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Courts Asia Moves Its Chess Pieces Strategically
Corporate Digest | 09 November 2012
By: Louis Kent Lee
Articles (199) Profile

In a mall filled country like Singapore; it is difficult to say you’ve not seen the prominent logo of Courts Asia (Courts) before, because simply put, it appears to be in most malls we have in Singapore. The Electrical and Furniture retail giant commands the largest market share in Singapore and the second largest in Malaysia, with an estimated total store count of 70 stores, in which 13 of them are in Singapore.

Listed barely a month ago, Courts saw overwhelming demand for its initial public offering, which was 24.4 times subscribed. In an exclusive interview with Shares Investment, Courts’ chief executive officer, Terry O’Connor shared what he has in store for Courts in the foreseeable future.

The Smarter Way Of Renting
In line with its efforts to cater its products to more consumers in Singapore, Courts offers its own range of credit services and instalment plans. Interestingly, it also has a plan that is especially suitable for the many foreign workers that are here in Singapore for a contracted period of say one or two years.

“It might not make sense to a foreign worker in Singapore to shelve out the full amount for an expensive item like a television, which he or she will only be using for a year or so. It will make even lesser sense for them to take up heavy loans for such purchase. With Smart Rent, they can now have the option to “rent” the product, at a fee, whilst enjoying the full benefits of it,” said Connor.

Pumping Up its Online Presence
In view of how technology has changed the landscape of retail business, Courts has also been capitalising the power of technology, integrating it into its business. Its re-launched web store now boasts a wider range of products, and extra features are also notably distinguishable. The overall user experience has been redesigned to entail a brilliant shopping experience, at attractive prices offered by Courts.

“We have been investing in the online platforms for some time now, other than the website, we have about 77,000 fans on our facebook page,” Connor remarked proudly.

Expansion Plans In Singapore, Malaysia
Mentioned in its prospectus, Courts will be looking to expand its current store strength. It is hoping to increase its Malaysia store count by six stores per year, while it is still assessing suitable locations for new store potentials in the Singapore market.

When asked if the highly fragmented retail scene in Malaysia could be an impactful concern for Courts, Connor pointed out that the fragmented scene actually presents opportunities.
He shared that Courts’ market share has been growing in both Singapore (2012: 10%, 2010: 8.5%) and Malaysia (2012:7%, 2010:5.8%).

“The growth in Singapore was mainly due to Courts gaining market share over its competitors. In Malaysia however, it’s a different story, everyone’s market share has gone up because there’s been a shift in trade channels. You start seeing mainstream retailers moving out of KL to other parts of Malaysia and shifts from the independent trade channels to the organised trade channel. This move presents more retail opportunities for everyone in the market, where Courts will also be an obvious beneficiary of that,” explained Connor.

The Indonesia Plan
Connor also shared with us that due to the increasingly wealthy middle class in Indonesia, Courts plans to open its first megastore in east Jakarta, in early 2014.

“I think the consumers there will be able to see our megastores as something that’s special and more robust, as megastores are not common in Indonesia as of yet. At the same time, the megastores will also provide the patrons an out of town shopping experience, and our megastores is essentially our planned statement entry.

In order to establish a market presence in Indonesia, Courts’ intention is to launch Megastore formats which has retail areas exceeding 60,000 sq. ft. In addition, it is also currently in discussions with respect to other land parcels in Jakarta. It will also be offering consumer credit sales in Indonesia, and this will be a unique differentiation for Courts, which other traders don’t offer.

Come 2014, it will be interesting to see Courts implementing its megastore concept in Indonesia and we will be watching how well received it would be by the locals. Taking all things into consideration, it probably will.

Louis is a qualified accountant with the ACCA, and is the Research Editor at Shares Investment magazine.

Please click here for more information about this author.


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