Singer Bangladesh expanding to cater to new generation of consumers
Singer has been operating in Bangladesh for 117 years and is growing at a healthy pace. Currently, the company is putting emphasis on brick-and-mortar sales as well as fast-expanding digital commerce in order to serve the current generations. Singer Bangladesh Ltd Managing Director & Chief Executive MHM Fairoz shares his company's plans on investment, expansion and digital customers during an interview with The Daily Star recently.
DS. What has been the key factor behind Singer's continuous success in Bangladesh for 117 years?
MHM Fairoz: Obviously, a brand needs to win the trust of consumers to survive in any market for 117 years. During this long journey, Singer brand started with marketing sewing machines and we have earned the trust. This trust factor among consumers across the segments in Bangladesh has helped us.
In addition to the quality of the product and services, another key factor behind this long and successful journey is that we kept changing our business model in line with the changing need of the consumers. Since everything is becoming digital, we also have gone for selling products online through our e-commerce site. So, this sort of effort actually helps us remain relevant to the consumers of Bangladesh and grow our business.
DS. Where do you see Singer Bangladesh in the next five years?
MHM Fairoz: We want to further improve the brand recognition and the strength that we have. Even though we have been successful so far, we are emphasising executing strategies to successfully cater to the future generations.
We are closely following the global market trends in our industry, especially, in line with Arcelik, the major shareholder of Singer Bangladesh.
Of course, we look at what is happening in Bangladesh too. The needs and purchasing behaviour of the new generations are changing. They prefer the convenience and are more reliant on service. We made a journey from a product-driven company towards a sales-oriented company. Alongside focusing on our sales, we want to become a more consumer-centric or consumer-driven company taking the mindset of our future customers into consideration and continue the business success.
DS. What is the current strength of Singer? What is your target in the coming years?
MHM Fairoz: We can't change the business model overnight. Currently, we have about 437 retail outlets, 1,200 dealers and a corporate sales division. The fourth channel we already have is our online store. With the changing consumer behaviour, we want to play a significant role in e-commerce.
Before the pandemic, we had almost 100 per cent growth in revenue and almost three times increase in our profitability within a period of five years. So, in terms of revenue, our minimum aim is to continue the same growth, year-on-year.
DS. The profitability and turnover of Singer were affected in 2020. How do you assess your business in 2021?
MHM Fairoz: Not only Singer Bangladesh, other industries like FMCG, automobiles and footwear were not able to continue their usual business due to the pandemic.
During the Eid-ul-Azha season in 2021, there had been lockdown and we were not able to open our retail outlets through which around 80 per cent of our revenue is generated. So, we lost almost Tk 270 crore in revenue during the third quarter of 2021.
But there was no job cut in Singer Bangladesh due to the pandemic because we believe that our employees are our bigger asset, and when things are right, our teams will bounce back to capitalise on opportunities.
DS. What strategic advantage Singer has got in Bangladesh since Arcelik took over?
MHM Fairoz: We believe Arcelik's taking over Singer Bangladesh was a perfect marriage. Before Arcelik took over, Singer was predominantly a company that is quite strong in sales.
Arcelik has about 40,000 employees and 28 production facilities in nine countries.
It covers almost 12 brands and has 30 research and development (R&D) and design centres. And it has 1,700 researchers and 3,000 international patent rights. So, because of the takeover, we are able to get that knowledge, R&D support or even in terms of quality.
Arcelik has separate quality labs. In terms of innovation with Arcelik, we are now in a position to develop our own models, designs and features that are more suitable for Bangladeshi consumers.
DS. There is a huge middle-class segment in Bangladesh and it is expanding. Researchers suggest that the middle-class tends to consume high-end products. How are you preparing for the next five to 10 years?
MHM Fairoz: With more disposable income, the middle-class wants to elevate their lifestyle. As a brand, we are quite strong in the mid-segment. The needs and requirements of consumers who are elevating to the premium segment are slightly different. They are more brand-conscious. They want more premium end products with many features and benefits. For this segment of consumers, we have many options in line.
At this moment, we have an Arcelik-owned brand Beko, which is a top brand in Europe and clearly the number one brand in the UK. And Arcelik also owns over 12 other brands. So, we always have the option to select other brands and offer the premium segment that is emerging in Bangladesh.
DS. What is the future investment plans of Singer and Arcelik in Bangladesh?
MHM Fairoz: We want to increase our local production in Bangladesh to 60-70 per cent from the present 52 per cent. If there are opportunities, we will produce more locally.
The factories that we have are okay to cater to the demand in the next two to three years. But as we move forward, we need to increase our production capacities.
The next thing is we are looking at the global trend. With the innovation, technology and R&D that Arcelik has, we believe that there is no one in Bangladesh that has that capability. We are going to bring that innovation and capability, using our local resources. So, we need investment and also need to expand our footprint.
Even though the business models are changing and online efforts are increasing, we still believe there are customers who would prefer to walk into retail stores. There are customers who want to go to dealers' stores to have a bargain and there are also corporate customers. So, with all these channels, we are in an expansion mode for which we need investment not only in production but also to improve our service. Our plan is to be the number one service provider in Bangladesh in the consumer durable category.
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