Success of the LIONMAS Kingdom

Building a Business Empire From Scratch

Lionmas Furnishers (M) Sdn Bhd commenced its operations in Bandar Baru Uda, Johor Bahru in 1993 retailing household electrical appliances and furniture. From a humble beginning with a small work force, it has grown into a formidable multi-chain company with 35 retail outlets spanning across its home state of Johor and has 250 staff under its employment. Started out with a 1,000 sq ft electrical store, Lionmas now owns a head office and factory warehouse measuring 20,000 sq ft in Masai, Johor.

Chain Stores in Shopping Malls

As the largest home appliances retail chains in Johor, Lionmas outlets are widely dispersed in Johor Bahru and surrounds going as far as Gelang Patah, Kulai and Kota Tinggi to a wider geographical spread of Johor including Simpang Renggam, Kluang, Batu Pahat, Parit Raja, Muar, Segamat and Yong Peng. As the company continues to expand and flourish, more recent expansions have extended the company’s reach into the states of Melaka, Seremban and Kuala Lumpur. In 2016, four more outlets are slated to open in the hypermarkets of Plentong, Johor Bahru, Pontian, Kuala Lumpur and Melaka, bringing the total outlets to 39.

Lionmas has embarked on a venture of opening outlets in shopping malls or hypermarkets and the undertaking has met with considerable success. Its Chief Executive Office, Mr Gan Cheng Swee, explains that opening a business at a large shopping mall with premier location enjoys the benefits of drawing large crowd of shoppers and gaining more market exposure, among others. There are plans for further outlet expansion and the opening of outlets in shopping centres will continue to be his preferred course of action.

Despite an adverse market situation, the implementation GST, a weak Ringgit performance and other disadvantaged factors, the company achieved more than 23% earnings growth, reaching a record RM100 million Ringgit sales for the fiscal year 2015. So what are the ingredients for its success?

Perseverance and Persistence

Mr Gan, CEO of Lionmas, shares that the electrical appliances business is a challenging undertaking and many of the past top 10s have gone bust. Electrical goods are common necessities with a lot of varieties and there are many exclusive product brands with fixed prices. With price variations ranging from 5% to 10%, the profit margin is not very high. Hence, it takes effort and time to reap the bottom rewards. Nonetheless, Mr Gan has exercised perseverance to achieve success.

Systematic Management

The principal business of Lionmas involves importing, wholesaling and retailing of a diverse range of goods including home electrical appliances, furniture, furnishing and other home living products. With a diverse product profile, the need for systematic management is as important in a small business as it is in a large one. Mr Gan started the implementation of a comprehensive computerized management and operational system for the company as early as the 90s. Now the information technology framework with a fully computerised online Enterprise Resource Planning system is in place which leads to improved efficiency and further enhances the company image.

Innovative Operational Model

Another contributing factor for success is the adoption of an innovative business model that includes prudence and caution in product selection, zero interest-rate policy and credit card instalment payment, among others.

A well-designed membership system and loyalty programme, coupled with the delivery of responsive and prompt customer services contributes to a strong loyal customer base. The company also provides a credit card Easy Payment Scheme that offers interest-free instalment payments of up to 60 months which is unique to Lionmas.

An Extended Warranty Coverage is also available under the company’s Exclusive Care Product Services which provides an extended warranty of up to five years for the product purchased in store with the coverage starting after the expiry date of the original manufacturer warranty.

Customers and Employees Satisfaction

Lionmas value their customers as assets by being responsive to their needs and wishes. The company as a team is committed to delivering quality services and ensuring continuous improvement in the standards of services provided. It also aims to offer more diverse product choices with competitive prices as well as prompt delivery and effective after-sales services.

By the same token, employees are valuable assets in a company and Mr Gan seeks to facilitate a good working relationship with his employees based on mutual respect and understanding. When a rapport has been built and when the employees know the company’s vision and goal, they will want to work alongside the team to achieve the set targets. Employees function as a team and a big family. If some team members march to the beat of a completely different drum regardless of company norms and expectations, there will be chaos.

At Lionmas, employees are appreciated for their hard work and contributions. Good employees are praised or rewarded for their achievements while bad staff are disciplined. Staff training opportunities are provided for employees to gain new skills. Hence, it is little wonder that of the 250 employees, more half of them are loyal employees who have been through thick and thin together with the company.

Strategic Visionary Foresight

To Mr Gan, there is bound to be competition in the business world but any competition has to be fair, no scheming and deceit. Competition is good for growth as it forces firms to innovate as inefficient firms are wiped out. His plan is to open 3 to 4 new outlets each year as more outlets mean increased volumes so he is able to adjust pricing to stay competitive.

He attributed the successful expansion of outlets to the support of Lionmas faithful suppliers. However, appropriate business management and strategy are also contributing factors. With an increase in volume it leads to efficient cost control which is important for business success.