Challenger Technologies: 3 things we learned from the 2015 AGM
Challenger is a dynamic regional IT retailer known for its strong brand name, attractive ValueClub member privileges and strong product partnerships with major global brands. Since inception in 1982, they have expanded to over 45 stores consisting of Superstores, Mini stores and Musica stores across Singapore.
Challenger’s ValueClub of roughly half a million members get to enjoy discounts on the latest IT products while being assured of quality, value and service. In 2012, we started our private label Valore, bringing affordable lifestyle and mobility accessories to our customers.
ValueWalk's Raul Panganiban interview with the founder of ValueWorks, Charles Lemonides. In this interview, we discuss the opportunities he is seeing in the market today. Q2 2021 hedge fund letters, conferences and more Interview with ValueWorks' Charles Lemonides ValueWalk's . . . SORRY! This content is exclusively for paying members. SIGN UP HERE If you Read More
With the closure of Funan, Challenger’s biggest store, we decided to attend Challenger’s AGM to understand how management is going to navigate the tough times ahead.
Here are 4 things we learnt from Challenger Technologies’s 2015 AGM:
1. Challenger Ventures – Hachi.tech
I believe many investors noticed that Challenger Technologies incorporated a new subsidiary called Challenger Ventures. Challenger Ventures is a wholly-owned subsidiary focusing on investing in companies and businesses operating within Challenger’s digital ecosystem by providing support for the group’s business operations and other subsidiaries within the group.
However, what caught our attention was Hachi.tech, a wholly-owned subsidiary under Challenger Ventures. The closure of Challenger’s superstore at Funan would result in a decrease in revenue and net profits by approximately 20%. To mitigate this decrease, management’s strategy for the company in the next 5 years would be to develop Hachi.tech, which is a marketplace for Challenger and their distributors to market all their products.
2. The closure of Funan gave impetus to the company’s new strategy
The CEO admitted that the closure of Funan was the kick that got the company to start changing the business model. The current business model of focusing on retail stores would be fine for the next 3-5 years; however, the question is what’s next after 5 years? The management realised that with the current business model, they have been experiencing difficulties increasing their sales, especially since Singapore has a population of around 5.5 million. Management has tried venturing outside Singapore using the same business model as seen in Malaysia; however, they realise that they lack the network and expertise to succeed in it.
3. The differentiating factor between Hachi.tech and other e-commerce sites like qoo10
With e-commerce sites like qoo10 having the first mover advantage in this field, the key issues is the differentiating factor between Hachi.tech and the others. One thing we have to understand is that Hachi.tech is not just an online portal for Challenger to sell their products. Hachi.tech is a marketplace where Challenger and their network of distributors would use to market their products to the members. Challenger’s strong relationship with reputable distributors would play a vital role in Hachi.tech’s success.
Furthermore, with Hachi.tech, Challenger is able to increase the variety of products that they are able to offer. No longer will Challenger just be offering retail products but they will be offering enterprise products (e.g. servers) as well. This is because previously enterprise products were difficult to be sold via retail shops. With the online marketplace established, such products could be easily sold and is another channel to increase the sales for the company.
As part of our mission to make quality investment education affordable and accessible for everyone, we are very excited to announce our 2-part investment workshop held on 7th May and conveniently located at Park Mall!
For more information, check out our Courses page! We look forward to seeing you!