It was just one small electronic shop in 1989, but through sensible management and its commitment to customer satisfaction, Senheng grew into the giant retail chain that it is today. JESSIE LIM has the story.
IT started out as just a tiny consumer electronics shop in Pandan Jaya, but Senheng has, against all expectations, grown into one of Malaysia’s leading consumer electronics chain.
Since its inception in 1989, Senheng Electric (KL) Sdn Bhd has grown by leaps and bounds, becoming a household name in the process, with 125 shops scattered across the country. It has even ventured overseas to Vietnam, where it has four outlets.
Founder and managing director Lim Kim Heng fondly recalls the challenges he faced when he first started the business with just RM90,000 and a staff of four — two technicians, his wife and himself.
“When you’re new, you have no brand. Customers don’t know who you are, so it was difficult to attract them. To get good support and inventory was equally tough, as suppliers didn’t know who we were either.
“I also didn’t have a delivery team, so my brothers, after finishing work at 6pm everyday, helped deliver goods to our customers’ houses. And money, that was another thing. After renovating the shop and spending on stock, I was left with hardly anything.
“That was really a challenge,” says Lim.
Fast-forward to 2015, and Senheng is celebrating its 26th anniversary. Sales for the three quarters this year, have surpassed the RM755mil mark, taking into account revenue from both the Senheng and SenQ stores.
Lim is confident they will hit RM1bil by the year-end, just like in previous years.
According to Lim, his business philosophy is simple — customers come first, followed by your business process.
Let’s say you have two items — one a quality product offering lower margin and the other a lower quality item but promising higher margin. Which would you sell?
Businesses can, of course, choose to put company first and push the item that gives higher margin, but Lim strongly believes in selling quality products so customers would be happy. Why?
Because then, in the long run, they will come back for more, Lim says.
He adds that it’s also important to create an unforgettable shopping experience for his customers.
“We are constantly working closely with suppliers to provide exclusive offers to our customers or to pre-launch new items before they are available everywhere.
“We also train our sales personnel to be polite, to listen and understand our customers’ needs before proposing a suitable product. Our customers also get an additional one-year warranty so they have peace of mind, and would be able to replace appliances if they break down within two years.
“Equally important is the after-sales service, like home delivery where we have a mapping system that allows customers to choose the time. We don’t want to tell our customers to only wait till there’s a full load before delivering to them. We want to deliver at a time they pick. And if the delivery boy is an hour late, we will give our customers a free rice cooker by way of apology,” Lim reveals.
Customer trust is of the utmost importance, he stresses.
In 2002, Senheng launched its PlusOne loyalty card programme.
Today, it has a customer base of around two million, with card members getting to enjoy benefits and privileges like extra warranty, special member prices, free delivery, reward and redemption points, members’ day, cash vouchers and more.
Lim takes pride in the loyalty card programme because 95% of his daily business is from PlusOne card-members.
To celebrate its 26th anniversary, from Sept to Nov, Senheng is rewarding its PlusOne customers who spend RM999 and above with a RM26 Christmas voucher to spend in December, a RM26 Panasonic voucher for a rice cooker, blender or iron, a RM130 voucher for a Sharp air purifier, and a RM100 voucher for eZen bird’s nest.
Lim estimates that they have spent RM4mil on this campaign.
Not one to rest on his laurels, Lim is constantly looking at ways to expand and improve the business. He plans to open another 10 outlets, including a new concept store which will be the biggest yet, all by the end of the year, despite the market being soft with the implementation of the GST.
“It’s all about opportunity. During times like this, fewer businesses will open, so there will be more empty shops with hardly anyone to compete with, and rental is better too. Of course, I weigh my pros and cons first,” Lim says.
Another big project is for his company to go paperless next year.
“We have been cutting down a lot of trees by just using paper. Our sales volume and transactions are big so there is a lot of paperwork involved — from documents, invoices, to payslips and tenancy agreements. So we have engaged services from Korean, Japanese and Malaysian companies to help us with the paperless operation.
“Information and figures will be stored electronically in HQ. Everything will be centralised so our work can be organised leading to our productivity increase,” Lim says proudly.
The Senheng Group has over the years also diversified, setting up more than 10 companies in different businesses including pet shops, bird’s nest products, fish farming and business-intelligence solutions.
Asked whether the GST has impacted his business, Lim says they were already prepared for it and so they have been able to adapt.
“We travelled to Japan to better understand the impact of GST on that country. We were lucky that some of our business partners are from Japan, so we were able to head there and learn from them.
“To prepare for the GST, what we did was to manage the inventory by cutting down because inventory equals cash-flow. Also, our forecast was right — that the sales would shoot up just before GST. We gained sales in February and March, and that helped to sustain us during the next three months post-GST when the sales were down,” explains Lim. The business has since picked up again, and Lim is looking forward to greater things for Senheng.