Struggling In OZ Harvey Norman Chases 19 Per Cent Growth In Malaysia
Harvey Norman, whose sales went backward by 4 per cent in Australia during the last quarter, is now looking for growth in Malaysia according to a report in the Malaysian publication, The Star.
They claim that the mass retailer, who has struggled this year in Australia, is looking for at least a 19 per cent growth in revenue for its Malaysian operations, and 25 per cent of the consumer electronics and appliance market in Malaysia, and that the company will embark on a two-pronged strategy that will allow it to have a stronger foothold in the country’s retail business.
Harvey Norman operates in Malaysia under Elitetrax Marketing Sdn Bhd, which in turn is owned by a seperate company, Pertama Holdings, which is an investment holding company, owned by Harvey Norman Ossia (Asia) Pte Ltd.
Harvey Norman Managing Director in Malaysia, Angelo Augustus, said this strategy involved enhancing the company’s brand name and expanding its retail outlets.
“We are now heavily building our brand name through various mass media which we hope will boost our presence and revenue growth. The company has been experiencing double-digit growth in revenue over the last few years and we hope our branding initiative will further strengthen our revenue stream as well as create greater awareness in the Harvey Norman brand.”
He said the retailer planned to spend about $4M marketing its brand and products.
“Together with new stores in the pipeline, we hope to grow our revenue by at least 19 per cent selling European brands like Electrolux and Bosch, as well as flat panel TVs incorporating 3-D and IPTV enabled technology.
The Star reported that flat panel TVs currently contribute close to 30 per cent of the company’s Malaysian revenue. The company, which started operations in 2003, presently has six retail stores nationwide and plans to have a total of 20 over the next five years.
According to Augustus, Harvey Norman is looking at opening two more stores this year. The cost of fitout of each store will be around $2.5 Million, excluding stock. Harvey Norman’s current store size in Malaysia ranges from 30,000 sq ft to 70,000 sq ft. At the moment, the largest is the Ikano Power Centre with a built-up of about 70,000 sq ft.
Market share-wise, he added, the company had about 12 per cent to 13 per cent of the retail market and hoped to garner 25 per cent before 2015.