Retailer continues to expand its presence despite soft market
IN a time when malls and shopping complexes are either closing down or struggling to stay afloat, hypermarket operator and retailer Mydin Mohamed Holdings Bhd seemingly continues to buck the trend.
This year marks a significant milestone for the company as it turns 60.
Mydin managing director Datuk Ameer Ali Mydin, who himself is 62, says that he – as well as the brand he’s helped build – have no intention of slowing down.
“Yes, times are hard and things are slowing down. But it’s an opportunity,” he tells StarBizWeek in an interview.
Despite the current property market glut, which has had an impact on the local retail sector, Ameer says the group is still continuing to expand its presence in the country.
“We’ve opened three hypermarkets this year – two in Kuching, Sarawak, and one in Padang Jawa, Selangor.”
Ameer says Mydin is targeting to open two more outlets by year-end.
“We will be opening another one in Kuching and one in Johor. Next year, we are planning to open three more outlets, specifically in Pahang, Sandakan and Kelantan.
“We are not stopping. We are carrying on as planned.”
With the slew of malls coming into the local market, industry observers and experts are predicting a grim outlook for the local retail sector.
Earlier this year, one industry expert predicted that 50% of shopping malls in the Klang Valley would be fighting for survival within the next five years – and about 20% would close down.
Based on reports, some 40 malls are slated to enter Greater Kuala Lumpur by 2020 – a dozen of which are boasting a net lettable area of one million sq ft. Thus the local retail market is set to be an interesting and challenging place.
There are about 250 malls in the Klang Valley currently.
The Malaysian retail sector got off to a sluggish first quarter, shrinking 1.2% in the first three months, due to weak Chinese New Year sales in January 2017.
Yet, despite a shaky start, the local retail sector is poised for growth this year, driven by steady-yet-cautious consumer spending, in-store promotional campaigns and boost in tourist arrivals.
The Malaysian Retail Chain Association expects an increase of about 4.5% in retail sales this year, driven by the country’s tourism industry.
Despite going on an expansion drive, Ameer is quick to point out that the group is ever mindful of the surrounding economic situation.
He says the local retail sector is currently still “feeling the pinch” from the previous economic slowdown, as well as the weaker ringgit.
“We continue to observe the market. For now, plans for this year and the next are on schedule as planned,” he says.
“We have a lot of land bank. When the wind is blowing, you go with it. But a slight resistance against it is still alright.”
Mydin currently operates 322 outlets nationwide, including premium store SAM’S Groceria, premium restaurant known as SAM’S Deli located in SAM’S Groceria and Kedai Rakyat 1 Malaysia (KR1M), a mini market format shop.
Its outlets encompass 24 malls; 25 hypermarkets, of which each is located in the malls; 16 emporiums; three bazaars; 47 mini markets (MyMydin); 12 convenience shops (MyMart), four franchise outlets (Mydin Mart), seven SAM’S Groceria supermarkets, one stand-alone SAM’S Deli restaurants and 179 KR1M branches.
Building a Malaysian brand
The next step for Mydin is to continue building the brand further, says Ameer. “The next step is to make sure that the brand gets better recognised.”
He admits that having grown the brand into what it is today means the company needs to work extra hard to not just maintain growth but also stay competitive in the challenging environment.
“It’s become a challenge and responsibility, having made the leap in the business. I am reasonably happy at where we’ve come but as an entrepreneur, I’m always looking at how we can improve and make things better.”
Ameer says the advent of technology, especially disruptive technology, only makes the environment tougher than it already is.
“Being the largest player, we also have to make sure that we’re agile enough and that we don’t become a dinosaur. Having said that, no matter how big or old you are, you always have to keep abreast of what is happening.”
Ameer says Mydin’s expansion plan will go beyond just its bricks-and-mortar business. Earlier this month, it was reported that the group plans to venture into the online business as part of a plan to expand and diversify its business portfolio.
He was quoted as saying that the company was awaiting the right time to launch the initiative.
Ameer says the market now is still very weak and that Mydin is awaiting an upturn before going online.
Mydin, which prides itself on being the country’s largest hypermarket chain, is happy with the growth level it has achieved over the past six decades, says Ameer.
“We’ve come a long way. If you asked us 30 years ago, we would never have imagined that we’d reach the level of where we are today.
“Locals know my name, so do international players, because we compete with them as well. We’re the largest local player as far as the retail distributive trade is concerned.”
The business was started in 1957 – the year Malaysia achieved its independence – by Ameer’s father, the late Mydin Mohamed, who passed away August last year.
Ameer’s father started out by selling simple merchandise such as toys, playing cards and minyak attar (non-alcohol perfume).
Ameer recalls how it was a challenge initially for the late Mydin to make ends meet.
“It was tough for my father. He was the sole breadwinner with seven children. We had to endure a lot of hardship.
“We were very poor. My father would buy one fish and all of the children would share it. My parents, meanwhile, will not have the fish and would instead just have the curry. The next day, we’d have the remaining curry with a slice of bread.”
Ameer says the children were lucky to even have leftovers the next day.
Some 20 years after the father started the business, the late Mydin’s eldest son, Datuk Murad Ali Mydin, expanded it by opening a second outlet in Kuala Terengganu.
Then in 1987, Ameer would bring the retail business to the heart of Kuala Lumpur with the third outlet on Jalan Masjid India.
“And the rest, as they say, is history,” says Ameer.
The secret to success – Mydin’s way
Growing up the hard way thought him humility, he says – a virtue that goes flying out the window when many businessmen today “make it big.”
“Having humility is important. A lot of people today forget their roots,” says Ameer.
He believes that the tough upbringing helped mould and motivated him to strive to become successful.
Having worked in a bank prior to taking on the family business also helped sharpen his business acumen, says Ameer.
“Working with a bank helped me a lot. Today, many people that start out in business end up failing because they’ve not had a well-rounded experience.”
Ameer notes that these days, many youths are eager to start their own business.
“I advocate that if you are a fresh graduate, please don’t go into business. Work somewhere first, preferably in a big organisation.
“Although this might prove difficult, being in a big organisation teaches you how to manage your processes. It also gives you the opportunity to meet new people that can help give you better business knowledge.”
Ameer says working for at least five years with a big organisation “can get you far.”
Working in a bank also helped Ameer hone his skills in managing cashflow.
“Today, a lot of people do not know how to manage their cashflow. Working in the bank for a while has benefitted me in running the Mydin business.
“But at the end of the day, its about having perseverance. If you wait and remain patient, you will make it. There’s no such thing as being a millionaire overnight.”
Ameer says many individuals, especially those that go into business, are too obsessed with getting rich quick.
“If you make it overnight, you can also lose it overnight. If you work hard, the wealth will eventually come to you. Do not chase money or fame, for it will come to you when you are ready.”