Door to Success (The ClubHouse)

On the occasion of their silver jubilee, MST Golf’s founders Ng Yap and Low Kok Poh sat down with Edward Saminathan to chronicle their rise from a humble, two-man operation to becoming the region’s leading integrated golf services provider.

From humble beginnings in Sekinchan to South East Asian dominations: MST Golf’s managing director Low Kok Poh (left) and chief executive Ng Yap

The ClubHouse [TCH]: Congratulations on MST Golf’s 25^th anniversary in 2014. For those of us not in the know, how did the two of you get started in the golf business?

NG Yap [NG]: We set up a general trading and marketing business together after completing our engineering studies in the United States. After some hits and misses, it was rather by coincidence that we found ourselves in golf business. While working in New York [KP had already returned to Malaysia then], I bumped into a pawn shop advertising used golf clubs and not knowing much about golf then, I called KP and asked him if we could go into the business of pre-loved golf clubs.

Low Kok Poh [KP]: The timing was right, I sensed that golf was about to boom in Malaysia and decided to ship in the first batch of sets. Little did we know that those sets were actually antiques, and we made a healthy profit from them. It was, for want of a better word, junk that could be turned into money and with the market preference skewed towards American-made clubs, it seemed like a very good business venture.

As a young start-up, how difficult was it?
KP: Being a niche business selling used clubs, we were not competing against the bigger players in the market such as Car&Co, Powerstate, Tomisho, Robertson, Wilson & Jamil, who were selling brand new sets. So, at the beginning, there was not much competition and we enjoyed relatively good profit margins.

NG: But we realised very soon that we could not depend on used clubs if were to grow the business. However, we found out that being a relatively new kid on the block and small Malaysia company, we had a tough time convincing the big brands on distribution rights at first. So, it was a case of one measured step at a time.

Did you envisage then that you will be where you are today, in terms of growth and size of the business?
KP: Our vision back then was to be a sizeable company with a Southeast Asian base. We knew even then that we could not be reliant on the Malaysian market alone and it is reflected in our name: MST stands for Malaysia, Singapore and Thailand [the company was originally incorporated as Masinthai Marketing Sdn Bhd]. And thanks to a loyal clientele over the years, we have enjoyed a slow and steady upward growth from the very beginning.

NG: If I had the hindsight that this industry would be this tough today 25 years ago, I may have had second thoughts because it has taken us this long to reach this level. Nonetheless, I have no regrets because over time, we have proven ourselves time and time again as a major player in a small and very closely knitted industry.

From a pre-loved golf clubs importer, to a multi-brand retailer and now with your own house brands; from one door to close to 50 and counting as well as various other golf-related ventures, both in Malaysia and around the region, what has been the key to your success and how do you sustain that pace?
NG: Hands-on approach and making quick decisions have been crucial. There are no shortcuts to success, you learn as you go and there is always an urgent need to innovate.

Golf was a relatively non-existent industry back then in Malaysia and we had to learn from the developed golf nations such as the United States and Japan. It was important to be a step ahead of the competition and always try to be at the forefront of the industry.

Over time, the game has evolved, the retail sphere is definitely different today and the marketplace has become more challenging.

What have been the biggest challenges that MST Golf has and continues to face?
KP: The game is definitely not the same, it has advanced in leaps and bounds. One good example would be the product cycle today. Twenty years ago, we would have a new driver release once every three to five years – now, we have one every three to five months.

When we started, we were a niche business but it is not the case today as there are so many new players. The biggest challenge for me has been to maintain our share of the golf retail market and remain at the top.

NG: It is tough for anyone to start their business from ground zero and we were no exception. We did not take a proven existing business model and just hit the start button; we had to create along the way and we learnt from our mistakes and constantly looked to improve.

It goes without saying that much time, effort and cost have been spent on the various phases of our growth and especially when we went regional because the moment you step outside of Malaysia, you have to overcome language and cultural barriers, adapt your style of doing business as well as fall within the laws and regulations that effect how you can operate in those countries.

The golfer, whether 25 years ago or today, is still the toughest customer to serve, especially with advent of information and communication technology today. The retail environment may have changed overall but golf remains very much a traditional “look and feel” business. 

Staff turnover is a perennial issue at the heart of any retail business and golf is no exception to that. Nonetheless, your core group of employees have been with the group for a long period. What do you it down to?
NG: We started as a two-man team and have grown close to a 400+ workforce today. Again, our staff are the engine of the organisation, the most important asset in our business.

Being understanding, treating them as friends, being transparent and upfront about the company’s prospects and providing them with a comfortable and conducive working environment are important aspects of managing people.

In that sense, we’re lucky to have retained our key figures – some for over 20 years and we continue to attract good people from our competitors. We appreciate talent and we will continue to create opportunities for bright individuals looking to grow within the group as we expand.

KP: If I can recall, during the 1997 economic crisis, we were concerned just like any other business on whether we could withstand the storm and we announced that year that we would not have a bonus payout.

Bus as we found out later, golf was not only recession-proof but grew at a healthy pace during the downturn. So, at the end of the first quarter of 1998, we saw no reason not to give our staff the bonus they deserved. We are grateful to our staff for giving their best all the time and driving our business forward over the last 25 years.

For a home-grown brand, MST Golf has become a household name in the golf scene. How much thought and attention have you given to the branding aspect of the business? Did it take off naturally or you had to nurture it over the years?
KP: In the beginning, I don’t think we focused on the branding aspect of MST itself because we thought it was just the retail identity. Our academy, golf repair shop and other golf-related ventures did not carry the MST brand and we found ourselves with many isolated brands floating around. But in more recent times, we have considered the pros and cons of moving forward as the MST Golf group and we have paid more attention towards brand building.

NG: The reason for this change of direction was simple: we only realised how powerful our brand was when we inked the licensing agreement with UK-based SportsDirect Plc three years ago to open the first SportsDirect.com store in Asia.

Even now, as we plan on embarking on a new venture with a US-based company on a golf course design and club management business, we have been requested to maintain MST as part of the company name. To know that our brand is highly regarded and reputable in these parts is very heartening.

We have embarked on a brand campaign in celebrating our 25^th anniversary – Think Golf, Think MST Golf. As we continue to set new heights and standards, perhaps as the sole integrated golf services provider in Malaysia, we remain committed to bringing Everything Golf to our customers.

Do you still feel there is room for MST Golf to continue its rapid growth in the retail market or have you reached a level now that you can be comfortable with a slower pace? What are your future plans as far as retail is concerned?
NG: To be honest, I think we have slowed down a little in the last two years. It took us a while to get used to a bigger space here at Subang Jaya as compared with our congested Menjalara office. We have just completed a major overhaul of our inventory management and point of sales system nationwide to ensure that we run like a Swiss clock and we will continue to refine the system this year.

Having said that, we are now ready to crank it up once again and raise the benchmark again, especially with our resources freed up after SportsDirect UK took a direct stake in the local SportsDirect.com operations.

We plan to be quite aggressive and we have clearly mapped out what we have to do. We have, and it depends on who talk to, 40-50% of the market share currently. We know the market very well and while there are certain considerations in the market to take into account, we believe we can grow our market share further.

KP: We are always on the lookout to open new outlets but it has to be the right location, location, location – I can’t stress that enough.

Not much is known about your overseas venture. How big is it and do you see that as a way forward as well?
NG: Singapore remains a key market for us. We were there about 15 years ago during a very competitive period, and we have shown our resilience. The island state contributes to 30% of our group turnover and I will acknowledge that having  Dato’ Loh Ah Joo (the founder of PanWest) as a key partner has proven to be a masterstroke.

Other than a short-lived stint in Taiwan, we were once big in Thailand with close to 12-15 stores but issues with a local partner meant we had to consolidate and with the current climate of uncertainty there, we have put our plans on hold, even as our wholesale business continues strongly. Vietnam is a relatively soft market with a slow growth pace and we feel that our three shops provide a good presence for the time being.

Would you go into an online store or tie-up with the likes of Zalora or Lazada to open an online channel?
NG: We are giving it serious thought and while there are interested parties approaching us, we feel it is quite a specialised step forward. But eventually, I believe if shopping preferences change, we will embrace it as well and build on our advantage of having an excellent coverage of the Malaysian market.

The MST Golf Academy remains an important cornerstone of the group’s business. While back in those days, you were more focused on juniors, today your involvement with the Sime Darby LPGA Development Programme as well as the PGM Peak Performance Academy puts the academy on a more specialised route. Is that where you see the academy headed or will it remain a mass product available to all?
NG: We began the academy with the aim to help grow the game of golf, especially among juniors as well as golfers of all levels, who want to play better golf. While the academy is commercially driven, I would be the first to admit that it contributes the least in terms of revenue to the group.

Nonetheless, we persevere because the more players we bring into the game and increase the golfing population, our retail business will definitely benefit from the spillover effect. That is long-term plan and we’re committed to that.

In terms of elite programmes we are involved in, it is driven purely by national interest because we sense the frustration of our elite players who do not have access to the facilities, technologies and teaching methodology to better themselves locally.

We have the means to pull the resources together and make that higher level of instruction available and we appreciate that Sime Darby and Professional Golf of Malaysia (PGM) have partnered with us. We are confident that given time, we will be able to produce professionals who will achieve success on the regional, if not world scene and become role models and heroes for future generations.

Your expansion into the food & beverage and golf vacation divisions respectively had calculated risks. How have these two ventures fared?
NG: Our entry into the food & beverage business via the R&R Café was by virtue of default because of the many concessions we hold at the Kuala Lumpur Golf & Country Club driving range. It is not profit oriented, rather we merely want to complement our existing services.

Golf Vacations is one of our long-term business ideas. Our golfing population is relatively small and many of our golf clubs are suffering from low rounds. While the end goal should be to grow that pool of golfers locally, the best immediate solution is to drive inbound golf tourism. We joined forces with PEMANDU three years ago to identify how we could better promote Malaysia as a golfing destination and we are pleased to have been a founding member of the Malaysian Golf Tourism Association (MGTA).

We see golf vacation as a big, untapped opportunity and given our position as one of the most competitive golf retailers in the region, it is a win-win situation for us if more golf tourists come to Malaysia and spend at our stores.

Your vision going forward – where is MST Golf headed and what are your goals and ambition which have not been realised yet?
NG: Our vision continues to be the leading integrated golf service provider in Southeast Asia. Everything we do is well defined, professional and focused. As leaders, we will continue to drive that attitude across the group and look for new and exciting opportunities within golf.

Personally, I will focus my attention on our sports retail division in the coming years. Tapping the financial muscle and expertise of our partners SportsDirect, we see a big potential in opening new doors and growing that division rapidly.

We are looking at establishing 10 SportsDirect.com outlets by the end of the year and 25 within the next five years. That plan will keep us busy for some time but we’re still young and up for new challenges.

How would you describe your partnership?
KP: We are different characters but hailing from the same Sekinchan roots, we share common values – none more important than the belief that we must give more and take less. That has been the lasting recipe of our partnership. I’ve known Ng Yap since we were in primary school and it is a chemistry built over the years. Being on the same wavelength, we continue to support as well as argue with each other passionately as we did 25 years ago.

25 YEARS – A POSITION OF STRENGTH

This article was originally published in The ClubHouse magazine, issue 34 (05/2014)