Malaysia is considered to be one of the fastest growing economies in the Southeast Asia. In the last decade, Malaysia has seen active development and modernisation. This has given rise to a growing middle class with greater spending power which has created many great market opportunities. One incredible opportunity that has arisen lies in wallcoverings. The volume of wallcoverings products in the Malaysia market has grown tremendously in the last 5 years. Last year marked a record high for the entire industry based on industry data provided by the Malaysian government.
It is in this context, we were introduced to LAMEX, Malaysia’s largest wallcoverings and materials manufacturer that has consolidated itself as the country’s largest supplier by market share. The company currently serves the needs of the entire country’s wallcoverings market through manufacturing and distribution. We had the opportunity to sit down and speak to the company’s chief executive and partner, Melvin Poh, a Cambridge educated entrepreneur and investor who shares his personal insights on this rising market from his involvement.
“The wallcoverings market in Malaysia has traditionally been in relative passivity for a period of time. The penetration rate for wallcoverings was comparatively low when you examine neighbouring countries such as Thailand, Hong Kong, Japan, Korea and Taiwan. However in
recent years, the penetration rate of wallcoverings within Malaysia has increased incredibly. There has been extraordinary growth in overall market volume. Growth figures we have never seen before historically. As such, we live in incredible times for this industry. I believe many players are very happy at the moment. This is why we have seen rampant entrepreneurship in this sector as well as well as fringe sectors” said Melvin Poh.
According to Melvin Poh, these progressive developments for the market result from “a perfect storm of several factors coinciding together synergistically. Economically, the growing middle class has produced consumers with more spending power for these products. There has also been a rise of commercial developments in the country. There have been increased and aggressive competition within the commercial projects sector and property developments that have all utilized wallcoverings and other forms of wall materials as a means to achieve aesthetic differentiation. In fact, a substantial portion of company’s profits currently come from such projects. Competitively, the past few years have also seen increased price competition between many local businesses in this industry which has lowered the overall prices of wallcoverings and made it more affordable than before.”
Socially, Melvin Poh believes that the conceptions towards wallcoverings have changed significantly, stating that “there has always been commercial appreciation of these types products. There has always been strong commercial use. However in Malaysia, there had been a lack of residential awareness of these products. Traditionally, Malaysian consumers generally conceived wallcoverings as products reserved to the elite. This is partially because of how past local businesses in this industry have been exorbitantly pricing these products in an irresponsible manner for the individual consumer with profit margins as the overall driving objective. The progressive market shifts happening now have brought a more accurate and realistic conception of wallcoverings as an affordable product. It has allowed wallcoverings to reach new market segments. There has also been a lack of information and accessibility but rapid changes in technology such as the emergence of internet has largely resolved this issue.”
When asked about the future direction of the industry, Melvin Poh said “There is no doubt that the wallpaper industry in Malaysia is under active growth. In the next 3 years, we are going to definitely see further penetration and market expansion of these products within the domestic market. We are already seeing it in a very significant way from 2017 to 2018. For example, there has been 6 fold overall growth in market penetration in the past 2 years alone from 2016 to 2018. The end goal is to see the same penetration rates that we see in more developed neighbouring countries. For example in Japan, most if not all, residential and commercial spaces will use wallcoverings over paints for aesthetic purposes whereas paints are reserved for more industrial usage. This reflects the natural development of this industry. I also believe it is the responsibility of the market players to facilitate this growth. As a market leader, our company holds a great duty in ensuring that this growth is sustainable as well. This is because as the country’s manufacturer, our ultimate responsibility is really to supply to the overall market and facilitate the use of such products as a whole for the market. We have done so by our
commitment to the needs of the businesses that occupy market as well as well as our dedication to innovate ceasely.”
He explained that such innovations from the company have come in the form of researching and experimenting with industrial materials to create affordable, eco-friendly and unique wallcoverings that substitute raw materials used for walls. For example, they have succeeded in creating synthetic marble substitutes. It has also come in the form of integrating current market trends into business offerings. “There is a general societal trend towards personalisation. We see this with the internet culture. In a world of increasing homogeneity, people want ways to be distinct and to have a sense of self-identity. We adopted that understanding in an intimate way and launched a new manufacturing operation with state-of-the-art technology, whereby we can actually produce an entire textured wall-mural with an image of choice. As a first mover for this in Malaysia with these customised products, the venture has been incredibly successful. We launched this business subsidiary in January 2018 and to date, we process thousands of custom orders every month on average. This has brought residential consumers closer to us. This really goes to show that innovation has to be a reflection of society itself but also how innovation can fulfil the needs of the market and that is how you capture the market.”
Headquartered in Kuala Lumpur, LAMEX currently manufactures from several production facilities and factories located in Malaysia and is engaged in the retail, wholesale and project markets. The company actively manages its own supply chain, logistic fleet and distribute these products to businesses and property developers throughout the country as well as to 42 foreign markets in exports as of 2018. With so much going on, Melvin Poh sees more work to be done for the wallcoverings industry in Malaysia and a future of opportunities.