NO business is completely
recession-
proof, but there are those that will thrive in spite of – or sometimes because of – the slumping global economy.
According to Yayasan Tekun Nasional (YTN), the micro-credit agency of the former Entrepreneur and Co-operative Development Ministry, one bu
“When people tighten their belts, they will take advantage of certain goods and services. For example, during a downturn, people are going to be repairing things more than replacing them,” says an agency official, who only wants to be known as Anuar Mohd.
Although no real growth has been recorded, he notes that those in the fix-it business such as shoe repair, clothes alteration, car repair, electrical appliance repair and handyman services generally enjoy an upswing as more and more people opt to cut spending by repairing items that they would have otherwise replaced.
Catherine, as she wants to be known, who has been running a business specialising in shoe and bag repair with her husband in Subang Jaya for over 15 years, says their business has seen about a 30% spike in the last six months.
“We noticed that we were getting more customers last November but we put it down to a normal year-end trend. Usually our business will pick up at the end of the year. But then in the first three months of this year, the number of customers continued to grow,” she says.
While they have a regular client base who are sending more things for repair, adds Catherine, the number of new customers has also increased.
They cater for all types of footwear and bags at the shop but they have received more designer products for repair, she notes.
Catherine says most customers tell her that they are looking to make their footwear and bags last longer before replacing them with new ones.
“Many say they would rather mend their shoes and bags because the economy is bad. But most of our customers use quality goods, so these last longer anyway,” she says, adding that sometimes it is just not about the money.
“It might be about sentimental worth or because they are comfortable.”
Catherine currently employs six workers at her shop and says that she might need to hire more. Due to the overwhelming demand, repair work that used to take a few days can now take about two weeks to complete. Prices range from RM10 to RM150, depending on the repair work and material required.
Fortunately, she says, the cost of materials, such as leather and rubber soles, has not gone up too much, so they have been able to maintain their prices.
“We were able to find more economical materials without compromising the quality. At the same time, we also use the more expensive ones because there are customers who require that.”
Business has also been good in the last few months for Hasan Ahmad, who has a sidewalk cobbler stall in Brickfields.
“Some people bring their new shoes for reinforcements, to put an extra sole; they say that will make the shoes last longer,” he says.
Hasan, who has operated his business for more than 10 years, adds that he has also noticed more sidewalk cobblers around Brickfields. “Maybe they can see that business is good,” he says.
However, the same cannot be said about the garment alteration business. According to Daud Ariffin, who has a clothes repair and alteration shop in Pudu Raya, Kuala Lumpur, his business recorded about a 30% drop in the past year.
“I suppose it is something that you can do yourself. Also, there are many cheap new clothes available in the shops and pasar malam that you can buy. There are also some second-hand stores selling good clothes,” he says.
Y. Foo, who runs a tailor and alteration shop in Cheras, agrees. Her business has also slowed down in the last 12 months, she says.
“Usually, most people who come in for alteration do it because they want to keep their favourite dress or trousers, or because they want to preserve something they have inherited from their parents or grandparents. Not many do it because they have to,” she says.
Putting off big buys
It is also a mixed scenario in the car repair business.
John Lee, owner of a petrol station and garage in Ipoh, says that in the 15 years he’s owned his business, it has been good regardless of the economic climate.
“There will always be vehicles that need repairs, no matter how the economy goes,” says Lee.
He says he has noticed a small increase in the demand for car repairs since the beginning of the year.
The recession, he says, “will probably affect our business in a good way. Fewer people are going to buy new vehicles; they’re going to fix their old ones. That will give us more business.”
True, in an economic downturn, the sale of new vehicles is sluggish. Across the nation, the trend seems to show that people are holding on to older vehicles that often come with more maintenance and repair needs.
The Malaysian Automotive Association (MAA) recently revealed that vehicle sales in February slid 3%, or 1,126 units, to 36,675 from January due to lower consumer confidence as a result of the economic slowdown.
Analyst firm TA Securities predicts a 16% decline in the motor vehicle sales in the country this year. However, some owners of local garages are saying that the number of customers actually getting their vehicles repaired is low.
A mechanic, who only wants to be known as Ah Keong, says he has seen “more down time” in the past 12 months and hopes the economy will turn for the better. “I haven’t seen any increase in business. We have not been doing that well lately, especially with the hike in the prices of spare parts.”
He feels that most people are letting their cars’ mechanical problems go for as long as they can.
“I think people are just doing enough repairs to hold their cars together,” says Ah Keong, who has been running his business in Petaling Jaya for over 10 years.
He hopes the down economy will eventually help car repair shops. “Maybe more people won’t get car loans and have to get the vehicles they have now repaired.”
He opines that the Government’s “car scrapping” scheme that was announced during the recent mini budget recently to help boost vehicle sales might take away some of his business. Under the scheme, owners who trade in their cars aged 10 years or older for new Proton or Perodua cars will get a discount of RM5,000.
Looking for the latest model
Mobile phone repair businesses, however, are not getting a windfall from the economic slump.
According to CK, who manages a mobile phone repair shop in Low Yat Plaza in KL, many would rather buy a new phone if their phone is faulty.
“You can get a working mobile phone at low prices – as low as RM 100 – so many think that it is not worth repairing their phone,” she says.
Raymond Thian, who operates a mobile phone and repair store in the capital’s IT centre for eight years, concurs.
“Many prefer to replace their faulty phones with a new or cheaper model. It really depends on the repairs needed. Many want their phone repaired because of sentimental reasons,” he says.
Thian, however, anticipates more demand for repairwork if the economy worsens.
“We have been feeling a slight slump in the last few months, and I expect it to get worse.”
According to IT research firm IDC, mobile phone users would continue to use their telecommunications service but opt for cheaper alternatives.
IDC market analyst Esther Gan, nevertheless, predicts that telecommunications spending in Malaysia will remain resilient this year. It is projected to achieve a moderate growth to RM24 bil despite the slowing economy.
Demand has not changed yet in the electrical and electronics repair industry either, says an electrical repairman who only wants to be known as Chong.
“However, I am getting more customers who are interested in the second-hand things we have. There seem to be more people who are looking to trade in or sell off their electrical things like hi-fi system or DVD player,” he adds.
Kenny Lim, who runs his family’s audio-visual (AV) equipment store in Petaling Jaya, concurs.
“We deal in high-end AV equipment, and it has not really been affected yet. Many of our customers are audiophiles and are always looking to upgrade to a better or latest model, so they are not reluctant to spend. However, I have more inquiries from people who are looking to offload their equipment. Unfortunately, there are not many customers out there at the moment, so I have to turn them away,” he says.
Similarly, computer repair is also not on the rise yet as many are still buying new computers. “You can now get a laptop at only RM1,000, so many prefer to just replace their computer instead of repairing it,” says Azmi Kassim who owns a computer shop at Low Yat Plaza.
He concedes that the sale of low and middle-range computers has been affected by the economic slowdown. However, he adds, the sale of higher-end models has been steady.
According to a survey by market research firm GfK Asia, the demand for high-end consumer electronical items was strong in South East Asia throughout 2008. The firm adds that although its growth will be slightly slower in 2009, it will remain resilient.
The survey of consumer buying trends in 12 Asia-Pacific countries by GfK Asia shows that despite the bleak economic news that clouded much of last year, there was hardly any change in the buying habits of technology-savvy Asians who were on the lookout for the best and latest in electronic gadgets.
In the current year, GfK expects Asian consumers to be more conservative in spending, but they will still be attracted to good deals that offer value for money.
