Retailer rides out weak demand with local goods
Opportunities to promote local products in China through trading partners
WITH the weaker demand brought on by the prevailing local and global economic challenges, local retailer Sunshine Wholesale Mart Sdn Bhd expects to have the upper hand with its wide offering of locally made products.
Chief executive officer Cynthia Hwang notes that its variety helps Sunshine retain its customer base.
“We source over 90% of our food stuff and household items from Malaysian manufacturers. The other supermarkets and hypermarkets don’t carry the variety of locally made products that we do, which is why our customers keep coming back to us.
“It is not so much about pricing as it is more about preference. For example, it is difficult to get our customers to use imported food stuff because they are accustomed to the taste and flavour of locally made food products,” she says.
This will help sustain minimal growth for the retailer.
Notably, times are tough and Hwang says the company is aiming for a single-digit percentage growth for its financial year ending May 31, 2020.
According to Hwang, the last time Sunshine registered a double-digit growth was about five years ago. The company’s growth has been slow since, holding on to a single-digit growth.
“The days of strong growth is unlikely to return so soon. We aim to register a single-digit percentage sales growth for 2020.
“The sales could remain flat but they won’t drop as food stuff and household products are essential domestic items.
“During the Chinese New Year and Hari Raya celebrations, the sales did not improve but did not dip either,” she says.
According to Hwang, the sale of food and household products generally weaken during festive holidays because families with higher disposable income tend to celebrate them overseas.
“Travel agencies will do brisk business during the festive holidays, while the retailers experience temporary dip in their sales,” she adds.
To ensure that Sunshine remains top of mind for consumers, Hwang says the company will do more promotions this year.
“We used to do only two promotions a year, but now, to be competitive we have to do more than five a year. Such promotions compromise our profit margins,” she notes.
However, there is a bright spot for the company as Hwang says Sunshine will focus more on expanding its overseas sales in Shanghai.
“We and our trading partners have a store in Hongqiao Perennial Bonded Exhibition and Trading Centre in Shanghai, located just seven minutes from the airport, 1km to the city’s central business district and 1.5km from its railway station.
“The store, which just started operations, showcases over 2,000 SKUS (stock-keeping units) from around 250 partners.
“Currently on board are some 120 Malaysian companies, as well as around 40 from Thailand and 30 from Indonesia. We strongly believe our presence in this exhibition centre will create awareness of Malaysian products and increase export business opportunities.
“We are committed to being there for at least one year. There are opportunities for local retailers in China to promote our products in Shanghai,” she says.
According to Hwang, the company plans to ship over 100 containers of locally made household or food products to Shanghai over a nine-month period.
“This is to give an idea on the kind of demand we are expecting from Shanghai,” she adds.
But Hwang says the Chinese market is not an easy one to penetrate.
“The customers in China pay attention to the certification of quality and the packaging of the product. Our customers are mainly wholesalers and retailers,” she says.