VF Franchise Consulting

Index, Aeon Conspire To Invade Malaysia

Sep 30, 2013

Index Living Mall Co has joined hands with Aeon Group, a Japanese multi-business conglomerate, to tap into Malaysia’s home-furnishings market in a bid to become a regional brand.

Under the scheme, Aeon Index Living Sdn Bhd will be set up with registered capital of 45 million ringgit (440 million baht).

Index Living Mall will hold a 30% stake in the joint venture and Aeon the rest.

Aeon, now a leading retail operator in Malaysia, will strengthen the business of Index Living Mall.

Expansion into Malaysia is part of Index’s strategy of leveraging its brand positioning regionally, while Aeon plans to support its retail leadership throughout Asia.

Nur Qamarina Chew, the managing director of Aeon Co (M) Bhd, said Aeon is entering the home-furnishings market for the first time in Malaysia.

The first flagship Index Living Mall store will be opened in Malaysia next year, and 30 branches are planned by 2020.

Kridchanok Patamasatayasonthi, the managing director of Index Living Mall, said the company has strategically expanded its business abroad since 2009.

It now has eight branches outside Thailand, in Vietnam, Myanmar, Laos, Nepal and Dubai.

Its foreign operations have two key elements – product exports from Thailand and store franchising to investors or partners in specific countries.

The company will consider demand and customer purchasing power together with location and investor capabilities.

Revenue from foreign operations accounts for 10% of total sales, split evenly between Asia and other markets.

“Malaysia is the place where our joint venture with Aeon will go. We want to expand there because of the huge opportunities. The home-furnishings market is fragmented with few international brands,” said Ms Chew.

She said Malaysia’s per-capita income is double Thailand’s.

This year, Malaysia’s economic growth is expected at 4.4% to 5.2%, says Kasikorn Research Center. In addition, the Malaysian government’s policy of becoming a high-income economy is already in effect and is one of the growth drivers in the next phase of economic development.

Ms Chew said Aeon Group in Japan has placed priority on Asean due to its rapid economic growth and the high purchasing power of its people. The region has 601 million people.

At home, Index Living Mall will spend 2 billion baht to develop four new stores next year, bringing the total to 23.

Sales are expected to reach 9 billion baht this year, up by 5% from last year.

Source: The Bangkok Post

[ Go back ]

Franchise Opportunities