Singer gains from new products, partners
Singer Thailand Plc has grown from a distributor of sewing machines established more than a century ago to a diversified provider of appliances, vending machines and related services. CEO Boonyong Tansakul discusses the company's strategy and outlook.
Please explain Singer's history and business model.
Boonyong: Singer must continuously look forward and not rest on its laurels
Singer has been in Thailand for 126 years, beginning with sewing machines and home appliances to the point where we have products for every home use. Six years ago we began expanding into commercial products, primarily through vending machines for petrol, mobile airtime and water, freezers and beverage coolers, and coin-operated washing machines. Today we have more than 80,000 vending machines in 217 locations, and 1,000 mobile sales vehicles.
Could you elaborate on the commercial products?
We introduced airtime vending machines five years ago, allowing consumers to top up their mobile phones, for as little as 10 baht a time, from all three local operators from a single machine. We now have over 50,000 machines throughout Thailand and we aim to sell 8,000 additional units per year. Our 7,000 petrol vending machines allow users to fill up their motorcycles for less than 100 baht per time.
Our water vending machines allow users to bring their own bottles and purchase water at one baht per litre. Finally we have washing machines and slush machines. The common feature of all these products is that they allow our customers to save money by doing things themselves.
Why did Singer shift its business model towards commercial products?
We have to continuously look forward and not rest on our laurels. We saw the market opportunities in the commercial product segment and we did want to remain completely reliant on the home appliance instalment payment model for consumers. Today, 60% of our portfolio is commercially related and we hope that in the future this portion will grow to 80%.
What other products and services does Singer plan to offer in the future?
When the hot season is over we will introduce several new products, starting with beverage coolers. In the market each fast-moving consumer goods brand promotes its own coolers, which results in a shop owner having multiple coolers. Singer will offer a one-product solution that will reduce a shop's electricity costs dramatically.
The next product will be our own branded CCTV to help our customers with security and safety. Since there is a no key market leader in this segment, we believe that Singer's brand and reputation will differentiate us. Finally, we also see opportunities in the air-conditioner market as the penetration rate is very low in Thailand. As well, we will launch a second petrol vending machine that is more efficient and more visually appealing.
Singer recently had a change in its shareholding structure. Please explain the impact and potential synergies with the new partners.
We wanted to have a strategic partner that would add value and help us expand. With Jaymart and Sahapat Group now owning 24.99% and 7% respectively of Singer Thailand shares, we think the company is well positioned to continue its expansion throughout Thailand and the region.
With Jaymart our businesses complement each other in terms of target customers and locations. Jaymart is dominant in mobile phone sales and debt collection, has a growing property business and its customer base is located primarily in Bangkok whereas ours is upcountry. Thus we will use both of our existing locations to cross sell our products. For example, Jaymart will install its kiosks at our 217 locations to sell mobile phones and accessories and we will install our airtime vending machines in 200 Jaymart locations.
In addition, Singer has operations in Laos and Cambodia while Jaymart has locations in Myanmar. Thus together we are positioned in the three fastest-growing nations in the region and we will look for opportunities to utilise our networks in these countries. We will be able to expand our businesses further without high capital expenditures as we can utilise each other's strengths and assets.
What impact has high household debt had on your business?
The current economic conditions have affected our consumer business as the decline of agricultural prices such as rice and rubber has affected all parts of the economy, not just farmers but hotels and restaurants as well. Our non-performing loans have increased from 4% to 6.5%, but now with Jaymart as a strategic partner we can utilise its debt collection service, which has been very beneficial to Singer.
Where do you see Singer in five years?
We are continually looking forward in terms of products and services. We will look for new products from manufacturers that lack the marketing and sales reach that Singer has and will use our reputable brand name and network to offer these to our clients. In five years we expect Singer to be in a strong shape with our synergies with Jaymart, with regional expansion and more new products, and we will continue to look for new opportunities.
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