue made it a little bit complicated. Now, the business is in a very strong position. We're financially healthy. So this is the moment we are looking at expanding. The first country that we're expanding into is Indonesia.”

“We are firmly set up. I have a counterpart there. A country director has been appointed. I can confirm that we are now committed and set up.”

Sjollema shares with me that the company's initial public offering was positively received by investors, and this has enabled it to be on track to expand to a total of 90 outlets within five years in Malaysia. On March 22, Courts is scheduled to open in Sungai Petani, marking the opening of its 60th outlet. He tells me that one of the key factors it looks at when launching a store in a new location is whether it's able to fill the void among consumers. And looking at the shift in population for areas such as Amanjaya, Courts has also shifted to make modern household utilities available for rural areas that are slowly transforming.

Clear on the proposition of growth, Sjollema tells me that besides the expansion into rural areas, Courts will also be making itself more prominent within the Klang Valley. “I do think that in urban areas, we're going to look at the kind of formats that we're going to do, and there will be more innovation. The kind of stores that you see in the Klang Valley now is what you're going to see continuing to expand in the rural areas. And you can expect some experimentation. We're working that out. But be on the lookout. I think that within this calendar year, you'll see other store formats in the Klang Valley which will make the market more exciting.

In an area like the Klang Valley where there is a lot of competition and sophistication, you really have to get ahead of the competition to excite”, he tells me, without giving away the details on what he's got up his sleeve. The only hint is that the company is fast expanding into the digital range, which he feels it was previously under-represented in.

“As we speak, the range is increasing and our presence is expanding very fast... new range and ways to interact with the public. Selling the latest technology is not the same as selling furniture. There's a lot of technology available that can help us to interact with our customers.”

Pricing

Whether competition from other superstores and also small standalone stores is a concern, Sjollema shrugs this off with confidence, “We are specialised and very clear on this. What we sell is what people want to have at home to improve their lives. We're not into selling puzzles and toys. It's mostly big-ticket items. Our prices are competitive. I think sometimes when you go to a place that looks cheap, you think the prices are cheap. It's not necessarily the case. We are confident that our prices are competitive.”

Courts has in place the “Courts Lowest Price Promise”, which complements its own in-store financing. “The credit that we offer is completely our own. Really Courts itself. That's one of our unique selling points. They work from RM2,000/month upwards and 70% of our credit customers are from the lower income. It's a purchase-by-purchase credit scheme that we provide. It is competitive and different from credit cards. Credit cards make their money from the fact that most people don't pay on time; 60%-70% of people roll. Credit card companies want you to not pay. That's not what we do. We have very clear policies, we're in touch with them and they come every month to pay. It's a very close relationship,” Sjollema shares.

On the number of customers that have taken to this, he tells me that it's been widely appreciated. In addition to this, it is looking to also bring more awareness to its home club, which offers on-the-spot discounts to members, and also monthly promotional notifications and additional offers. Online shopping

Not stopping there in its plans for expansion, Sjollema speaks about the company's venture into the online shopping world “The approach so far is a soft-launch. We started on Jan 15. We're not yet marketing it. You start soft and let traffic come to your site. The next step is to go out and advertise it and that's when you get the big traffic. We're, at this moment, still in the testing phase. We can potentially sell everything there. We now have only a limited range, but potentially will expand on it.”

The majority of its sales will still be focused on pre-assembled furniture. However, for furniture that needs to be assembled, this will be taken care of upon delivery without additional assembly charges. Sjollema tells me that it's a priority for Courts to have its website fully functional and running, and that he hopes to soon be able to announce an activation date.

With that said, our interview drew to a close, as Sjollema excused himself to excitedly welcome in the lion dance troupe that had just arrived for the Courts Chinese New Year celebrations.

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Business , Power Lunch , Courts Malaysia

   

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