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[New Retail + New Platform] Chapter 8- Technology Innovation

Dec 30 / Charlotte Liew

For a company that was established in the 80s, Senheng remarkably manages to stay on the forefront of the latest technological advancements. As the Founder and Chairman of Senheng Lim Kim Heng puts it: “embrace it or be left behind”. In Chapter 8 of New Retail + New Platform, we get a glimpse of how Malaysia’s largest consumer electronics chain stays relevant with the rapid flow of technological change.   By embedding technology into the retail scene. The retail industry, perhaps more so than many other industries, is largely led by technology. The easiest way to visualise its role is to think of how you pay for in-store purchases nowadays - the contact-free option to pay cashless has become the default option for most. But hold on! For more complicated, elaborate technologies such as Big Data or CDP, it doesn’t mean you have to incorporate every tech update just because your competitors have done so. Lim cautions retailers to consider wisely if the new tech will be worth the investment, and how well it will incorporate into the current systems. Deloitte and Ali Research Institute together have published a study on the “Six Major Changes in Science and Technology Reshaping the Retail Industry”. Retailers can use these six key points below as a basis for what to keep an eye out for. 1. Comprehensively data driven Mastering the art of gathering, analysing and utilising data to optimise the entire value chain. 2. Popularisation of A.I. A.I related technologies will be more prominent in the retail sector. 3. Cost reduction and efficiency On demand cloud computing helps retailers immensely in analysing and collecting data - at low cost, time and labour. 4. In-depth integration The demand and complexity of the marketplace may call for intensive coordination and integration of multiple technologies 5. Popularisation of applications As technology continues on its upward journey, the maturity of today’s applications will only grow, along with the diversity of available applications. 6. Rapid convergence of innovation Enterprise empowerment aside, technology is also reshaping the structure of management and its resources.   Utilizing Business Intelligence. Senheng’s Business Intelligence (BI) system is one of the company’s biggest pride and joy. Despite the costly and time-consuming efforts involved in setting it up, the system has yielded many fruits for the company. The BI system that Senheng adopted covers analytics such: sales performance inventory management staff ratings freight planning automatic replenishment Since 2004, the BI system has provided the company with valuable data to make the right decisions - propelling them year beyond their peers and onto the same playing field as international giants.   By embracing the O2O concept. Brick-and-mortar or e-commerce? Given the choice to focus on just one, which avenue do you think would be more productive? But why would you choose one when incorporating both is a completely viable business strategy? The O2O concept stands for Online-to-Offline retail. This strategy aims to utilise online marketing efforts to draw customers’ in-store to make physical purchases. This way, traditional brick-and-mortar businesses can benefit from an added “online” component, while e-commerce companies can establish a physical space of their own.   Amazon.Go, Alibaba Hema Grocery,, 7FRESH, Tmall, and Suning are just a few examples of online companies which by going offline as well, have embraced the O2O concept. Closer to home, Senheng is one of the first Malaysian retailers to embrace the O2O concept in Malaysia.   By synchronising online and offline marketing efforts. To support the O2O concept, the Senheng team had to get creative with their marketing and advertising - and get creative they did! Comparing Q1 2017 to Q1 2018, Senheng’s conversion rate from Facebook advertising alone increased from 0.22% to 0.37%. The actual revenue increased from RM52,000 to RM160,000. The company continued its uphill trajectory with Q2, when the conversion rate increased from 0.18% to 0.32%, while the revenue went from RM66,000 to RM188,000!   A few ways Senheng did this is by: Using data from Facebook to map the correlation between online and offline consumption Using Facebook’s location tracking function to convert foot traffic into sales of specific branches Formulated relevant advertising strategies based on real-time weather and temperature data (pushing water heaters in rainy areas, and air purifiers during hazy weather etc.

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[New Retail + New Platform] Chapter 7- Corporate Social Responsibility

Dec 11 / Charlotte Liew

“Return to the society what you’ve taken from it” Translated from a Chinese proverb, this saying captures the essence of what CSR is really about - not just bolstering the corporation’s reputation, but also establishing a compassionate company culture and attracting like-minded talents. In Chapter 6 of New Retail + New Platform, we got a taste of how Senheng’s company culture enthusiastically nurtures all employees’ personal growth and successes. This same enthusiasm can be seen in how the company gives back to the community. This time around, let’s take a look at Chapter 7 to discover some of Senheng’s CSR initiatives over the past two decades.   Senheng’s CSR Programs Over the Years 1.  Environmental Responsibility 2003: The Launch of Biodegradable Plastics. Senheng replaces all non-biodegradable plastic bags that had previously been in use to biodegradable plastic bags across all outlets. 2009: The Launch of Eco-Friendly Bags. Following the switch from non-biodegradable to biodegradable plastic bags, Senheng launched a recyclable eco-friendly carrier bag to further promote environmental awareness among shoppers. 2010: I Plant A Tree Project. In collaboration with the Malaysian Wildlife Society (WWF), Senheng launched a tree planting project in the forests of northern Ulu Segama, Sabah. The big picture was to protect the local wildlife in the area. For every inverter air conditioner sold at any Senheng outlet, a tree would be planted in the northern forest of Segama. Compared to non-inverter air conditioners, inverter air conditioners prevent wasteful energy consumption and are up to 30 - 50% more energy-efficient. This program successfully covered 46 hectares of forest, with a total of 7,700 trees planted. 2013: Electronic Waste Recycling Program. As Malaysia’s largest electronics retailer, Senheng takes the issue of e-waste seriously. Together with the Malaysian Department of Environment, Senheng has assisted our government in setting a clear direction and policy in formulating long-term plans for e-waste management. Electronic waste collection bins have also been placed in Senheng outlets nationwide. 2014: “I Love Panda” Sponsorship Activities. Remember Xing Xing and Liang Liang? When the two pandas were sent from China to celebrate the 40th anniversary of diplomatic relations between Malaysia and China, Senheng began donating RM500,000 per year for two consecutive years to the National Zoo.   2.  Youth, Sports and Education 2000: Orphans Adoption Program. 20 years ago, Senheng’s first CSR initiative involved working with Hope House to promote the orphan adoption program, sponsoring the full living and education expenses for 57 orphans for three years. 2010 - 2016: Senheng-Samsung SS Junior Badminton Scholarship. Over the years, Senheng has made a significant impact in nurturing young badminton talents in Malaysia. One of the most notable would be the Senheng-Samsung SS Junior Badminton Scholarship, which was listed in the Malaysian Book of Records and became the most popular badminton event for athletes. Young talents discovered through the Senheng-Samsung Junior Badminton Tournament were shortlisted and fully supported in terms of not only full-time professional training, but also education and accomodation fees. Together with Samsung, the company pledged RM1.5 million per year for six consecutive years to sponsor young badminton talents. Today, there are more than five national players in the Malaysian national team who were recruited from the SS Junior Badminton Scholarship Program. 2012: “Standards for Being a Good Student and Child” (Di Zi Gui) Project. Most Malaysian Chinese will be familiar with the book“Standards for Being a Good Student and Child”, which speaks of values such as good social conduct and filial piety. Senheng believes in moral education just as much as academic education. The company’s initiatives under this program include a talk on filial piety and family values at the Plenary Theatre in Kuala Lumpur Convention Center. Well-known publisher and writer Poh Seng Titt also held a series of related activities and a five-hour talk on the book for the company’s own employees. Senheng also partnered with Ai FM to sponsor the “Standards for Being a Good Student and Child” radio program. 2019: The Launch of the New Senheng Education Assistance (SEA) Program. Just last year, Senheng launched the Senheng Education Assistance Program (SEA) to help poor students with excellent academic results to pursue their dreams. The program sponsors 20 students per year with RM20,000 each to pursue their chosen academic program.   3.  Economic and Ethical Responsibility 2008: Raised RM202,898 for Sichuan Earthquake Victims. In the wake of the tragic magnitude 8 earthquake that devastated Sichuan, Senheng in partnership with Sin Chew Daily launched a fundraising effort. The program successfully raised RM202,898 from customers and employees. 2018: Donation of RM1 million to Hope Fund. Strongly believing that citizens should faithfully contribute to the country, Senheng’s Managing Director Lim Kim Heng donated RM1 million to Malaysia’s Hope Fund (Tabung Harapan Malaysia) when it was first established.   Make space for CSR in your company. In today’s highly competitive business world, compassion always pays off. Be it in business or our personal lives, what one puts out into the world will be returned with equal magnitude. If you’re having trouble deciding on a worthy cause for your company’s CSR initiatives, take inspiration from Senheng’s CSR stories!

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