KUALA LUMPUR (Dec 16): Local furniture players, many of whom are lamenting that they are having a tough year with most experiencing a drop in domestic sales, are keeping an optimistic outlook for next year.
Soft consumer sentiment, the reintroduction of the sales and service tax, a high base effect following the removal of the 6% goods and services tax last year, and more spending required to grab consumers’ attention — these were among the reasons for the challenging year, according to those who spoke to The Edge Financial Daily at the Malaysian Furniture & Furnishing Fair 2019 last Friday.
“This year is tough, but it was expected. This is because of the high base effect from last year due to the three-month tax holidays as well as consumers being cautious with their spending due to the weak economy,” said mattress and bedding seller LSK Mattress Marketing Sdn Bhd’s team leader, Billy Goi.
Fierce competition has also weighed on sales, Goi said, with many players throwing prices to gain more sales in a tough environment. “This year, we’ve been busy defending our market share. Next year, we will have a more aggressive strategy to increase sales following the expansion of our production line,” he added.
Crown Furniture Trading Sdn Bhd executive director, KK Ong shared that his company has had to do a lot more to stand out from the crowd this year, such as expanding its advertising channel to the social media space as well as doing more sales campaigns.
The company also participated in more exhibitions this year. In the Klang Valley alone, it has joined about 40 exhibitions this year, compared to 30 last year. But with that, the cost of running the business has also risen substantially.
“This year is terrible. There have been too many exhibitions while customers are not rushing [to purchase]. It is a big problem to us. Previously, we got RM100,000 of sales in each exhibition. Now, it takes four exhibitions to get us that same amount of sales. On average, our sales from exhibitions have dropped 30% year-on-year,” Ong said.
Nevertheless, he said there are some signs of recovery and he is hopeful that 2020 will be a better year.
“We are targeting a 20% increase in sales next year as starting from a month ago, with the introduction of our Kitchen 360 service, we are providing full-fledged services, including renovation, to customers. This will allow us to grab more sales, as opposed to just solely sell furniture,” said Ong.
The company, which he said has an annual turnover of RM30 million, also plans to cut operating cost by reducing the number of exhibitions it participates in, or by joining in a smaller scale next year.
The three-day Malaysian Furniture & Furnishing Fair 2019, held at the Kuala Lumpur Convention Centre here, ended yesterday. Over 120 exhibitors showcased furniture, furnishings, as well as electrical and home appliances.
This article first appeared in The Edge Financial Daily, on Dec 16, 2019.