The group is currently on track to meet their 2022 store launch target as they plan to capture opportunities amid recovery in consumer spending

by AZALEA AZUAR / pic source: senheng.com.my

SENHENG New Retail Bhd has allocated a total capital expenditure (capex) of RM74.3 million this year to upgrade retail stores, enhance warehousing and its distribution network.

It is also positive on raising market share in Malaysia’s consumer electronics retail sector

Senheng executive chairman Lim Kim Heng (picture) said the group is currently on track to meet their 2022 store launch target as they plan to capture opportunities amid recovery in consumer spending. They expect market share from 13% in 2020 to 30% in 2025.

“The latest expansions included our three refreshed retail brands, Grand senQ in Paradigm Mall Johor Baru, senQ Elite in Pavilion Bukit Jalil and Grand Senheng Elite in SS2, Petaling Jaya.

“These represent our largest and most modern stores to date, providing a comprehensive range of consumer electronics to discerning customers,” he said during the group’s AGM recently.

Moreover, Lim is also optimistic that the ongoing retail store upgrades and expansions will also complement Senheng’s seamless integration of personalised digital marketing initiatives, e-commerce, Senheng app ecosystem, as well as efficient logistics.

In turn, these will create highly satisfying omnichannel shopping experiences which makes them stand out from other competitors in the market.

Out of the total capex, RM49 million will be allocated to launch and upgrade 21 stores which represents one-third of the group’s total 61 outlets planned between 2022 to 2024.

Compared to its existing Senheng and senQ stores, the group’s latest store formats on average fetch 30% to 50% higher per-store sales.

Moreover, the balance from the capex will be used to acquire a 1.17ha of land in Bandar Bukit Raja, Klang in Selangor for the future use of expansion, and upgrading warehouse and distribution network.

The group is also building up capacity and increasing automation to meet the demands of its retail stores and e-commerce deliveries which will raise the robustness of its warehousing and distribution network.

In 2020, Senheng began its central distribution centre operations in Bandar Bukit Raja which measures a total of 280,000 sq ft. This makes it the biggest warehouse distribution facility to date.

It not only supports optimal inventory replenishment of stores nationwide but also the efficiency of e-commerce deliveries and in-store pick up orders.

“As a technology-driven organisation, we continuously adopt the latest technology solutions, among these are artificial intelligence (AI)-powered marketing automation, conversational commerce, e-commerce automation and mobile app technology.

“All these allow operational efficiency in terms of handling of service incidents, while in marketing, this calls for machine learning and automated personalised communication that result in enhanced customer experience,” he added.

The group also aims to hit a 13% market share by 2025 and it forecasted an increase of both new membership and renewals.

Despite the global inflation pressures, Lim does not think it has an impact on its customers.

“For the last 10 years, our customer base has been more towards the middle 40% income group but on the other hand, we do arrange some multiple payment modes.

“If they run out of cash, but they still need the electronics, we should classify it as an essential product instead of a luxury product,” he said.

Senheng not only focuses on improving its businesses through expansion but it is also fully leveraging on their online and social media platforms by making use of its customer data platform (CDP).

Its head of digital marketing June Tai explained that they became very bold when they adopted digitisation and used AI to reach out to their potential customers.

“We are happy and privileged to be given the opportunity to work very closely with the key giants which are Google Inc and Facebook Inc (now known as Meta Platforms Inc).

“So besides that, we also work with technology solutions providers on CDP where we launched our data driven marketing solutions,” she said.

Furthermore, the group also used a conversational commerce approach where they engage with a customer very aggressively 24/7.

Senheng’s capex will be mainly funded through its IPO proceeds, internally-generated funds as well as bank borrowings.