Lee Seng Shoy: Casting a Global Net
The owner of Hong Guan (Tackle) is actively pursuing an internationalisation strategy to secure its long-term future.
Started off as a modest ropes, nets and hardware store along Beach Road in 1942, the homegrown company Hong Guan (Tackle) has since increased its presence in many overseas markets.
BiZQ speaks to Lee Seng Shoy, the fourth-generation owner and current Managing Director of Hong Guan (Tackle), on his company’s internationalisation journey and the impact of the pandemic on his business strategy.
How has Hong Guan (Tackle) evolved and transformed since it was founded in 1942?
Our company started out as a shop selling general hardware, ropes, and nets along Beach Road. The introduction of sportfishing in the 1970s played a pivotal role in the transformation and diversification of our business as demand for fishing tackle grew, and our company seized the opportunity to expand our portfolio and product offerings. When I first joined in 1996, I noticed that the Singapore market was too small for many businesses, including mine, and we needed to venture out of Singapore to keep our business viable and sustainable.
These factors combined to help our company grow and become a leading regional fishing tackle distributor with subsidiaries in Malaysia, Thailand, Indonesia, and China, and we primarily distribute our own proprietary brands. We have also planned to expand our marketing efforts in China, but these plans have been delayed due to the pandemic.
To date, our company has been exporting to more than 30 countries worldwide and is a leading market player for ASEAN in fishing tackle distribution. It has been 78 years in the making, and we will continue to evolve and stay ahead of the curve to secure our survival.
Given that the business is in a niche industry, how did the company identify the overseas markets it wanted to expand to?
Every business, big or small, can and should internationalise to optimise revenue streams from multiple markets. Ideally, the potential regions that we identify should be emerging markets with a significant population base, as well as being close to Singapore, which forms the foundation of our business.
In this respect, ASEAN was the ideal starting point for our expansion, given its young population and growing middle class. The proximity to neighbouring countries, such as Malaysia and Indonesia, and the familiarity of the waters around the region, have also helped us in getting our products into these markets more effectively and efficiently, and build a solid foundation from there.
In a nutshell, business is all about sales. Singapore is simply too small as a stand-alone domestic market, especially for businesses in small and niche industries like ours. Hence, going international becomes even more pressing and a pre-requisite for us to survive in the longer term.
What are some of the internationalisation challenges and opportunities for the company?
Opportunity knocks on those who are prepared. As for the challenges, language barriers, different customs, and jurisdictions, are just a few that we faced. For example, our overseas subsidiaries are subject to laws of those countries, and such laws may not be the same as the ones we are familiar with in Singapore.
Our overseas subsidiaries are also working with different languages, which I think would be the biggest barrier. For example, the 7 to 8 country heads in ASEAN would need to be familiar with both the local languages and our primary language of communication in English, versus, say, a Chinese company with 7 to 8 sales units across China, which is not challenged by such language barrier.
Having said that, a positive mindset with a never-say-die attitude is of paramount importance to the survival and success of any internationalisation plan. There would certainly be some pain points along the journey, but there would also be key takeaways for every move made. Staying focused and determined is the key. While the returns may not be immediate given the investment required for internationalisation, the journey will broaden your horizons and help you eventually build up your sales channels.
How has the COVID-19 pandemic reshaped your business strategy, and what are the plans for the company in 2021?
The company operates on “crisis” mode every day. Hence, it does not matter if it is a real pandemic or a “role-play”. My business philosophy has always been guided by a simple Chinese mantra – 居安思危 (“always be prepared for any crisis”). For me, the pandemic is like the Chinese term 危机 (“crisis”), which says it all. 2021 is a year where we will accelerate and overcome the crisis to emerge stronger.
We are also looking at gaining a stronger foothold in a few markets that we have already identified and have plans to make it work! Right now, I am just waiting eagerly for the borders to be re-opened and I am ready to go!