The pandemic has hit businesses hard the world over. However, crises are also opportunities for transformation, not just to mitigate risk or restore what was, but to create an advantage in adversity by adjusting to new realities. In this issue, we meet four different businesses, each facing its own unique set of challenges. What they have in common is the indomitable will to innovate and transform to overcome the seemingly insurmountable challenges of the pandemic, to not just survive but reach greater heights in a postpandemic world.
Edmund Yuen, Managing Director,
Ideal Vision Integration Sdn Bhd
Like other businesses, Ideal Vision Integration Sdn Bhd (Ideal Vision) was affected by the Movement Control Order (MCO 1.0) announced in March 2020. Managing Director Edmund Yuen immediately set to work to take stock of the company’s position and work on contingency plans. First up, finances. Edmund expounds on the importance of cash flow management, stating that businesses should not wait until a crisis to manage cash flow. “Always know the facilities and grants available in the market,” he advises. “We made the right decision to apply for an overdraft facility with RHB Bank before the crisis struck,” he says. ‘Without it, we would have been in trouble.”
With cash reserves in place, Edmund was able to turn the Ideal Vision’s energies to the operational challenges faced by the company. Travel restrictions were curtailing their marketing and installation works, which required travel to marketing expos and to their customers’ sites across South East Asia (SEA), China and Taiwan. “The ball game changed,” says Edmund.
To overcome this challenge Ideal Vision appointed distributors and agents with offices in SEA, China and Taiwan. “It was a new way of working. We had to digitise our training materials and conduct training sessions for our distributors via Zoom, Microsoft Teams and Skype so that they can do the installation on our behalf,” says Edmund. All this work was done under lockdown during MCO 1.0.
This change in operations paid off with Ideal Vision increasing their sales. This also opened up new business opportunities for Ideal Vision as they became the distributor for a UK manufacturer that needed a representative in Malaysia. This has led to them supplying their systems to the UK. This distributorship approach is now a permanent part of Ideal Vision’s business model.
The crisis changed Ideal Vision in other ways. After some initial difficulty, the company is adapting to working from home and considering implementing workfrom- home for the long term. This will allow the company to expand without having to invest in additional office space. Going into 2021 and beyond, Edmund is confident. “MCO 2.0 in early 2021 did not impact us. We have made all the changes we needed to make. We know the trend, and we have established a plan. We just need to execute it.”
Moh Wei Ken, M Summit 191 Executive Hotel Suites, General Manager. Dato’ Albert Moh, Founder & Group Managing Director. Moh Wei Ren, Group Development Planning Manager
Dato’ Albert Moh, Founder & Group Managing Director,
M Summit Group
Despite the biggest business challenge of his lifetime, it never crossed the mind of Dato’ Albert Moh, Founder & Group Managing Director of M Summit Group, to lay off his staff. To manage cash flow, salaries were deferred not reduced, and everyone multi-tasked and chipped in where needed to get the group through the tough times.
Dato’ Albert’s staff proved to be his treasure, as they bloomed under his leadership and that of his sons Moh Wei Ren and Moh Wei Ken into idea generators, providing the M Summit Group with an unlimited supply of ideas. The ideas from the newly created Innovation Unit resulted in new packages and marketing plans that helped the group alleviate the crippling impact of the crisis on its hotel operations and achieve sales in a sluggish property market. The unit’s ideas were groundbreaking in both the hotel and property development business.
The hotel business looked beyond tourists to identify local residents suffering from cabin fever as new customers. They offered dine-in packages in their suites in collaboration with restaurants, hourly rentals for people to chill-out in their suites, collaborated with neighbouring theme park The Top for a Stay-and- Play package, and converted some of their suites into co-working and meeting spaces. “I would say we are the trendsetters for this kind of innovative ideas,” says Wei Ken who heads the hotel business.
In property development, the group introduced the RISE (Relief, Incentive, Stimulus, Excitement) programme where M Summit Group subsidizes the buyer’s bank instalment payments for 40 months. “With this programme, people don’t have to worry about bank instalments despite the current economic uncertainties,” says Wei Ren who heads the property development division. The RISE programme helped the group sell 10% of their properties, bringing in much-needed cash flow to help the group ride out the crisis.
In dealing with the pandemic, this brick and mortar organisation also had to embrace digitalisation. The group is doing more digital marketing and the property division launched virtual showrooms, allowing customers to take a tour of their units from the comfort and safety of their own homes.
Although business is down compared to pre-pandemic days, Dato’ Albert believes the worst is over. With vaccines being rolled out, Dato’ Albert is now looking beyond the pandemic. As such, the Group is expanding the hotel with a new wing and a first-in- Penang bottomless swimming pool in anticipation of an explosion in postpandemic demand for travel. This is only the beginning of the Group’s plans as there are new property projects to be launched and also a healthcare division to grow. Powered by the ideas of its Innovation Unit, the Group can only continue to break new ground and reach greater heights.
Jack Teo, Managing Director,
Topmix Resources Sdn Bhd
“We have been waiting for this opportunity for a long time,” says Jack Teo, Managing Director of Topmix Resources Sdn Bhd (Topmix). Unlike other businesses, Topmix welcomed the crisis, seeing in it the opportunity to gain market share and grow their business as their competitors laboured under cash flow constraints caused by lax credit extension.
With such clearly articulated vision and goals, solid financial records, and close relationship with their bankers, including RHB Bank, Topmix was able to get quick approval for the working capital facilities they needed for this massive expansion drive. Topmix also uses its RHB Multi Currency Account to hedge its US dollar exposure to reduce inventory cost. “Our Relationship Manager updates us on the rates daily, and helps us plan our US dollar purchases,” explains Jack.
With financial support from their banks, Topmix put their plans into action. Topmix came up with a new catalogue and increased its inventory during the MCO 1.0. They also started aggressively doing e-marketing, utilising their customer database to communicate their new collection and new designs to their customers. “Once the MCO 1.0 was over, our new catalogue was ready to go, we were able to launch our new products very quickly and were able to gain market share,” Jack explains.
However, the company was not immune to the impact of lockdown. “Last year our business had to innovate and we hired a lot of e-marketing talent,”says Jack, as the lockdown affected their traditional marketing channels. “We hired the expertise we needed,” says Jack simply, undaunted by the big investment in human capital required to shift to this new way of marketing. “We should not be afraid to spend money. Instead, we should spend money correctly and seize the opportunity to expand our business,” he says. And Topmix has certainly spent its money very wisely. Sales grew 15% in 2020 in the middle of the pandemic, and the company has grown 14 fold from 5 staff in 2011 to 70 staff currently.
Topmix is now looking towards its next phase of growth. It plans to continue to increase market share and is turning its attention overseas. “We are using e-marketing to penetrate the international market. In fact, e-marketing is a more effective way for us to expand internationally,” says Jack. Topmix continues to be willing to spend on growth- venturing into manufacturing in collaboration with a local manufacturer to increase its profit margin and secure its supply chain. For now, everything is going according to plan, and the company looks to reap the rewards of its bold expansion in the coming years.
Mohammad Munzir Aminuddin, Director of Sales and Marketing,
Siti Khadijah Apparel Sdn Bhd
When the MCO 1.0 was announced, Siti Khadijah Apparel Sdn Bhd (SKA) immediately faced a potential loss of about 70% of their income, which came from their boutiques. “Our cash flow was not very good. No sales at boutiques meant no cash. We could not afford to pay our staff,” confesses Mohammad Munzir Aminuddin, Director of Sales and Marketing of SKA. How did this beloved local brand turn this situation around?
Fortunately, SKA had term loans and overdraft facilities with RHB Bank which helped with cash flow. SKA also already had e-commerce infrastructure in place, with a website, a Whatsapp service and marketplaces on Shopee and Lazada. They were also active on social media. “We made the daring decision to bring all the bestselling products back from our boutiques to our warehouse so that we can put all the stock available online,” Munzir explains.
Demand for their products did shift to their online channels, which turned out to be a double-edged sword. Their infrastructure could not cope with the influx of online orders. “We were forced to change everything fast,” says Munzir on SKA’s overtaxed e-commerce infrastructure and fulfilment system. In the coming weeks, the SKA headquarters was turned into a fulfilment centre with every employee in the Klang Valley re-deployed to help out with fulfilment and IT staff tasked to look into improving the fulfilment process. Throughout the chaos, SKA’s RHB Reflex facility helped to smooth payment processes by expediting business payment processes via bulk payment.
While staff in the Klang Valley were occupied fulfilling online orders, staff outside the Klang Valley had no work. What could SKA do for them? “We came up with this brilliant idea,” Munzir shares proudly. “We offered these staff an opportunity to become our dropship agents. We gave them products to sell at a highly discounted price.” It turned out to be a win-win situation for all. SKA was able to convert stock into muchneeded cash to continue running the business without taxing their existing e-commerce infrastructure. The staff received commissions that were in some cases higher than their salaries, and customers got a good deal. “And we all survived until today,” quips Munzir wryly.
What’s next for SKA? Retail stores still remain a big part of their business but are vulnerable to lockdown as shown in the recent MCO 2.0. As such, SKA is no longer complacent with its e-commerce platform. “We are on a hiring spree for the e-commerce and fulfilment departments,” says Munzir. With steps taken to mitigate the inherent vulnerabilities of the business, SKA is in for brighter days ahead whatever the challenges that may come forth.
Cash is king
Cash reserves are key to withstand a crisis. Other than building cash reserves through savings, businesses can cultivate close relationships with their bankers to keep up-to-date on the loan facilities that are available and to get quick approvals to take advantage of opportunities in the market. RHB Bank has many innovative financing solutions available to our SME customers. Speak to your Relationship Manager to find out more.
Hold on to your staff
All our featured businesses strived to hold on to their staff, with some increasing headcount to acquire new expertise, despite the crisis. A workforce aligned with the company’s goals and invested in the company’s survival is an invaluable asset as a business strives to pivot and transform to survive a crisis, and form the foundation for the business’s future growth.
Let go of the old
Our featured businesses immediately let go of old ways of doing business that are no longer working. Instead, they moved fast to discover and meet the new needs that arose in the market.
Engage with stakeholders for support
All four businesses were able to inspire confidence in their stakeholders and gain their support to help them through the crisis. Other than employees, suppliers and shareholders, banks are one of the key stakeholders that can support a business through a crisis. RHB Bank is proud to have been able to support our four customers through the pandemic and share their success stories with you in this issue of MERGE.
Beyond our SME loan facilities, RHB Joy@Work recognises the importance of employees to businesses and helps businesses manage employee welfare with a comprehensive banking solution that offers employees the privilege of enjoying attractive rates, savings and discounts.
We also offer SME e-solutions through RHB Reflex Premium Plus to help businesses manage and automate the tedious aspects of their financial, sales, accounting, people management and other processes. This frees up precious resources to focus on growing the business.
If you are looking for a banking partner that will walk with you through thick and thin, supporting your business to transcend crises to achieve new heights, talk to your RHB Relationship Manager today.
1 Eminent Creative Sdn Bhd, Interview Audio Recordings – Ideal Vision Integration Sdn Bhd, 9 February 2021.
2 Eminent Creative Sdn Bhd, Interview Audio Recordings – M Summit Group, 24 February 2021.
3 Eminent Creative Sdn Bhd, Interview Audio Recordings – Topmix Resources Sdn Bhd, 26 February 2021.
4 Eminent Creative Sdn Bhd, Interview Audio Recordings — Siti Khadijah Apparel Sdn Bhd, 2 March 2021.