The growth & growth of Mr D.I.Y

PHOTO: SAMUEL ONG/TheStar

Since it inception in 2005, Mr D.I.Y has grown into a popular, giant retailer of cut-price household items. Currently, they operate more than 220 outlets locally and in Thailand, but they’re far from being done, writes MEK ZHIN.

A STUDY in how to become a household name within a short span of time, Mr D.I.Y., the home improvement retail chain, is now setting its sights on establishing an even bigger presence by heading overseas.

This homegrown company opened its first outlet along Jalan Tuanku Abdul Rahman in Kuala Lumpur back in 2005.

That shop is still in operation today. It isn’t the typical bright and modern Mr D.I.Y. outlet that people have come to expect. Rather, it feels like a walk down memory lane as it looks more like your typical hardware shop.

“Mr D.I.Y started off much like a traditional hardware store,” explains Andy Chin, senior marketing manager.

The company experienced rapid growth from 2010 onwards after it began to open stores in malls. 

“But we’ve always had an eye on growing the business. As such, we invested in a point-of-sale (POS) system from the get-go. This was key to an efficient and easy expansion,” he adds.

And expanded, it did.

According to Chin, by the end of the first year, they had three outlets running. Today, they have 220 branches all over Malaysia as well as half a dozen in Bangkok, Thailand.

This may sound like a lot of stores, but Mr D.I.Y is not quite done yet.

Chin reveals that they aim to open 70 new outlets in Malaysia this year, and so far, are on schedule to meet this target. Last year, they had set a target of 60 new outlets and pulled it off without a hitch.

Their venture abroad only started this year.

Mr D.I.Y.’s first overseas outlet was opened in Bangkok early this year, and the target is to have 20 outlets in the megacity by the end of the year. Again, the company says it is on track to pull it off.

Housewives are the main target market for Mr D.I.Y. but they like to say they cater to everyone, from eight-year-olds to 80-year-olds. 

Some businesses, when dealing with the subject of expansion, follow certain fixed rules such as having a store of a certain size and serving an area of a fixed radius in order to avoid cannibalising themselves. But Mr D.I.Y does nothing of the sort.

According to Chin, new outlets are opened based on actual market demand, which they determine through a mixture of in-house analysis of self-collected data and business acumen.

“Our market research is quite extensive and is based on raw data that we collect from our activities, as well as from sales. Generally, once we have learnt what works for a certain kind of localised market, based on location, surrounding population demographics, etc, we will apply the same logic to a store in an area with similar circumstances.

“It has worked well for us,” he says.

The company’s rapid growth period started from 2010 onwards, says Chin, and took place in the same year in which they opened their first mall-based outlet. It marked a new trend for the company.

From standalone shops, Mr D.I.Y. eventually grew to become an anchor tenant and forged partnerships with large retailers such as Tesco, Giant and Aeon.

“Some might say we are partnering with the competition, but we believe that we are filling a gap in their businesses. We carry some 20,000 different products across nine categories. Our stores are a one-stop-centre for everything that a home could need — except groceries, which is the specialty of the large retailers,” says Chin.

The busy warehouse in Balakong runs 24/7, every day of the month. 

In the East Coast, they found that there were fewer number of malls. But this has not stopped them from their bunny-like self-replication and they have found themselves back in shoplots, often spread across three or four units at once.

Store sizes can be anything between 2,000 sq ft to 20,000 sq ft but Chin says their average size is about 10,000 sq ft.

Their most popular items are from the household, hardware and electrical sections, so it isn’t surprising that their main target market are housewives.

“But we like saying that eight-year-olds to 80-year-olds can find something in our stores. As for our secondary target market, it is businesses. We believe our cheap prices attract them to look for quick fixes in our stores, but on a case-by-case basis and not direct B2B selling,” elaborates Chin.

He says it may not be a well known fact but Mr D.I.Y. tries to add something new to their stores every week.

“Our purchasing department is quite a busy one as they have to constantly bring in new products. About 95% of our products are imported. In a month, we easily bring in 200 containers’ worth of products from China, Vietnam, Indonesia and Thailand,” he reveals. Their product mix is actually 50% staples and 50% unique or innovative items — something that, more often than not, will be picked up by customers in addition to whatever they came to buy.

Right from the beginning, the company invested in a good point-of-sale system with an eye to expanding its presence.

If there’s one thing that Mr D.I.Y. will always be remembered for, it is their memorable advertising and marketing campaign last year around the time the GST was about to be implemented. The tagline said: “GST 6% Kami Bayar: Biar Kami Rugi, Anda Puas Hati (We will absorb the 6% GST: Let us take a hit, as long as you’re satisfied).

Chin says their campaigns always go back to their vision, which is to prioritise customers by running an innovative and flexible business that offers variety, quality and value-for-money. After all, their motto is “Always Low Prices”.

“We looked at successful businesses in developed countries for inspiration. For instance, we found that in Japan, healthy competition in the market kept prices low, which was a means of attracting customers. It was a good lesson. Other strategies we have employed include purchasing in bulk or even giving purchase volume commitment, not purchasing on credit and doing our own logistics,” he says, adding that the latter actually brought their logistics cost down from 5% to 1%.

Their current campaign tagline is “Beli Cermat, Poket Selamat” (Spend thriftily to keep your pockets safe) which is a play on an oft-repeated message on road safety.

“Early this year, we realised that the country was slowly headed for tough times, with more people finding it hard to make ends meet, so this is our way of reminding people that we are an option for their needs. In fact, we find that in some locations, even when most of the mall’s tenants have moved out, people still come because they want to shop at Mr D.I.Y. specifically,” Chin asserts.

In fact, the company sees an opportunity to expand their market reach in bad times as more people look for cheaper options. And the fact that their products are mostly necessities tend to make them a crowd-puller.

Mr D.I.Y. runs its own fleet of transport vehicles that are tasked with delivering stock from its warehouse in Balakong to its outlets all over the country every day.

Chin estimates that Mr D.I.Y serves some 70 million customers a year. The average annual turnover is close to RM1bil.

“We will only stop expanding here in Malaysia once we have reached 500 outlets. We feel this is the optimum number of outlets for the market. For Thailand, it’s about 1,000 outlets.

“We are also going into the Brunei market but feel that at most only about 10 outlets would work there,” he says.

As for Mr D.I.Y’s future plans, Chin points to e-commerce which he says will be exciting because it will allow them to bring in very unique offerings to the market previously deemed unsuitable for their retail stores.