[KUALA LUMPUR] A discount chain with signature red storefronts has drawn legions of Malaysians looking for good deals – and made its founder a billionaire.
Eco-Shop Marketing, which operates more than 350 dollar stores across Malaysia, is on track to complete its initial public offering (IPO) in Kuala Lumpur on Friday (May 23) – the country’s biggest this year.
The listing will value the company at about US$1.5 billion, meaning its founder and controlling shareholder, Lee Kar Whatt, will end up with a US$1.15 billion stake, according to the Bloomberg Billionaires Index.
Eco-Shop’s growth over the last two fiscal years, with revenue increasing more than 50 per cent, reflects the demand for cheap everyday goods at a time of rising inflation, said Zhu Hann Ng, founder and chief executive officer of Tradeview Capital, a fund manager in Kuala Lumpur.
“Fixed-price retailers became a first choice,” Hann said, referring to the RM2.60 (S$0.61) price tag on all products in Eco-Shop stores in peninsular Malaysia. (Products sold in Malaysia’s two states on Borneo cost RM2.80.)
Lee, who’s 51, will remain in charge. He declined to be interviewed. He opened the chain’s first store in 2003 with his brother and a pair of other people. He still works out of the company’s headquarters in Jementah – a small town that’s a three-hour drive southeast of Kuala Lumpur.
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Even before Eco-Shop grew into a nationwide chain, Lee was well-known in the Chinese-Malaysian business community for his charitable engagements, Hann said. In 2023, Lee was captured on a rare photo handing a RM1 million check to the Turkish ambassador to Malaysia, meant for the victims of the earthquakes that devastated parts of southern Turkey.
Creador, a private equity firm, took a 10 per cent stake in the company in 2019, at which point it had more than 100 stores.
But Eco-Shop faces competition from established rivals, such as Mr DIY Group (M), as well as smaller upstarts run by entrepreneurs from mainland China, Hann said.
“We feel the market in Malaysia is quite saturated” and the company’s “upside is capped”, he said. Tradeview declined to buy Eco-Shop shares as part of the offering.
For its part, Eco-Shop says in its prospectus that there’s significant room to grow. It plans to open approximately 70 new stores annually for the next five years. BLOOMBERG
