Golf company set to win with other sports
By Joy Lee, Star MetroBiz (Business)
While many hold fast to the adage “Never do business with friends”, ignoring it has proven to be a more rewarding option for Low Kok Poh and Ng Yap, the founders of MST Golf Sdn Bhd.
Low and Ng have been friends since they were seven years old and this year the two will be celebrating 25 years of doing business together.
After their tertiary education, Ng and Low started a business but their first attempt ended up with a failure. But that did not stopped them for pursuing their dream.
Ng subsequently found some used golf clubs, which the duo sold and profited from it. Soon enough, Low decided it was time to start a shop and they founded MST, initially called Masinthai Sdn Bhd, in 1989.
“We came upon it by chance. It was good timing because golf started to boom here in the 1990s,” said Low, who is now MST Golf’s managing director.
Today, MST is a recognised brand in the golfing community, operating the largest retail chain with over 50 outlets, driving ranges and academies across the region. It also has a sprawling 25,000sq ft sports store, the largest in the country, in Subang Jaya.
An established collaboration
Having built a successful golf-driven business, MST ventured into retailing other sports products a few years ago to widen its market. “The golf market is only so big. And with the country’s fondness of sports, it is a logical move to go into other sports. Golf will still be the heart of the MST group but we are now open to a larger audience,” said Paul Gibbons, who is the executive director of MST Sports Retail Sdn Bhd, a subsidiary of MST.
About two years ago, MST obtained a licence from the UK’s largest sports retailer, SportsDirect.com, to distribute the latter’s products here.
SportsDirect, which was founded in 1982 by current Newcastle United owner Mike Ashley, had been eyeing opportunities to penetrate the Asian market and the partnership with MST helped to fast-track its expansion.
In the few years the two groups have worked together, MST has proven to be a valuable partner for SportsDirect here. The UK retailing giant was impressed with MST’s business model that it signed a joint-venture deal with the company last year to open SportsDirect outlets locally.
“They look at us as a solution to their Asian business. We have not known them that long, but there is a lot of confidence placed on us and we appreciate that,” said Ng. The new collaboration provides MST with stronger financial backing and clearer vision to expand its non-golf segment.
The deal enables SportsDirect to leverage on MST’s knowledge to localise the retail business for the Asian market, said Ng. Additionally, MST has a presence in Singapore, Vietnam, Thailand as well as China, which gives SportsDirect a good network to start with
Growing its other core
The local SportsDirect outlets will replicate the ones in the UK, which feature the “big box” model. The outlets have about 10,000sq ft of floor space with as many products as possible.
“Size does matter. We want to be a destination shopping place where people come for the products. This is the way to get repeat customers because they will come back for products. And with the deal, we don’t have to worry about funds to expand,” Ng said.
The group is looking at establishing 10 SportsDirect outlets by the end of the year and 25 within the next five years. MST has also been asked to be anchor tenants in several Tesco malls including Bukit Tinggi, Klang and Desa Tebrau, Johor.
SportsDirect has some 30 brands under its belt including its own brands such as Dunlop, Slazenger and Lonsdale as well as big names such as Adidas, Nike, Reebok and Puma.
“The brands we are bringing in are focused on the South-East Asian market. We have to make sure it is the right product mix where there is something for everybody,” Gibbons said, adding that the five key categories for SportsDirect were soccer, racquet sports, running, outdoor activities and swimming. Gibbons added the group would be putting in effort to communicate the brand to consumers to ensure a strong presence in the market.
Ng hopes to grow its venture with SportsDirect into a formidable segment in the MST group. “We currently have about 40% to 60% share of the golf market. We don’t see why we can’t make it with SportsDirect as well,” he said.
After 25 years, MST’s golf- related businesses currently generate an average annual revenue of about RM110mil. Ng is confident that other sports will rake in sales of that amount within three to five years given that the overall market for sports equipment is 10 to 20 times bigger than the golf market here.
The local sports market is estimated to be worth some RM2bil annually and Gibbons estimates that golf makes up about 10% of the market.
The group has certainly done much over the years and there is, no doubt, much that the team at MST can be proud of.
Nonetheless, Gibbons remarked the company is not about to sit still. “We don’t want to be in a position where we are complacent. When we set a vision, we need to get there,” Gibbons said.
With funds for expansion coming from SportsDirect UK, much of MST’s resources will also be freed up to grow its golf segment aggressively. The group is looking at strengthening its presence in the Singapore market and will be embarking on new business projects such as designing and developing golf course
From the looks of things, MST has a lot going on its plate and Ng and Low look forward to another 25 years of achievements. “We are proud of what we have done over the years. We have survived many recessions and we are still growing,” said Low.
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