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The Straits Times / The Business Times News on OSIM

Hunger for success
Hunger was literally the driving force of Osim founder Ron Sim in his childhood but these days, his appetite is for the growth of his business

By Wong Wei Kong - 26 March 2004 The Business Times RON Sim never went to business school. But he has a first class honours from the university of life, if there is such a thing. Hard knocks, not professors, were his teachers; hunger and ambition drove him. The result? One of Singapore's most successful business stories, and a Businessman of the Year award as icing on the cake. At 45, Mr Sim presides over Osim International, a company he founded and heads as CEO. Last year, Osim, a maker and supplier of healthy-lifestyle products listed on the Singapore Exchange, saw a 40 per cent increase in net profit to a record $24.1 million on a 20 per cent rise in turnover to $287.4 million. Osim today sells its signature massage chairs as well as products such as blood pressure monitors, pulse massagers, hot and cold gel packs, mechanical rotary toothbrushes, hearing aids, digital thermometers, ear scan thermometers, massage mattresses, and air cushions. More than Osim's sterling results, Mr Sim is held up as the model Singapore entrepreneur: self-made, driven and visionary enough to embrace global markets and branding as key business strategies. As Singapore seeks to promote entrepreneurship, the cry is for more Ron Sims. If so, introducing hunger to young Singaporeans may be a good way to start. Hunger weighed heavily on his childhood. His father was a taxi driver, his mother a domestic cleaner. He stopped school after O' levels. After National Service (NS), he became a commissioned salesman, buying and selling household appliances. After three months, he set up his first company in 1979 with four partners. That did not work out and so in 1980, he decided he was better off going solo and started his second company, R Sim Trading Company, which retailed an array of household goods such as knives, hand-held massagers and foot reflexology rollers. 'Starting from absolutely zero base, I had absolutely nothing to lose,' Mr Sim said in an interview with BT. 'I think that entrepreneurs are very much bred by hunger or by despair or by desire. In my case, it was first hunger, to make a living, to survive, to get things going.' 'I also hit despair and difficult times but I've crossed that. Now I am driven by desire and it's about making dreams into reality. I always say, what do you live for? I'm looking for glory in terms of a sense of achievement. I would still do whatever I can to leave a legacy behind. I always say to my people, you die whether you do or don't. So why not do your best?' 'I believe that entrepreneurs are born but they can also be bred. While you can't breed hunger and despair, you can certainly breed desire.' R Sim Trading Company changed its name to R Sim & Company in 1988 and subsequently to Osim International in 1996. On July 4, 2000, it was converted to a public limited company, and the name of the company was changed to Osim International Ltd. Osim listed on the main board of the SGX on Aug 1, 2000 at an IPO price of 33.3 cents. By the end of 2003, its shares closed at $1.18, giving it a market capitalisation of $437.6 million. Very early on, Mr Sim became convinced that Singapore was too small a market for the business he wanted to build. 'The name Osim is derived from my name. Sim is my surname, the O' symbolises my global aspiration. It's about putting the globe and Sim together.' At around the same time, he also decided that he needed to make branding a key strategy. As is typical in the Ron Sim scheme of things, it was something learned the hard way. 'It's actually an evolution. When I started, I did not care much for branding. In the first five or six years, I was basically trading, just buying and selling. In 1985, I hit a very bad patch because there was a big recession in Singapore and there was intense competition and the yen appreciated. I nearly went bankrupt in 1985, 1986. 'I learnt two things during the recession. I learnt that the Singapore market is too small, and you need to build an external economy. So I went to Hong Kong in 1986, Taiwan in 1987 and

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Malaysia in the early 1990s. 'I also realised I needed to specialise. I had to shift from being a trader to being a builder. I thought the best way was really to create your own brand, create your own products, designs, concepts and services because if you can't differentiate, over time, you will lose control. As a Singapore company, we have a very small domestic market. So how can you grow if you do not build on your brand? Since 1989, when we embarked on brand building, we have grown 20 to 30 per cent.' But what does brand building mean to Mr Sim? 'The brand itself is not just a name. It's far more. To me, branding is an effort to build a reputation. If you promise, you must deliver. Branding is an effort to build reputation through the process of value and when you say value, you've got to be sure what value proposition you are making. Is it through the product, the concept, or the services? You need to consistently build and create multiple differentiations and experiences for your customers. 'The value proposition is important because at the end of the day you deliver what you have promised and if you are able to create value, you create demand, and if you create demand, I think you create a lot more cash flow. 'Branding is important because it can cross borders, cultures and business sectors, and once you establish that branding, there's a lot you can do to extend it. As an Asian company, I feel that is the way to build ourselves.' For the consummate brand builder, it's still unfinished business. 'I don't think Osim is a global brand yet,' Mr Sim said candidly. 'I think it's an Asian brand. We are Number One in Singapore, Malaysia, Hong Kong, Taiwan and possibly even China right now. In most parts of Asia that we are in, all the franchisees are doing very well. I think we are slowly making in-roads in our global brand positioning. We make our presence felt in major airlines, in airports and magazines. Give us another 10 years.' Mr Sim is naturally excited by the China market. 'Osim is not just about China but China is part of our strategy. When I first went to China in 1983, the market was so difficult. Everything was grey. It was really a controlled economy, you didn't know how to sell or whether people could afford to buy.' Osim eventually set up shop in China in 1994. 'We've been there for 10 years now. We were invited by Yaohan to set up the first shop. Our first outlet in China in 1994 did very well. In the first three years, we made money, in the next four years we lost money, but in the last three years, we made very good money. And now after 10 years we have about 140 shops and my people have a goal to establish 60 to 100 outlets a year. 'China has shifted very much to an open market economy. I think the market has taken a big jump and going forward it's actually very, very interesting. I was in China these last couple of months and every month when I was there, I'd visit about three or four cities. The growth in China now is literally across all cities, not just the major cities, and I think the potential is huge.' For Osim, the way forward is a four-pronged strategy, he said. 'We'll grow with more outlets, more products, more concepts and more focuses.' It is now in over 20 markets, of which five are under subsidiaries and the rest under franchises. 'We are incubating the franchisees very nicely. We expect them to continue to grow quite rapidly.' Apart from its health focus, Osim has branched into hygiene, fitness and nutrition. Last year, it launched the chair spa, to help people create 'space and environment' in their offices or homes. Success in business has not changed Mr Sim much. 'You worry less about money, you have more confidence. But I still say I'm the same person, and I hope to remain the same person in the future.' 'Whatever you are, stay humble, stay modest, put your feet on the ground. Those who will succeed are those who can manage their ego, manage their emotions and most importantly, their relationships. Such people will win 90 per cent of the time. 'I don't think there is any special magic to success. I believe very much that success is a function of will and determination - you need to have the courage, the willingness, the drive to get things going in the most difficult times. And the key thing is always keep an open mind. Listen first, understand first, absorb as much as you can and make a decision. 'From a leadership standpoint, it's important to lead by example. I always try to lead by example, and walk the talk. Instead of talking too much, put things into action.' While business takes him away frequently, the avid runner and father of three tries to strike a balance between work and family life. 'I actually keep very close touch with my kids. I'm lucky, my wife is taking care of the kids and that gives me peace of mind to pursue what I'm pursuing.' But even at play, the businessman in him comes to the fore. 'Do I enjoy running? To tell you

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the truth, I don't know. I think I do it more for fitness. 'I believe business is a marathon, it's not a 100 metre sprint. You better be prepared to run, there're a lot of ups and downs, a lot of bumps, small and large. One of the reasons we encouraged our people to do the marathon three or four years ago was not the difficulty of running the final race. The difficulty was waking up to run for six months before the race. That routine is really a matter of discipline. 'In the last two years, we shifted focus to the triathlon. The triathlon is a multi-disciplinary sport that advocates endurance, strength and stamina. And I think in business and management you need to have those qualities. Things don't go your way all the time.' Home | IR @ Zaobao | Member Companies | Member Stock Prices | ST / BT News | Company Announcement
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