Mohamed Mustafa and Samsudin Co Pte Ltd


 

Mohamed Mustafa and Samsudin Co Pte Ltd (MMSC), established in 1971 and located in Little India, is one of Singapore's local retail giants. Hard work, honesty, humility, and the importance of listening to customers' needs are the guiding principles behind its success. Commonly known as "Mustafa's", it was named one of Singapore's top 50 enterprises between 1996 to 2000.

Early history
MMSC was founded in 1971, by entrepreneur Mustaq Ahmad, 53, along with his father, Haji Mohamed Mustafa (b. 1916- d. 2001) and his uncle, Samsuddin. However, it was Haji Mohamed Mustafa who laid the foundations for the company.

Haji Mohamed Mustafa was born in India to a farming family. He arrived in Muar, Malaysia in 1950, and began peddling wares like dumplings, from village to village. In 1952, he came to Singapore and sold foodstuffs from a make-shift cart. When his first wife died a few years later in India, he sent for his son, Mustaq Ahmad, who came to Singapore in 1956. As he grew up, Ahmad started helping out at his father's food stall, selling tea and bread. Soon he began to sell handkerchiefs at fixed prices, next to his father's food stall.

Haji Mohamed was so inspired by his son's business acumen that he saw potential in the clothing retail business. In the 1960s, instead of selling tea and bread, Haji Mohamed's stall sold children's clothes and garments for adults. Meanwhile, Ahmad continued to help his father and uncle at their clothes' stall. As the business blossomed, the family added vests and several more items to the range.

In 1971, Ahmad expanded the family business, setting up a small 500 sq ft shop in Campbell Lane that sold ready-made garments, and naming it Mohamed Mustafa, after his father. Ahmad, became its managing director. Over the years, business expanded with the addition of more retail space along Serangoon Road, and more products sold at his store. Eventually, in 1995, it expanded to Mustafa Centre, a 75,000 sq ft department store with a 130-room hotel, along Syed Alwi Road in Little India. Well-known as an astute entrepreneur with a sensible approach to business, the unaffected and humble Ahmad is now synonymous with the Mohamed Mustafa stores in Little India.

Later developments
Over the years, MMSC went through several rounds of expansion made possible through finances from its own internal resources, and bank loans.

Today, it comprises two departmental stores-cum-supermarkets. One is the 75,000 sq ft retail space at Serangoon Plaza, while the other is its 24 hour main store, Mustafa Centre, at Syed Alwi Road. Mustafa Centre also boasts a 130 room hotel, foreign exchange and travel agency services. In total, it occupies about a sprawling 150,000 sq ft of retail space. In addition, in 2000, the company bought a S$33.5 million freehold site in MacPherson to build a 120,000 sq ft warehouse and showroom on it. Famous for its fair prices and wide range of goods, MMSC generated sales of S$302 million from its sale of over 100,000 types of products in 2003.

The company has ventured into regional expansion as well. In 2000, it opened its first outlet outside Singapore, in Chennai, India. An 8,000 sq ft jewellery shop called Mustafa Goldmart, it is housed in a 16,000 sq ft building which  Ahmad had bought. There are future plans to set up more jewellery and department stores in the Indian sub-continent under the right conditions. In 2003, it paid S$15 million for a building in Jakarta, Indonesia, that stands on a 33,000 sq m plot of land. Rent paid by tenants in that building acts as another income source for the company.

The company launched a successful online store on its website in mid-1999, but had it discontinued by the end of 1999 after incurring losses caused by credit card fraud. Despite this, it plans to use the internet to expand overseas via franchisees through a business-to-business (B2B) e-commerce system. The franchisees could buy from the company and sell to retailers, or set up shop themselves with goods ordered from them. Either way, it will free the company from collecting online payment from final buyers, which was the cause of its security problems with its online store.

In June 2003, Mustafa became the first and only major department store in Singapore to open 24-hours. This attracted widespread media attention, and increased its customer base by at least 20 percent. Foreign tour operators like Jakarta Express, regularly bring tour groups from Indonesia to enjoy night shopping at the stores.

The company also plans to open a new business in June 2004, selling groceries, clothes and other items in bulk quantities at low prices, at its completed MachPherson warehouse. Ahmad wants to introduce the successful warehouse club concept in the United States to Singapore. Stores such as Costco and Sam's Club there offer their members bulk quantities of goods at discounted prices. 

Reasons for strong business performance
The Mustafa stores are well known for selling products catered to a wide variety of needs and people. It has products for the entire range of people, from the construction workers to the well-to-do. The store stocks more than 120,000 items, ranging from ready-made apparel to jewellery, sundry items and household goods to luggage bags and electronics. The company conducts regular consumer surveys and market research to know what people want in order to cater to their needs. Hence, its product mix changes with customer needs.

Prices of products sold at Mustafa are lower than its competitors with a profit margin not exceeding 15%. The lower prices are possible because of the huge turnover. Goods are imported directly, eliminating the need for middlemen. They are bought in much bigger quantities, so lower prices can be offered. The goods are bought at the cheapest possible sources, from countries such as Malaysia, Indonesia, Thailand, Hong Kong and Singapore itself. It is this simple business strategy that has worked for the company since its beginning: "to buy and sell at the lowest prices possible".

Hence, it is this wide range of products at reasonable and fair prices that attracts people to its stores. On any given day, it sees an average of 15,000 customers. Its customer base is made up of 60 %.  Singaporeans, both locals and expatriates, and 40 % tourists. In terms of ethnicity, Indians form about 65 per cent of its customers. These satisfied customers give the stores much needed and appreciated word-of-mouth publicity by recommending them to others.

Timeline
1971 : The first Mohamed Mustafa shop was set up at Cambell Lane, a development of the family's sari stall originally at Buffalo Road.
1973 : Expansion at Serangoon Road with electronics included in the range of goods.
1978 : The first department store in Singapore to computerise its operations
Dec 1985 : Mustafa moved to Serangoon Plaza along Serangoon Road, after the government acquires its shops for conservation.
Aug 1994 : The first department store in Singapore to launch a mail-order business
Apr 1995 : Established Mustafa Centre along Syed Alwi Road. Besides expanding its shopping area, it included a 130-room hotel.
Mid-1999 : Launched its online store
Jun 2003 : The first local department store to open 24-hours for business

Awards
The store has made it to the annual Enterprise 50 (E50) awards list for 5 years, from 1996 to 2000. The awards, established by Business Times and Accenture, with support from the Economic Development Board (EDB) give recognition to local, privately-held companies that have made vital contributions to Singapore's economy. The Enterprise 50's inaugural list was published in 1995, and has since become one of the most definitive list of the fifty most enterprising, local companies in Singapore.

On March 25, 2004, Mustaq Ahmad was named Tourism Entrepreneur of the Year by the Singapore Tourism Board (STB). This is because, according to the STB, Ahmad has contributed greatly to Singapore's tourism industry, as his stores have become a must-visit destination for the 300,000 Indian tourists who visited Singapore last year.

Addresses
Head office: Block 668, #02-18, Chander Road, Singapore 210668.
Main store address: Mustafa Centre, 145 Syed Alwi Road, Singapore 207704.
Branch: Serangoon Plaza, 320 Serangoon Road, Singapore 218108




Author
Nureza Ahmad



References 
Andersen Consulting, The Business Times & EDB Singapore. (1998). Enterprise 50: Celebrating Singapore's enterprising spirit. Singapore: Epigram.
(Call no.: RSING 338.74095957)

Bhalla, S.T. (2004, March 25). Retail therapy round the clock. Today, p. 40.

Bhalla, S. T. (1997, June 28). Megastore for India, from Singapores Little India. The Straits Times

Bhalla, S. T. (1994, September 23). CK Tang of Little India to expand. The Straits Times, Life!, pp. 1-2.

Ho, K. (2001, July 29). Big man in Little India. The Straits Times

Khalid, A. (2003, September 27). $250m annual sales but no plans for Mustafa Centre to go public. The Straits Times

Koh, E. (1999, December 13). Mustafa let down by e-commerce. The Straits Times.

Mustafa Centre closed after its founder dies. (2001, July 18). The Straits Times.

Rashiwala, K. (2000, August 4). Retailer Mustafa to develop S$52m MacPherson warehouse. The Straits Times.

Rashiwala, K. (1997, December 10). Mustafa to spend S$25m on store expansion. The Straits Times.

Sim, G. (2004, March 26). Next: buy in bulk cheaply from Mustafa's. The Straits Times, Home, p. 6.

The man who built Mustafa Centre. (1996, November 30). The Business Times

Yeow, P.L. (1999, May 30). Now Mustafas doing roaring business online. The Straits Times.

Enterprise 50. (n.d.). Winners. Retrieved on 20 March, 2004 from www.enterprise50.org/year2004.htm

Mustafa online. (n.d.). Mustafa profile. Retrieved on 19 March, 2004, from www.mustafa.com.sg/history.asp



The information in this article is valid as at 2004 and correct as far as we can ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.

Subject
Commerce and Industry>>Trade
Business, finance and industry>>Business organization>>Business enterprises
Business enterprises--Singapore

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