When you get lemons...


  • Focus
  • Monday, 08 Feb 2016

To adapt and keep the business going, you need to read the trends, says MBGs Lee.

With the currency down, costs up and belts tightening, this Chinese New Year won’t see the most festive of celebrations. But businesses could despair or they could try to be creative and make the best of a bad situation, writes GRACE CHEN.

THE year of the monkey is expected to be a difficult one, and you don’t need an economist or fortune-teller to tell you that. So what’s in store for the entrepreneur in 2016?

There is a Chinese proverb that says: Talk doesn’t cook rice. Action does.

MBG Fruit Shop marketing, purchasing and supply chain senior manager Thomas Lee says he had sensed from April last year that there would be challenges ahead.

True enough, receipts showed that cherry sales at MBG had halved from one tonne in January 2015 to just 500kg in the same period this year.

Over at Emerald Brilliant, a cheongsam house run by head designer Kong Yoon Yoon, life was no bowl of cherries either. Kong revealed that she had just let go of a 70.14 sqm shoplot at an airport terminal, and with it, 13 months of hard work and half a million ringgit in rental and renovation costs.

Tong says despite the rising prices, people are still celebrating and buying hampers at his shop.
Tong says despite the rising prices, people are still celebrating and buying hampers at his shop.

In such situations, entrepreneurs have only two options: Curse the darkness. Or light a candle.

“MBG started off as a fruit cart in Petaling Street. It’s a business that has lasted for three generations. So, we know how to read customer trends,” says Lee.

Customers may not be too keen on cherries but sales of grapes have increased by 120%.

“It reflects the economic situation. Instead of cherries, people are now buying grapes. We read this trend by studying the transaction statistics and was able to apportion our purchases to suit the times,” says Lee, who makes it a point to monitor the sales charts every day.

This year, Lee is targeting to sell up to 50,000 cartons of mandarin oranges for the Chinese New Year (CNY) season — 10,000 fewer than last year.

“It’s got nothing to do with pricing. It’s just that Chinese New Year is early this year. People have less time to shop,” he maintains.

Kong and sons, Ryan (l) and Sean Sim, have taken to doing roadshows in Johor in January and February to drum up business.
Kong and sons, Ryan (l) and Sean Sim, have taken to doing roadshows in Johor in January and February to drum up business.

Nevertheless, Lee has plans to open another 10 new outlets this year targeting LRT stations, public transport stops and hospitals.

Meanwhile, Kong has no regrets about letting her airport terminal shop go. She started the business from scratch in 1973 and, after the cull, now operates four outlets: her workshop and headquarters in SS2, Mid Valley Megamall, 1 Utama Shopping Centre and a boutique in Ipoh Garden South.

This is just how she runs her business. The moment an outlet is recognised as a non-potential earner, it’s ticked off the list.

When one door closes, another will open, Kong says.

“I have an invitation from Empire City to set up an outlet there. It’s an exciting feeling because all the superbrands are there. In spite of this vibe that times are ‘bad’, I still have fans who want my cheongsam,” she smiles.

Chinese artist Zhang is confident he can touch RM3mil to RM5mil in sales to Malaysians.
Chinese artist Zhang is confident he can touch RM3mil to RM5mil in sales to Malaysians.

Workmanship is one reason the business has survived this long, Kong reckons.

One interesting thing about her cheongsam is they can be adjusted to accommodate a person’s weight gain — up to 10kg, according to Kong. The secret lies in the hems which can be unravelled to reveal extra fabric.

This season, Kong and her sons, Sean and Ryan Sim, will be working to bring in about half a million in sales for January and February by going on roadshows in Johor.

Meanwhile over in Serdang, Five Stars Ecoprint general manager Bryan Yap is making a different kind of cut for CNY by manufacturing ang pow (red packets) — two million pieces in total.

“That’s not a lot really. One commercial bank put out a tender for eight million pieces!” reveals Yap, whose main business is offset printing for buntings, banners and other advertising materials for the corporate sector.

In truth, festive packets only account for 10% of overall sales. But it helps Yap open doors to new opportunities.

“I go in as an ang pow printer. Then I propose my ideas for their other printing jobs,” says Yap.

Teo and his team have livened up no less than a dozen malls for this Chinese New Year season.
Teo and his team have livened up no less than a dozen malls for this Chinese New Year season.

The strategy works. Since last May, sales have touched RM2mil. This has spurred Yap to consider a new direction: the Singapore market.

“Since our currency is lower, I have customers from across the Causeway sending things like boxes and such to me for printing. Even adding logistics costs, we are still cheaper. So that is a market for me to look at,” he says.

Certainly, with consumer sentiment being bearish, businesses have to think outside the box.

Creativity is what you need to keep a business alive, says 3 Point 8 Art & Creative marketing and events division director John Teo. Teo, whose team is responsible for bringing the festive feel to malls, says they have worked on about 12 shopping complexes. They also do decoration for homes, with fees starting from RM3,888.

As many of his decorative items are imported, Teo admits to being affected by the falling ringgit.

“Prices have gone up by 36%. Last year, I could earn 30% profit but this year I can only manage 12%. But I know the market is still there. To keep going, instead of bringing in 20 boxes (of stuff), I settle for just 10, for example,” says Teo.

Yap (right) and team got orders to print over two million pieces of red packets.
Yap (right) and team got orders to print over two million pieces of red packets.

Chinese artist from Shanghai, Zhang Lei, says it’s not all doom and gloom. Otherwise, he wouldn’t be here to sell his works.

Zhang makes it a point to come to Malaysia during CNY every year since 2009. Sales in just one month can touch RM3mil to RM5mil.

Kin Hong Medical Hall sales assistant Sean Tong believes in the Chinese proverb which says: “Man who waits for roast duck to fly into mouth must wait a very long time”.

“Yes, everyone says prices are up, the market is slow. But one just can’t stop working altogether. I believe one has to carry on or end up losing customers,” says Tong, who helps run the family shop in Taman OUG.

Still optimistic, Kin Hong is looking to move some 200 gift hampers this season.

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