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Growing at a steady pace
NEWBIES set ambitious targets to conquer market share when they enter a market by opening a large number of outlets, often under an aggressive timeframe. Not so for Yue Hwa Chinese Products. The retailer from Hong Kong, which specialises in Chinese goods, plots a prudent strategy to yield steady profits. Nothing too go-go for the Yu family which controls privately owned Yue Hwa Holdings Ltd, the parent company of Yue Hwa Chinese Products.
Yu Pang Chun, director and general manager of Yue Hwa Chinese Products, and a member of the second generation Yu family to be involved in the business, says: "We are not too particular about market share, unlike some new entrants which want to saturate the market early on. We prefer positive returns for the company, shareholders and colleagues."
It also explains why it has expanded at a steady pace since it set foot in Singapore. The first store, the Yue Hwa flagship emporium housed in a conservation building at Eu Tong Sen Street in Chinatown, welcomed customers in 1996. Over a 14-year period between 2000 and 2014, it opened only three stores - at Junction 10 in Choa Chu Kang, Centrepoint on Orchard Road, and Jurong Point. Yue Hwa had earlier shuttered the Junction 10 and Centrepoint stores due to poor traffic and in the case of Centrepoint, the mall also underwent a major renovation. The Jurong Point store was opened in 2008.
This year, which incidentally is Yue Hwa's 20th in Singapore, has seen a sharp pick-up in pace. Two new stores opened in rapid succession - one at Heartland Mall in Kovan in March - and last month, a store in Eastpoint mall in Simei. "A big year for us," observes Mr Yu in a video conference interview from his office at Yue Hwa's flagship store in Jordan, Kowloon.
The Chinatown store, sitting at the corner of bustling Eu Tong Sen Street and Upper Cross Street, is a full-fledged store which carries a wide range of products. Chinese medicine, apparel, general merchandise, furniture, cosmetics, fine art and jewellery, food, wine and tea are housed over six floors of the restored building. The other three stores at Jurong Point, Heartland Mall and Eastpoint are speciality outlets, carrying mostly medicine and food products.
Yue Hwa bought the Chinatown conservation building, which was once occupied by the Great Southern Hotel, for over S$10 million from Lum Chang Holdings in 1993. Together with the building's acquisition and restoration, Yue Hwa spent a total of S$25 million to establish its first emporium in Singapore. For its conservation and restoration work, Yue Hwa Building won URA's Architectural Heritage Award in 1997.
Staying put in Singapore
But the bustle after the Chinatown store's opening was short-lived. Recalls Mr Yu: "We soft opened in July 1996, and officially opened in October. We did well in our first year. But the Asian financial crisis hit us in 1997/98 and this was followed by construction of the Chinatown MRT station which took about five years to complete. During this time, Yue Hwa Building was surrounded by hoardings. Yue Hwa was in a maze, customers could not find our entrance. It was at a standstill, we had zero business and lost millions of dollars of business during this period."
Mr Yu, who played a key role during the building's acquisition and in the run-up to the store's opening - he stayed in Singapore for six months during that period - reveals: "At one stage, we contemplated closing the store for a while but decided against it. We wanted to keep the staff."
Business was so bad that a Singapore newspaper even asked if the store was closing. Mr Yu flew to Singapore to speak to the journalist, giving the assurance that Yue Hwa was staying put. "We don't want to come in, then pull out at the first setback,'" he pointed out. Persevered Yue Hwa did. After Chinatown MRT station opened in 2003 and the hoardings removed, Yue Hwa's business picked up gradually. Its branding was also rebuilt, management and operations systems were streamlined. The hiatus behind it, Yue Hwa turned its attention to expansion.
Growing the business
Yue Hwa is now working to grow its e-commerce, source for more quality products and professionalise its staff, especially in light of the tight labour situation in Singapore. Even the red coloured logo has been tweaked to show a graduation of tone to emphasise a progressive company, instead of the previous single red tone. The online store, which Mr Yu expects to be full-fledged by early next year, is expected to contribute 10 per cent of total revenues - "we don't want to be over-aggressive".
On the cards too is the hunt for commercial space to accommodate its growing number of employees which is currently close to 70. Yue Hwa also owns a warehouse in Singapore. The Singapore business is experiencing a steady increase in contribution to the group's revenue. Expansion into the region - Malaysia, Thailand and Indonesia (where he was born) is also being considered, says Mr Yu, 58, the youngest of eight siblings. An elder brother, Yu Kwok Chun, is the chairman and managing director of the holding company, and a sister, Yu Siu Chun is a director.
Their father, Yu Bik Yau and his brother Yu Yee Ching founded Yue Hwa in Hong Kong, after they left Indonesia in the 1950s. From a humble 1,000-square-foot store in Central in 1959, Yue Hwa now boasts 16 stores in Hong Kong, including the Jordan flagship store. Most of them are located in Kowloon.
Yue Hwa Chinese Products is one of three divisions under parent company Yue Hwa Holdings. The other divisions are: property investments and development in Hong Kong and Canada, and financial investments. Mr Yu was roped into the family business in 1981 by his father who put him in charge of the financial and IT operations of a listed company that they had acquired. He was then working as an auditor in an accounting firm. The listed company was subsequently disposed and Mr Yu went to work at the parent company.
Third-generation family members are active in the business. Daughter Jessica is the business development manager of the Singapore business and, like her father, trained as an accountant in Australia and also practised as an auditor.
Nephew Jacob is a director, managing the Singapore business. Prior to joining Yue Hwa, Jacob was project manager for IBM. Jacob's father is Yu Choy Chun, who is a director as well as deputy general manager at the group level. Another nephew, Andrew (son of chairman Yu Kwok Chun), is also a director based in Hong Kong. Andrew used to work with GIC. Jason Barlian, son of another business partner, is part of the Singapore team, working as its assistant marketing manager.
Surviving the cut-throat retail industry
Over the decades in Hong Kong's cut-throat retail industry, Yue Hwa has stayed ahead and introduced new concepts. For instance, it was the first department store to introduce the open-to-buy concept in Hong Kong, after studying it in Japan.
How does Yue Hwa sustain its growth, at a time when the Chinese goods that it retails are so easily accessible, unlike the early days when such goods were difficult to source by the ordinary consumer? "We have a niche market. Even if you can find an equivalent item on your own, Yue Hwa's item is export quality. We would have done our due diligence, screened the product before we put them on our shelves,'" explains Mr Yu about the appeal of Yue Hwa. "We are also price sensitive, and complements the other retailers in Singapore and Hong Kong,"' he adds. These days, Mr Yu does not need to come to Singapore to reassure that Yue Hwa is not pulling out. Yue Hwa may have had a somewhat shaky start but it is definitely on a steady track now.