Singer Bangladesh expands to meet the needs of a new generation of consumers
Singer has been operating in Bangladesh for 117 years and growing at a rapid pace. Currently, the company is emphasizing physical sales as well as growing digital commerce to serve current generations. Managing Director and Managing Director of Singer Bangladesh Ltd, MHM Fairoz, shares his company’s plans for investment, expansion and digital customers during an interview with The Daily Star recently.
DS. What has been the key factor in Singer’s continued success in Bangladesh for 117 years?
MHM Fairoz: Obviously, a brand has to earn consumer trust to survive in any market for 117 years. During this long journey, the Singer brand started by marketing sewing machines and we gained trust. This trust factor among consumers of all segments in Bangladesh has helped us.
In addition to the quality of products and services, another key factor behind this long and successful journey is that we have continued to change our business model in line with changing consumer needs. Since everything is going digital, we have also opted to sell products online via our e-commerce site. So, this kind of effort actually helps us stay relevant to consumers in Bangladesh and grow our business.
DS. Where do you see Singer Bangladesh in the next five years?
MHM Fairoz: We want to further improve brand awareness and the strength we have. Although we have been successful so far, we are focused on executing strategies to successfully respond to future generations.
We closely follow global market trends in our industry, especially, in line with Arcelik, the major shareholder of Singer Bangladesh.
Of course, we also look at what is happening in Bangladesh. The needs and purchasing behavior of new generations are changing. They prefer convenience and depend more on service. We have evolved from a product-oriented company to a sales-oriented company. In addition to focusing on our sales, we want to become a more consumer-centric or consumer-oriented company by taking into account the mindset of our future customers and pursuing the success of the company.
DS. What is Singer’s current strength? What is your target in the years to come?
MHM Fairoz: We cannot change the business model overnight. Currently, we have approximately 437 retail outlets, 1,200 dealerships and a corporate sales division. The fourth channel we already have is our online store. With changing consumer behavior, we want to play an important role in e-commerce.
Before the pandemic, we had nearly 100% revenue growth and a nearly three-fold increase in profitability over a five-year period. So, in terms of turnover, our minimum objective is to continue the same growth, from one year to the next.
DS. Singer’s profitability and turnover were impacted in 2020. What is your assessment of your business in 2021?
Mr. HM Fairoz: Not only Singer Bangladesh, but other industries like FMCG, Automotive and Footwear have not been able to carry on business as usual due to the pandemic.
During the Eid-ul-Azha season in 2021, there was a lockdown and we were unable to open our outlets through which around 80% of our revenue is generated. Thus, we lost almost Tk 270 crore in revenue during the third quarter of 2021.
But there have been no job cuts at Singer Bangladesh due to the pandemic because we believe our people are our greatest asset, and when all goes well, our teams will bounce back to seize opportunities.
DS. What strategic advantage has Singer in Bangladesh since Arcelik took over?
MHM Fairoz: We think Arcelik’s takeover of Singer Bangladesh was a perfect match. Before Arcelik took over, Singer was mostly a pretty strong company in terms of sales.
Arcelik has approximately 40,000 employees and 28 production sites in nine countries.
It brings together nearly 12 brands and has 30 research and development (R&D) and design centers. And it has 1,700 researchers and 3,000 international patents. So, thanks to the recovery, we are able to obtain this knowledge, support in R&D or even in terms of quality.
Arcelik has separate quality laboratories. In terms of innovation with Arcelik, we are now able to develop our own models, designs and features that are more suitable for Bangladeshi consumers.
DS. There is a huge segment of the middle class in Bangladesh and it is growing. The researchers suggest that the middle class tends to consume high-end products. How are you preparing for the next 5 to 10 years?
Mr. HM Fairoz: With more disposable income, the middle class wants to raise its standard of living. As a brand, we are quite strong in the middle segment. The needs and demands of consumers moving up to the premium segment are slightly different. They are more brand conscious. They want more premium end products with lots of features and benefits. For this segment of consumers, we have many options online.
At the moment we have a brand owned by Arcelik, Beko, which is a top brand in Europe and clearly the number one brand in the UK. And Arcelik also owns more than 12 other brands. Thus, we still have the possibility to select other brands and offer the premium segment that is emerging in Bangladesh.
DS. What are Singer and Arcelik’s future investment plans in Bangladesh?
MHM Fairoz: We want to increase our local production in Bangladesh to 60-70% from the current 52%. If there are opportunities, we will produce more locally.
The factories we have are able to meet the demand in the next two to three years. But as we move forward, we need to increase our production capacities.
Next, we look at the global trend. With Arcelik’s innovation, technology and R&D, we believe no one in Bangladesh has this capability. We will bring this innovation and capacity, using our local resources. So we need investment and also need to expand our footprint.
Even as business models change and online efforts increase, we still believe there are customers who would prefer to go to retail stores. There are customers who want to visit dealership stores for a bargain and there are also corporate customers. So, with all these channels, we are in an expansion mode for which we need to invest not only in production but also to improve our service. Our plan is to be the number one service provider in Bangladesh in the consumer durables category.