Enterprise
Vinsoon stronger after diversification
Najihah S 
Chow Kit Trade Centre will be completed by the end of 2019
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THE Vinsoon Group, which has been in business since 1996, has undergone several diversification exercises in order to grow.

The home-grown group was initially in the retail business of selling footwear under Hypershoe Corp Sdn Bhd. It has since branched out to include real estate and commercial building development under Pracland Sdn Bhd and New Paradise Sdn Bhd respectively.

“Before I started Hypershoe, I was working as a shoe salesperson for several years. With the knowledge that I picked up, I started my own shoe shop with my wife in Jalan Ipoh [Kuala Lumpur],” Vinsoon Group founder Datuk Michael Lim tells FocusM.

Hypershoe offers casual footwear and sports shoes. The shoes are made locally as well as imported from China and across the region. They are sold at medium and low prices, catering to families especially in the suburban and rural areas.


Stiff competition

The business, which was self-funded, faced stiff competition from bigger players. It was also a challenge for Lim to convince other retailers to place its products at their outlets.

“It was difficult but it was my interest to be in this business. So we just went on with it although it was hard. At that point, in 1996, most of our products were locally made. Eighty percent were local products and 20% were foreign products,” he says.

Lim is positive that CKTC will bring in further revenue to the Vinsoon Group

By the end of the second year of operations, Hypershoe had opened another outlet. Lim believes in keeping a lean operational structure with very little budget on marketing and promotions.

However, the company puts in a lot of effort to retain its customers and entice them to buy its shoes regularly by understanding their buying habits. The stores carry six shoe brands with prices ranging from RM39.90 to RM129. 90 each.

Things were looking up but Hypershoe experienced a setback in 2006 when customers’ buying sentiment was low.

“We could not manage the outlets, so we had to sell the ones that were in Pahang,” Lim recalls.

He says Hypershoe had to close down all of its outlets except for the one in Jalan Ipoh. There was also a need to revamp its product mix.


More outlets

Lim ensured that there was a good balance of locally-made as well as imported shoes sold at its stores.

“By 2006, 60% of our products were local and 40% were imported and now you can see that 50% are local and 50% imported,” Lim explains.

Hypershoe started expanding again with each store ranging from 1,600 sq ft to 5,000 sq ft.

By the end of last year, Hypershoe’s revenue reached almost RM20 mil and it has grown from a single independent shoe store to 40 stores with 200 employees. The company aims to open 60 more outlets by the end of next year.

With access to imported as well as local designs through the internet, consumers have grown to be more discerning and selective on their spending on footwear.

Apparel and footwear sales make up 28% of total online retail in Malaysia last year, according to business intelligence company Euromonitor.

Additionally, with initiatives from the Malaysian Footwear Association such as the Malaysia Footwear Design Competition, the standard of footwear designs rose tremendously as talents improve their shoe design skills.

It is also seen that the taste of consumers have moved slowly to the medium to high-end spectrum with events such as Branded Shoe Fair.

Conversely, with the implementation of the goods and services tax, buyers are more cautious on spending and prefer to purchase footwear only when there are discounts.


Moving towards real estate

Pracland Sdn Bhd was established as a property arm of the Vinsoon Group in 2010 and its first project was acquiring a 22,000 sq ft land and turning it into a manufacturing and storage space for SMEs.

Lim says he diversified into real estate due to a recommendation from a friend. The project, located at Sungai Kapar Indah Industrial Park, Kapar in Klang, was completed in 2014.

“Land business is something that will always be relevant. So we acquired the land and appointed a sub-contractor to build small factory facilities for SMEs. The project is a three-storey semi-detached factory and overall the building’s total size is 19,000 sq ft. We built it so that SMEs can rent it as a small manufacturing space, storage and packaging space at an affordable price.

“For this component of the company, we focus on practical property solutions for businesses and we will look for more projects in the future,” he adds.


Biggest project to date

The third division of Vinsoon’s business is also property-related business, parked under New Paradise, which has been in operations for two years. It is developing a new wholesale mall, Chow Kit Trade Centre (CKTC), which will sell mainly Malay products ranging from cosmetics, household products as well as traditional herbs.

“CKTC will be a wholesale mall where small businesses will be able to purchase the things they need under one room, in a comfortable space and at an affordable price. Even those who are starting out an online business can come here and shop. There will also be a CKTC website where online purchase can be done.

“Armed with specialised knowledge of the market through past projects, we developed an understanding of targeted wholesalers and investors and truly achieved what we set out to do.”

“We have been eager to modernise the area of Chow Kit as it has potential for business people and tourists alike. At the same time we will retain the traditional Asian feature that is what Chow Kit is known for,” Lim explains.


Largest Hypershoe outlet

Scheduled to be completed by the end of 2019, CKTC will have a net floor area of 34,650 sq ft. The centre has already seen 50% take-up rate from wholesalers.

CKTC comprises 254 lots with built-up areas ranging from 52-181 sq ft each and pricing starts from RM1,950 to RM7,800 per sq ft. The company is expecting full occupancy by December. Currently, CKTC is valued at RM156 mil.

The mall is projected to contribute 40% revenue to the Vinsoon Group.

Lim also reveals that the project has been in discussion for four years prior to the launch and its major tenant would be MK Curtain Group. Hypershoe will also be a one of the major tenant at the mall, making it the largest Hypershoe outlet in the country.

This article first appeared in Focus Malaysia Issue 246.