Kitchen furnishers spend big on cookshows, TV ads

 

HOUSEHOLDS of Malaysian professionals, on average, spend more money to furnish the kitchen, despite spending more time in the living room.

This would account for home-grown brands like SignatureKitchen and AinoKitchen spending big money on television advertisements and co-sponsoring popular weekend cookshows like Ho Chak and Hong's Kitchen.

"Kitchen furnishing is in a class of its own. In terms of value adding and customised designs, we're way ahead of living, dining, bedroom or office furniture," Signature International Bhd group managing director K.C. Tan said in a recent interview.

Apart from buying a house and a car, he said, the next big purchase for a middle-income household could, arguably, be kitchen furnishing.

Since the 1990s, there had been many kitchen furnishers but most only experienced transitory success. Like a shooting star, they burned fierce and bright but just as quickly, they fizzled out of the market.

The promising ones with staying power are those who instil brand loyalty in their clients.

In a separate interview with Business Times, AinoKitchen (Malaysia) Sdn Bhd managing director Philip Chee Kian Tshung said co-sponsoring the Taiwanese cookshow Hong's Kitchen is part of the company's international branding strategy.

Establishing an original brand of kitchen furnishing is not for the faint-hearted. As Chee lists down the amount of capital-intensive investments that AinoKitchen will undertake, it became clear that deep pockets and strong stomachs help as the management adjusts from manufacturing to retailing.

While SignatureKitchen and AinoKitchen have taken to cookshows and television commercials as part of their branding campaigns, their business models differ.

Tan and Michael Chooi founded second board-listed Signature International Bhd 14 years ago, with just RM100,000 from their pooled savings. Today, it has 23 showrooms throughout Malaysia and 12 in the overseas market.

In contrast, AinoKitchen, backed by main board-listed timber company Lingui Developments Bhd, set up its first outlet in 2006. To date, it has six showrooms in Klang Valley.

SignatureKitchen is looking to export more and broaden its overseas exposure by appointing dealers. AinoKitchen, however, prefers to control ownership of its outlets and focus on the local market.

In its last financial year ended June 30 2008, Signature posted RM15.12 million net profit on RM110.19 million revenue. Meanwhile, Chee estimates thatAinoKitchen will break even by mid-2010 as the company continues to invest in human capital development and new product designs.