Mustafa Center: Singapore’s All-in-one Retailer

Essay by EssaySwap ContributorUniversity, Master's February 2008

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Mustafa Center: Singapore’s All-in-one Retailer The first shopping Mustafa Center was established in 1971 in Little India. The store was founded by Mustaq Ahmand. The purpose of the store was to sell ready-made garments. In 1973, a 900 Square Feet Shop space was rented. Electronic Items were added on to Mustafa Center range of products. A second store also 900 Square Feet was rented beside the first shop to accommodate growing customer traffic. Along with it, more products were sourced from overseas to give customers a wider selection of goods. The choice of new products based on what customers wanted.

In 1985, the government acquired the shops for conservation; Mr. Mustaq Ahmad looked at several areas and decided to set up shop at Serangoon Plaza. A bold decision since Serangoon Plaza was located away from the main shopping belt in Little India; however, Mr. Ahmad went ahead to rent a space of 40,000 Sq.

Ft. on the ground floor of the building.

The store became an immediate success, and more space was rented within the building to accommodate the growing clientele. With this in mind, and also considering the rental projection, Mr.Ahmad thought it would be best to own his own premises to maintain his business strategy.

Mr.Ahmad started to look around, and found some old shop houses along Syed Alwi Road, which were reasonably priced and not far from his store, just around the corner from Serangoon Plaza. He bought them one by one until he bought the whole row. Putting up a large Shopping Center in a side road out of the traditional shopping area was a very brave decision. After 2 years of careful planning, he decided to go ahead to put up his own building.

In April 1995, Mustafa Center became a reality and immediately became a Shopping Paradise to many people. Weekends, the store packs in over 15,000 customers of all nationalities.

With the exposure in the T.V programs "Money Mind" and "Money Week" and reports in the local newspapers gave Mustafa greater exposure. With this support, the crowds continued to come to the store. A popular meeting point for families on weekends and holidays.

Today, customers can get almost anything from over 90,000 items displayed on four levels covering an area of 70,000 Square foot within the six story building which houses a hotel with 130 tastefully furnished rooms that say "Shop and Stay" under one roof. The business concept of offering other services such as Foreign Exchange, Travel, and a Hotel, has helped in contributing to the growth of the business.

These customers related services under one roof have become synonymous with tourists from India, Pakistan, Bangladesh, Sri-Lanka, and Asia. And lately there has been an increase in customers from the Middle East, North Asia and also Europe. It is also popular with expatriates, made known to them through the Mustafa Mail Order Catalog, and recently Mustafa was the first major department store to get on the INTERNET.

Mustafa center’s EDLP policy and the breadth of their product variety has made it one of the most successful businesses in Singapore. The markups in the store are much lower than those of the competition going from 10 to 30% gross margins. To assure competitive prices the company does sourcing all over Asia buying directly from the manufacturers to eliminate intermediaries.

What makes Mustafa center unique in their positioning is that they are able to have better prices than department stores by avoiding huge overhead costs and that they have a greater product line than small stores which are regularly able to sell at low prices.

The store also combines their every day low prices policy with a great variety of complementary services, which range from money exchange and a travel agency to a hotel and a grocery store all in one. This provides their customers with a one stop-shopping concept that they have grown to accept and expect.

Communication efforts at Mustafa are very limited because they believe that their responsibility is to sell products in their store not to promote them outside the store and that t one who is responsible for the promoting of a product is the manufacturer or that distributor not them. In a sense this is true because if they continue to generate traffic to their store by offering a wide variety of products at low prices the costumers will end up at the store looking for the products without necessarily being sure that thy are being offered at the store.

As long as Mustafa center is able to be recognize as “The place to shop for anything and everything” people will continue to visit from different countries to buy their products in large amounts. It is safe to say, do to the large amount off tourist that buy in their store and the large amount of money that they spend (often 4,000 to 5,000 dollars) that they provide both an option for the consumers and for the smaller retailers that need to buy at accessible prices from wholesalers.