What happened this past week

Positives:

  • Thailand’s July inflation remains lowish @ 2.73% YoY, up from 2.56% in June
  • ECB hints it may buy more bonds
  • Payrolls in the U.S. climbed more than forecast in July as automakers and health-care providers boosted employment…

Negatives:

  • …but the  jobless rate unexpectedly increased to a five-month high @ 8.3%
  • UK economy continues to decline, BOE keeping rates on hold
  • Korea’s July exports drop -8.8%
  • Thailand’s export figures decrease sharply b/c of Euro region crisis

Success on three fronts reflects Jay Mart’s patience

Founded in December 1988, Jay Mart Plc (JMART) began as a seller of electrical appliances with installment financing. It later expanded into wholesaling televisions, VCRs and air-conditioners. Today its flagship business is retailing and wholesaling mobile phones and accessories under all major brands. Its subsidiaries include JMT, a debt-collection business, and IT Junction, which sublets space to mobile phone retailers. CEO Adisak Sukumvitaya discusses the company’s strategy and outlook.

Our main risk is not achieving our potential, says Mr Adisak.

Please explain Jay Mart’s business model.

Jay Mart has three main businesses: retail mobile phone distribution, rental, and collection. Retail accounts for 90% of our revenue and 60% of gross profits, rental 4% and 4%, and collection 5% of revenues and 18% of gross profits. The rental and collection businesses make our business model different from that of our competitors.

We have more than 200 shops and plan to expand and renovate existing locations. For the rental business, we set up IT Junction with Big C in 27 locations, renting space to dealers who sell mobile phones, Sim cards and accessories. Thus with the combination of both retail and rental locations, we are able to reach a wide range of consumers in all income groups. This year the continuing trend of smartphone adoption has benefited us with higher average selling prices and higher margins.

For the collection business, we are managing 30 billion baht, some of it outsourced to us from other firms and 65% of which we bought ourselves. We have been operating each of these businesses for 15 years so we have developed very strong teams that can manage each business very well.

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