Challenger Technologies

[vesfreq]

Could PIC been a sales driver for the past 2 years? If so, it could be some overhang. I have seen friends who purchase computers from Challenger just utilizing the PIC scheme.

Hi,

Just my views. PIC also has a cap on claims. Possibly, there may be a spike in sales due to more businesses trying to take advantage of the tax incentive. Yet, it depends on whether businesses themselves have enough profits to utilise the PIC tax incentives. Whether business is big or small, the PIC incentive amounts remain constant per year of assessment, as per IRAS guidelines on PIC claims. Even if a company is exceptionally big, the incentive amounts won't become materially bigger. Correct me if i'm wrong.

PIC claims may not necessarily be made from IT products. If you refer to IRAS (right from the horse's mouth), it can be any qualifying expenditure which may or may not be IT related. Hitting the PIC cap is easy, but using it to offset taxable profits may not be so easy for many of the smaller companies.

There is insufficient data to conclude whether PIC has such a material impact. I tend to believe that the sales drivers lie in the boom in personal computing and accessories, like handphone, tablets and accessories. I may be wrong.

If one were to think that PIC is a primary sales driver, then the rest of Sim Lim Sq and funan should be doing exceptionally well for the past few years. Then, we should quickly start a shop in one of these malls. Just kidding.

Also, just to add, PIC happens to be one of the many schemes from government promoting investment in productivity. Spring has a number of other grants which are strangely not well promoted.

Final point is, Challenger is not the only retailer in the scene. In my reservist camp, my camp kaki works as a sales man for big players like Dell which also does direct B2B sales. If companies look to invest in IT and make use of PIC, then Challengers' share of the pie may not be as big as you think it is.

My honest 2 cents.

[vesfreq]

Yup they should have just test with Valore products for longer time and not store. Not saying that Valore product will disappear but the inventory overhang is obvious from a store to a shelve.

A yet-to-be-verified observation. The online store of Challenger might be doing well to push Valore product, much better than the physical stores.

(vested, and I might be wrong on the observation)

Hi,

Its quite tough i think. There is Qoo10, ebay, amazon and Deal. These have been around for quite a while and far more established on the online scene.

For challenger's online store to succeed, there must be something exceptionally good and attractive about it.

A search on qoo10 shows many different possible choices of handphone covers, USB cables and whatever accessories at various prices which fit budgets of most sizes.

How could challenger outdo Qoo10? Ebay, amazon and Deal are doing about the same things. Variety of goods at all kinds of prices. I doubt challenger can outdo these existing players, unless there is some very compelling selling point.

Like why people buy a ferrari over a Mclaren. Both produces super cars. As a friend was saying a Mclaren still not so atas like a prancing horse, cos Singaporeans are still quite old fashion and believe more in the prancing horse than the red boomerang. The red boomerang still sells cos of its unique appeal and value proposition. The new Mclaren 650S sells for one million at least. But a used prancing horse costs much less and still has more appeal apparently than the british boomerang (at least among my circle of poor friends).

In the same light, Challenger probably has to achieve some unique selling point which none of us would know at this time. There are many online stores and these are surely as competitive and more lower in running costs and can afford to lower their margins to close the deal. Speaking of which, even my staff started an online store on her own.

Just my 2 cents.

(not vested and not likely to be at this time)

[CityFarmer]

The company announced its final year report. A brief view here
- After previous 3 quarters of tough transition period, the last Q result seems recovering. Next year performance should be stabilizing, IMO
- Cash reserve increased from ~43 mil (FY2013) to ~53 mil (FY2014). The cash generation continue.
- Staff and rental expenses are the two key expenses to watch. The expenses are the drags on net profit in FY2014. I reckon it is common for all Singapore operating companies.
- Total dividend of FY2014 was 2.35 cents, vs the previous year of 2.52 cents. Payout ratio is ~55%. I reckon it is acceptable, upon a transition period of strategy changes.

I will hold the stake in this company, and Mr. Market seems voting the same, with price appreciating after the last report.

http://infopub.sgx.com/Apps?A=COW_CorpAn...OqZlvmUc70

[egghead]

My understanding of Qoo10 and such on-line market place is that they are not the same as a retailer having an on-line presence. The former is just a trading platform (much like SGX where all buyers and sellers come together) and the latter is only one seller. Consumers need to know the difference and its significance.

[vesfreq]

My understanding of Qoo10 and such on-line market place is that they are not the same as a retailer having an on-line presence. The former is just a trading platform (much like SGX where all buyers and sellers come together) and the latter is only one seller. Consumers need to know the difference and its significance.

Perhaps to cite an example of a co that i have seen in person. This certain co distributes a renown brand from US. At the same time, this same brand is also readily available on amazon and ebay.

You have a point about retailer with online presence being different from pure online based retailers (on qoo10 n etc). From my understanding, the pure online biz is killing those traditional brick n mortar biz with online presence. This is likely the case for certain types of consumer goods.

One of which that i can think offhand is blue tooth speaker. Consumer A sees the branded bluetooth speaker n goes to the shop n tests it out at the shop. He likes it a lot. Next thing is, he whips out the phone with a google search. He assesses the costs of buying at the shop vs online. Shop faces an additional hurdle competing with the online stall because it has fixed rentals, while online has no rentals and can afford more aggressive pricing. This is where its interesting to see whether there is consumer loyalty to the shop rather than the online retailer. While it is without a doubt that online and shop with online presence are different, there is a real trend of consumers doing a google first or referring to certain social media before whipping out the "card" for payment.

Its tough being in retail with constant pressures from labour and rental costs, plus online alternatives. Perhaps, not all consumer goods are exposed to situations of "it is cheaper online or elsewhere." Jus another view.

(not vested still)

[CityFarmer]

My understanding of Qoo10 and such on-line market place is that they are not the same as a retailer having an on-line presence. The former is just a trading platform (much like SGX where all buyers and sellers come together) and the latter is only one seller. Consumers need to know the difference and its significance.

Perhaps to cite an example of a co that i have seen in person. This certain co distributes a renown brand from US. At the same time, this same brand is also readily available on amazon and ebay.

You have a point about retailer with online presence being different from pure online based retailers (on qoo10 n etc). From my understanding, the pure online biz is killing those traditional brick n mortar biz with online presence. This is likely the case for certain types of consumer goods.

One of which that i can think offhand is blue tooth speaker. Consumer A sees the branded bluetooth speaker n goes to the shop n tests it out at the shop. He likes it a lot. Next thing is, he whips out the phone with a google search. He assesses the costs of buying at the shop vs online. Shop faces an additional hurdle competing with the online stall because it has fixed rentals, while online has no rentals and can afford more aggressive pricing. This is where its interesting to see whether there is consumer loyalty to the shop rather than the online retailer. While it is without a doubt that online and shop with online presence are different, there is a real trend of consumers doing a google first or referring to certain social media before whipping out the "card" for payment.

Its tough being in retail with constant pressures from labour and rental costs, plus online alternatives. Perhaps, not all consumer goods are exposed to situations of "it is cheaper online or elsewhere." Jus another view.

(not vested still)

Competition from online store, was there for years, but it didn't seem affecting the company biz, at least not in a big way. I reckon it might be good reasons for it.

IMO, one reason, is the convenience and choice offered by the outlets in shopping malls. Online order takes days, while outlet shopping is immediate. The key biz of the company is accessories, which are low-priced items. May be most Singaporean don't bother to wait days to save few dollars.

IMO, another reason, is the exchange and return policy and customer loyalty program. It offers a more hassle-free shopping experience, compare with online store.

I am a long-term shareholder of the company. For each review after financial report, two key focused points are
- Has the company continue to focus on accessories?
- Has the company continue to offer convenience and choice to its customer shopping experience?

(vested, and sharing views)

[CityFarmer]

Ops, I hope it isn't virus on my PC that closing threads.

I have accidentally closed this thread again, and I have re-opened it now.

If any similar happen on other thread, please PM me.

Sorry.

Regards
Moderator CF

[NTL]

My understanding of Qoo10 and such on-line market place is that they are not the same as a retailer having an on-line presence. The former is just a trading platform (much like SGX where all buyers and sellers come together) and the latter is only one seller. Consumers need to know the difference and its significance.

Perhaps to cite an example of a co that i have seen in person. This certain co distributes a renown brand from US. At the same time, this same brand is also readily available on amazon and ebay.

You have a point about retailer with online presence being different from pure online based retailers (on qoo10 n etc). From my understanding, the pure online biz is killing those traditional brick n mortar biz with online presence. This is likely the case for certain types of consumer goods.

One of which that i can think offhand is blue tooth speaker. Consumer A sees the branded bluetooth speaker n goes to the shop n tests it out at the shop. He likes it a lot. Next thing is, he whips out the phone with a google search. He assesses the costs of buying at the shop vs online. Shop faces an additional hurdle competing with the online stall because it has fixed rentals, while online has no rentals and can afford more aggressive pricing. This is where its interesting to see whether there is consumer loyalty to the shop rather than the online retailer. While it is without a doubt that online and shop with online presence are different, there is a real trend of consumers doing a google first or referring to certain social media before whipping out the "card" for payment.

Its tough being in retail with constant pressures from labour and rental costs, plus online alternatives. Perhaps, not all consumer goods are exposed to situations of "it is cheaper online or elsewhere." Jus another view.

(not vested still)

Recently I had an discussion with a relative regarding what is a good business with relatively low setup cost that we can do, both of us have no experience in retail at all. For most of the things that brought up, most can be found online, eg. clothes, accessories, books, etc. So if we start any of those, there are good chance that we will need to beat the online sellers in some way. The only business that we think that is do-able as a motar&brick store with certain barrier from online onslaught will be F&B. This is something which we think people will be least likely to order from online, except maybe those fast food.

As for Challenger, the "reversal" of Valore back to Challenger brand is telling me that their attempt to enter the "cheap?" accessory market is not very successful. Hopefully their next move will be something which will show a more positive result.

[VestedInterest]

One of the biggest bug bear of online purchases is the cost and time taken to deliver the goods. Amazon takes about 2-3 weeks. Zalora however, having a local base takes only 3 days. Challenger can do well if they can cut down delivery time to 1 day, ie same day delivery. If McDonald's can do such why not challenger. They could start their own delivery service using motorbikes! I'm sure 80% of their products can be carried on a motorbike, fruits of the miniaturization of technology.
Many retailers in the US have very little display products in their store. If you wish to view products not displayed, you go to their online stores. The stores are more like collection centers. This is another model to follow.

[memphisb]

Insider purchase by Loo's daughter
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