12 The Asian Mavericks – Mr. Yeah Hiang Nam (ValueMax Group)

This is an exclusiveinterview with Mr. Yeah Hiang Nam, CEO of ValueMax Group Limited.

ValueMax Group is the largest pawn shop chain in Singapore with revenue of more than SGD200 million a year. Mr. Yeah started out as a gold trader and retailer. However, in this interview, he shared with us how at the beginning, he was able to expand his business globally into a massive gold export business. However, as he starts to realise that the macro environment is changing, Mr. Yeah was quick to pivot his business into new business segments as well.

This is a story of how we have to remain fluid when managing our business and how we can create a sustainable and long lasting empire.

This is Mr. Yeah Hiang Nam of ValueMax Group and he is an Asian Maverick.

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How did you get into the industry?

Mr: Yeah (Paraphrased):

I have started working in the gold industry since the age of 20. I started out on my own 10 years later as a gold trader, working with gold manufacturers to design and produce gold jewellery, which I then sold.

At one point, I believe most of the gold retailers in Singapore are my customers. I then venture into the wholesale business when I went to look for customers in the Middle East.

I realised that the Middle East is an extremely huge market for gold and we found a gold distributor in Dubai which wanted us to sell to them exclusively.

We ended up working with them for many years and expanding significantly. We literally hit gold in Dubai

However, we were unable to keep up with the demand internally as there is a lack of skilled workers in Singapore. So we went to Malaysia to look for satellite factories. At that time, most satellite gold factories in Malaysia are home-based craftsmen. We really help developed that industry during that period as we pushed the manufacturers to expand and match our sales demand. This was in the 1980’s.

 

When did you start venturing out into your own business?

Mr: Yeah (Paraphrased):

After working for more than a decade, I feel that there is a lack of gold design in the retail market. So I decided to venture out. The satellite factories were able to design and produce new jewellery designs suitable for the market.

However, during Iraq-Iran war, gold prices became very volatile, and many gold factories went bust. We were very fortunate, with the support of our customers, we ended up using the opportunity to expand and consolidate the market.

Another good thing that happened during the crisis is that it was very easy to find workers during that period. As our company required highly skill gold craftsmen, we were able to find many at that time who were desperately looking for jobs.

 

What happens after that?

Mr: Yeah (Paraphrased):

As the Iraq-Iran war dragged on, we saw more increased competition in the market. We found that it is no longer profitable to do business in the Middle East.

But luckily, this was the time when China was starting to rise. We had retailers and wholesalers in Hong Kong coming to us to buy gold. This was when we pivoted to start venturing into the Chinese market.

 

When did you start the pawn shop business?

Mr: Yeah (Paraphrased):

We started a pawn shop back in the 1980’s but I was not managing it directly at that time. I was still focusing on the China wholesale business. However, as China progressed, their internal factories started developing very fast and soon their factories have become very competitive to us.

The margins were no longer attractive for us to continue the China business. So at that time, I was looking at our pawn shop business and decided that it can be expanded. So we went on to get the licencing and consolidated 6 pawn shops into the ValueMax Brand.

Managing the pawn business was very simple for us as we already have the ability to value the products. However, we decided to significantly change the industry.

At that time, the traditional pawn shops were poorly run, they were typically very badly lit and not inviting for customers.

We changed our environment with very bright lighting and created an invite retail space. We also refurbished our pawn items and resold them at very good value to our customers, which generated a lot of sales. Our strategy worked and we can see that after we reinvent the market by adding the retail concept, many new pawn shops started copying our business model.

What are some of the new business venture of ValueMax Group now?

Mr: Yeah (Paraphrased):

Since we already have the money lending licence, we have started to expand more into property financing now. We found a niche here because of the new government regulation like restriction on the age of the borrowers and the debt servicing ratio requirement, many people are not able to get a bank loan on their properties. We are able to finance this group of customers as long as they have the right collateral.

Why did you choose to IPO ValueMax Group?

Mr: Yeah (Paraphrased):
……

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