Physical stores to drive Beshom sales

Beshom is the investment holding vehicle assuming the listing status of Hai-O.

KUALA LUMPUR: Beshom Holdings Bhd, the investment holding entity which now assumes the listing status of Hai-O Enterprise Bhd, believes the main area of sales growth will come from physical stores following the relaxation in movement restrictions.

This is despite the strong growth that was seen in its eCommerce sales during movement restrictions that was imposed during the Covid-19 pandemic.

Beshom chairman Ng Chek Yong said the group had made a big stride towards digitalisation of the business especially during the pandemic.

“The team has shown its resilience during this period of hardship even with the strong and disruptive headwinds during Covid-19. We have been agile to face these short-term disruptions.

“What we have built will go a long way towards sustaining the momentum of the group, moving forward,” Ng said at a briefing after its AGM yesterday.

The consumer retail company, which has four main business segments namely wholesale, multi-level marketing (MLM), retail and manufacturing, has seen a tremendous growth in eCommerce and it now makes up 20% of its total sales.

“Our business depends heavily on mega events and was very much impacted by the lockdowns.

“So we immediately had management intensify our expansion through digitalisation,” said group executive director and chief financial officer Hew Von Kin.

Hew said that in the financial year ended April 30, 2022 (FY22), total eCommerce sales accounted for about RM35mil of group revenue.

“For this year, we find that since the lifting of movement restrictions, Malaysians still prefer store visits so we foresee (eCommerce sales) may soften a little bit.

“We will continue to promote both physical and eCommerce in tandem, and both platforms can complement each other,” he added.

Ng said Beshom hopes to sustain its profit margins even as consumer sentiment becomes a little more cautious with the rise of global inflation.

He said it would employ various strategies such as repackaging certain products into smaller and more affordable sizes in the face of persistent inflation.

“We would like to develop the right products, at the right time and the right costs while maintaining quality,” Ng said.

Meanwhile, TA Research said in a report it anticipates Beshom’s wholesale division to continue its recovery momentum in the coming quarters.

“The group intends to roll out more products in the wholesale division to diversify its product portfolio and tap new market segments.”

On Beshom’s retail division, the research house noted that the group is developing new in-house brands to increase its product mix and improve its margin.

“Profit margin for this segment will likely improve with the ongoing rationalisation exercise to optimise its physical outlet via closing and relocating of non-performing outlets,” it said.

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