Innovation drives Senheng ahead

Grand Senheng Elite - one of Senheng's multiple flagship store brands.

PETALING JAYA: Senheng New Retail Bhd, en route to a listing on the Main Market this month, aims to stay ahead of the competition as the country’s largest consumer electrical and electronics (E&E) retailer sets itself for expansion.

Executive chairman Lim Kim Heng told StarBiz that the group would continuously innovate its business model to stay ahead of the curve and cater to the latest consumer trends.

“Since our inception, we have undergone six phases of transformation, with our latest being the digital transformation in 2015 and transition into seamless New Retail Model in 2017.

“The latest transformations involved digitalising our operations, as well as integrating physical stores and back-end functions to our online platforms and Senheng App.

“Through these enhancements, we continued to capture customers, which ultimately contributed to our revenue growth to consistently exceed the RM1bil mark since 2018,” he said.

Senheng is the largest consumer E&E retailer by revenue, offering a comprehensive selection of over 280 different brands.

Lim added that the group has an extensive chain of about 100 physical stores nationwide, and is about two to four times larger in store count compared with some of its key competitors.

Executive chairman Lim Kim Heng (pic) told StarBiz that the group would continuously innovate its business model to stay ahead of the curve and cater to the latest consumer trends.Executive chairman Lim Kim Heng (pic) told StarBiz that the group would continuously innovate its business model to stay ahead of the curve and cater to the latest consumer trends.

Furthermore, he said e-commerce platforms complement its physical retail offerings to provide a seamless and convenient retail shopping experience, which is one of the key strengths of Senheng.

He said the contributions from the members of its PlusOne loyalty programme alone accounts for more than 95% of the group’s annual revenue from 2018 till 2020.

Senheng’s PlusOne loyalty programme has has about three million members.

On another note, Lim said despite the onset of the Covid-19 pandemic, the retailer had managed to chart a 13% revenue growth to RM1.3bil in the financial year ended Dec 31, 2020, on the back of multi-dimensional strategies to adapt to the pandemic.

“We rose to the challenge by upgrading our stores to feature bigger store space and product variety.

“Furthermore, we leveraged on our online presence and innovative telemarketing initiatives to continue serving our customers despite physical store disruptions due to the various movement control orders (MCOs),” he said.

“While the Covid-19 pandemic remains uncertain, our ability to maintain healthy growth proves our resilience. Not only that, our digitally-forward operations enable our adaptability in facing adversities in the marketplace,” he added.

On its expansion, Lim said Senheng’s expansion strategy involves setting up new stores as well as elevating customers’ in-store experiences by upgrading existing stores into bigger and enhanced concept stores.

From 2022 till end-2024, he said the group intends to upgrade as well as set up a total of 61 stores across multiple flagship store brands, namely “Grand Senheng Elite”, “Grand Senheng”, “Grand senQ” and “senQ”.

As to whether there are plans to venture overseas, Lim said: “At the moment, we see plenty of growth opportunities in the domestic market and the focus is only on Malaysia.

“We have continued to record increasing PlusOne memberships and are eager to enhance our in-store experiences and product range, which will ultimately drive more sales.”

He said Senheng also strives to bring more benefits to its PlusOne members by leveraging on its Senheng App, which will soon allow members to access third-party lifestyle-based services on its ecosystem.

“This will open up a larger variety of exciting and new shopping experiences for our members,” he noted.

Commenting on the outlook for the retail industry in 2022, Lim said he believes the market would improve this year as economic activities pick up.

Particularly for the E&E segment, the company is seeing increasing sales amidst the era of digitalisation, a key trend that is prevalent not just in Malaysia but also across South-East Asia.

Additionally, he said the rollout of 5G and Internet-of-Things products as well as related home and lifestyle equipment, is anticipated to spur sales as consumers upgrade to the latest technology.

The group, which is expected to be listed on Jan 25, launched its prospectus on Dec 29.

Senheng recently signed an underwriting agreement with Mercury Securities Sdn Bhd, CIMB Investment Bank Bhd and AmInvestment Bank Bhd to underwrite 52.5 million shares.

This would entail a public issue of 250 million new shares and an offer-for-sale of 139.5 million existing shares.

At an issue price of RM1.07 per share, Senheng would raise RM267.5mil in proceeds, which would mainly be used for the setting up of new stores and upgrading of existing stores into bigger, enhanced concept stores.

The proceeds would also go towards upgrading back-end capabilities such as developing new brand distribution business, expanding and upgrading logistic network as well as boosting the group’s digital infrastructure.

Of the 250 million new shares, 149.5 million would be placed out to institutional and selected investors and 48 million shares would be placed out to bumiputra investors approved by the International Trade and Industry Ministry.

Another 22.5 million shares would be made available for application by eligible directors, employees and persons who have contributed to the group’s success.

The remaining 30 million new shares would be made available for application by the Malaysian public through balloting.

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