Image credit: artwright.net
KUALA LUMPUR: Office furniture manufacturer AHB Holdings Bhd is shifting from conventional stores concept to digitise a good part of the business to serve the work-from-home (WFH) market and small and medium enterprise (SME) offices segment.
Managing director and chief executive officer Yong Yoke Keong said AHB saw addressing changing customer habits as well as the growing demand for WFH segment as the way forward as traditional store concepts had a higher cost structure.
"The WFH segment is currently still small for AHB. As a company that has traditionally served the large offices, AHB is looking to grow this segment, and we are targeting this to contribute about 20 per cent to our revenue in the next three years.
"AHB is looking to digitise a good part of the business to serve the WFH market as well as a similar market segment. Within these segments, there are sub-segments of best prices and value and premium design and quality. AHB will attend to the later segment as a brand positioning strategy," Yong told the New Straits Times.
AHB will be focused on product offerings, research and development (R&D), information technology (IT) and digital e-commerce platforms with all its resources, and the investment that it can afford.
"As at today, AHB has zero bank borrowings, and will wisely, carefully and aaggressively invest in product offerings, R&D, IT and digital e-commerce platforms. AHB new digital e-commerce will roll out within 2021," said Yong.
He said AHB was competing in a niche premium market segment and the strategy was to continue to be in the segment.
There were much premium office spaces around Malaysia for at least three years, and this availability of spaces would create an active market for AHB, he added.
"AHB has introduce many new products, and these will address the WFH, SME, and the large corporate office landscapes who seek premium solutions that are reasonably priced.
"AHB has a very competitive cost structure and while the market demands slightly different requirements, the game play is the same. AHB will engage the new normal, which is digital logistics and information technology," Yong said.
On future trends in Malaysia for ready-to-assemble (RTA) furniture and how AHB was capitalising on this, Yong said there were good opportunities in Malaysia and for the region in RTA furniture.
"However, the RTA game is one for the original equipment manufacturer (OEM) who supplies in volume without brand name for customers to brand for themselves.
"I believe, as a strategy, the RTA factories or companies should avoid brand play, and the brand guys should avoid owning the RTA factories. Furniture is not a high-technology game. Hence RTA is for manufacturing excellence, with high-tech production or low-cost production systems. Either ways, it is not for market focus or for brand image," he added.
Yong stressed that Malaysia should focus on high-tech production because new players in low-cost labor countries are already in the game.
He said AHB was not into RTA directly, in the general sense of the business.
However, the company has introduced new products which requires mobility and flexibility to address the new working trends.
On the impact of Covid-19 on the customised furniture market in Malaysia and how AHB would remain competitive, Yong said it had introduced novel products to address the spread of Covid-19 in the workplace.
This included many concepts patented in Malaysia, with international patents pending.
For the year ending September 2021, AHB targets to install at least 30,000 furniture workstations with the Artwright patented Covid Protection Screen series.
Yong said the company was well positioned to grow at double-digit rate.
"I think AHB will be moving ahead with hybrid technology power. We have new products, an experienced team and resources.
"However, we have always been too cautious since being hit by the Asian Financial Crisis 1997, and may pull the brakes when additional expenses or investments look a bit risky, and may affect AHB growth rates, but a reasonable growth rate is quite assured for AHB.
"The economic and pandemic outlooks have been taken into account in our growth, and opportunities abound and AHB is well positioned. We have patented niche products to distribute worldwide and wide range of internationally sourced products for local distribution," he said.
Source: https://www.nst.com.my/business/2020/11/640643/ahb-shifts-towards-digitising-roll-out-e-commerce-platform-2021