By RACHAEL KAM
HAI-O Enterprise Bhd's subsidiary Hai-O Marketing Sdn Bhd expects to penetrate widely the Indonesian market within two years by setting up retail outlets and marketing offices.
Group managing director Tan Kai Hee said bumiputras accounted for 95% of its 50,000 distributors and they were gradually expanding their distribution networks in Indonesia.
Tan said its distributors initially developed their businesses in the Klang Valley and other parts of Peninsular Malaysia, followed by Sabah, Sarawak and Brunei. Now, they have plans to penetrate the overseas markets.
Hai-O Marketing general manager Jimmy Ow said the company saw Indonesia as a potential growth market due to the strength of its distributors.
“Now the information technology infrastructure is ready and products for the market have been identified. We would set up wholesale and retail outlets, marketing offices and training centres there to provide better facilities to support our distributors,” he added.
In the next three years, Ow said, the company would also focus on corporate branding and concentrate on advertising and promotional campaigns.
Started 15 years ago, Hai-O Marketing imports and markets a wide range of traditional Chinese medicines like herbs, health supplements and health drinks. It also retails Chinese pu-er tea, lingerie, Lubricate motor oil, Ezigrow folio fertiliser and other household consumer products.
The company would also soon import some milk products from Inner Mongolia Meng Niu Diary Industry (Group) Co Ltd for sale in the local market.
“With an expanding group of distributors and a wider range of products, Hai-O Marketing will continue to shine in the multi-level marketing (MLM) sector,” Tan said.
He recalled that five years ago, Hai-O Marketing suffered from some internal problems and its sales plunged from RM150mil to RM90mil while profits dropped from RM10mil to zero.
Yet, most of the bumiputra entrepreneurs were patient and supportive, staying with the company. Tan respects them for their loyalty to Hai-O.
“With their strong support and contributions over the years, today we are in a cash-rich position and have no borrowings at present,” Tan said.
He feels proud that the aggressive distributors have brought in significant sales to the company and have even performed better than expected.
As the key contributor to the group's revenue, Hai-O Marketing expects its sales to double this year from RM54mil in the financial year (FY) ended April 30, 2006. Its pre-tax profit grew 40% to RM6.3mil in FY06.
Among the bumiputra entrepreneurs who are Hai-O distributors are husband and wife Jamsari Moktar, 39, and Safiah Yosop, 37.
The Universiti Malaya (UM) graduates joined Hai-O in 2001 after they had tried out 20 different MLM businesses.
They made their first million in the first year with a group of 1,000 distributors under them.
“Today, we have 11,000 distributors contributing RM6mil monthly sales to the company,” said Jamsari, who was a lecturer in UM.
Safiah, formerly a school teacher in Petaling Jaya, said the wide range of Hai-O products and the effective marketing plan helped to boost their sales.
Another couple who distribute Hai-O products, Madon Buyong, 47, and Samiah Parman, 45, have high regards for Hai-O Marketing.
“Good management of the company and best quality products have become a strong platform for us in building our own business,” Samiah said. Their networks now are expanding to east Malaysia, Indonesia and India.
Madon said they had achieved RM2mil sales within two years, and now their group had more than 10,000 distributors with monthly sales of RM6mil.
(The Star, Starbiz, Monday 7 May 2007 )