Long before Al-Ikhsan Sports became a familiar, even household name, among Malaysians, the sportswear retailer’s humble beginnings started out of a tiny 150 square foot kiosk in Holiday Plaza, Johor Bahru.
Founder Ali Hassan, since young, had a keen interest in sports, being an avid footballer. Even at university, he would sell sports apparels to his friends and lecturers while working part time delivering pizza.
Ten million people have walked through our doors every year
It was, therefore, a natural step for the entrepreneurial Johorean to set up shop as soon as he graduated from university.
Twenty three years later, Al-Ikhsan has expanded to 120 stores in Peninsular Malaysia, etching its reputation as a one-stop shop offering affordable yet quality sporting equipments and apparels.
“I don’t think, even our founder Tuan Haji Ali, thought that we could reach this stage,” says Vach Pillutla, Chief Executive Officer of Al-Ikhsan from his office at Taman Tun Dr Ismail.
The company, with its various concept outlets, is by far the largest sports retailer in Malaysia, commanding over 20 percent market share in the sports equipment, apparel and footwear segment.
Globally, Al-Ikhsan is the 63rd largest sporting goods retailer based on the Sporting Good Intelligence Index 2018.
“Ten million people have walked through our doors every year. To put things into perspective, almost one third of the Malaysian population visited Al-Ikhsan stores.”
Approachable and Affordable – The DNA of Al-Ikhsan
Indeed, Al-Ikhsan has become a formidable sportswear industry retailer which tends to be dominated by major international brands, with equally big marketing expenses to boot; brands which products Al-Ikhan supplies, too.
But what the company has been able to do well for many years, says Pillutla, is its ability to ‘stay close to customers’.
“The DNA of Al-Ikhsan is very simple. We offer global sports brands at affordable prices to consumers and offer it in a very, very approachable environment.”
“This is the modal that Al-Ikhsan has perfected over the years.”
We offer global sports brands at affordable prices to consumers and offer it in a very, very approachable environment
“The key for us, as managers, is to ensure that we drive this DNA right down to the last person in the company.”
Pillutla, an Indian national, was brought in early 2017 to help steer the Bumiputera retailer to greater heights, following Ekuinas taking up 35 percent stake in the business mid-2016; the company, until then, had largely been managed by the founder since inception.
“We want to get the right talent into the company and ensure that we have a stable and a very solid foundation for future growth.”
With over two decades of experience of driving retail strategy for brands like Samsonite, New Balance and Sony Ericsson in the Middle East, India, China and Southeast Asia, Pillutla’s vision for Al-Ikhsan is not limited within the shores of Malaysia.
“I think the business model of Al-Ikhsan Sports is very interesting and unique. There is opportunity to bring this concept overseas, especially in the emerging markets of Southeast Asia,” he adds, without giving out details, only that it is in the midst of identifying suitable local partners.
The next three years will be crucial as the group gears up to go public.
“We have achieved a certain level of sustained, controlled, and stable growth in the past two years. This year, we expect to see quite a bit of of expansion and we do intend to continue our double digit growth.”
Pillutla says the group aims to double its sales and increase profitability by three times over the next three years.
“We expect to achieve (our goals) over the next three years or so; once we've reached that scale, it would then be the right time for us to list.”
To achieve this target, Al-Ikhsan’s growth will primarily be driven by its three main pillars, or store concepts - Al-Ikhsan, Football Republic and its latest offering, Sneaker Street.
The group aims to double its sales and increase profitability by three times over the next three years
The Al-Ikhsan houses that carries multi sports performance brands, catering to entry to mid-level consumers, will continue on expansion mode, with the company aiming to add eight more outlets over the next three years.
“While we are strong when it comes to the distribution, there are still gaps in terms of our presence across West Malaysia. So we expect we should be able to roll out six to eight Al-Ikhsan sports store across key markets,” says Pillutla, adding that the team is still assessing viability of going into Sabah and Sarawak.
Football Republic, as the name suggests, caters to football fans by offering customise boots and apparels.
“I won’t say that Football Republic is a premium concept - it is more of a ‘destination category’ concept. The idea of Football Republic is to offer a platform for consumers to come in and experience the products, customise, personalise and also get experiences that money cannot buy.”
For instance, the Football Republic stores are catered to hosting events and coaching sessions. “We believe that these engagements can really add value to the whole experience of coming into a Football Republic store.”
“There are five Football Republic stores at the moment. We hope to set up one store in each state over the next three years.”
Al-Ikhsan Aims to List in Three Years
Sneakers Street, its very first lifestyle concept store, is catered to offering affordable sneakers and accessories, and is part of Al-Ikhsan’s bigger push into what the company calls – athleisure (sportswear as fashion clothing).
“There is a very interesting sort of convergence happening between lifestyle and sports performance that we call athleisure. That is a trend that we are seeing even in our own stores.”
“In fact, we’ve been surprised to know that the fastest growth category within our store is actually lifestyle and kids. So, we decided that this is the right time for us to make a dent in the athleisure space. But it needs to be done through a appropriate concept.”
It’s first Sneaker Street outlet, located at I-City, Shah Alam will open its doors on March 23. The group targets to set up 15 Sneaker Street outlets over the next three years.
Moving forward, Pillutla wants the the business to be tech-driven and to do so, the company is making big investments into setting up a comprehensive digital platform.
“We are in the process of implementing omni-channel and customer relationship management or CRM platforms,” says Pillutla.
“It is very important that we are engaging strongly and deeply with consumers. So, these are the kind of new initiatives that we have put in place to drive future goals of Al-Ikhsan.”
We are your friendly neighbourhood sports store. I think that’s the best way to describe Al-Ikhsan
“We are also becoming a more data-driven company. Data will be key in our business decision making moving forward,” he adds.
Even with ambitious growth plans, Pillutla reminds again the importance of staying true to Al-Ikhsan’s DNA, which is to be close to consumers - a strategy that has worked in its favour for many years.
“The idea is to take our products closer to the consumers. One of the taglines that came to my mind is that we are your friendly neighbourhood sports store. I think that’s the best way to describe Al-Ikhsan.”
“During our Chinese New Year campaign, people were telling me that they would not have guessed that we are Bumiputera retailer because our stores were decorated in red. So, we make sure the atmosphere encourages customers to shop with us.
“Come Hari Raya, you will see a totally different face of Al-Ikhsan, and towards the months of November and December, you’ll see a big chunk of the stores converting to a ‘back-to-school’ atmosphere,” Pillutla explains.
Al-Ikhsan also takes pride is its corporate social responsibility programmes, its other strategy in staying close (and giving back) to the community.
“Not many people know that we spend a lot of time and effort in doing CSR. Last year alone, we touched almost 45 thousand people across Malaysia, including orphans and people who may not have the means to go into our stores and buy our products. So, we give it to them.”
“We also conduct programmes to help teach values such as respect towards elders, honesty and integrity.”
Respect What’s Been Achieved in the Past and Build On It
When asked about his leadership style, Pillutla credits a strong and communicative relationship with Ali Hassan - who is chairman of Al-Ikhsan - as a key factor to driving the brand’s success.
“I’m very fortunate to have a very strong working relationship with him. He embodies the DNA of the company. He was the founder who had the vision to create and grow Al-Ikhsan to where it is today.”
“A lot of times, professionals will come in (to a company) and would say that whatever happened in the past is bad, and this is the new direction you need to go.”