Panasonic managing director Cheng Chee Chung outlines the company's 'secret', things that keeps Panasonic Malaysia going and what it likes working with the Japanese.
Q: What is Panasonic’s ‘secret’?
A: First of all, I think I need to explain Panasonic’s operations in Malaysia. Panasonic Malaysia is the sales and marketing company for Panasonic products in the country and there are 20 companies (all together) nationwide.
We are also one of the companies (responsible for doing the sales). Most of the other companies are manufacturing companies. We have a big air conditioner plant in Shah Alam, a TV plant and a small appliances factory. The only factory that is listed on Bursa Malaysia is Panamy (Panasonic Manufacturing Malaysia Bhd).
Q: And that company (Panamy) has a 40 per cent stake in Panasonic Malaysia?
A: Yes, and I sit on the board (of Panamy), while the MD (managing director) there, sits on our board.
We have a solar panel plant in Kulim, Kedah. We have our audio visual plant in Johor. So our operations (in the country) are quite big. Coming back to Panasonic Malaysia, we were established 40 years ago in 1976. In the last few weeks, I was interviewed by Japan Times. Next year is Malaysia’s 60th year of independence and next year marks the 60th year of Malaysia-Japan diplomatic relations. Therefore, Panasonic also had an interview (with Japan Times) in conjunction with our (Panasonic’s) 40 years in Malaysia.
We also have the biggest distribution channels. We have over 1,000 accounts nationwide — from big mass merchandisers like Aeon, Harvey Norman, Senheng (which is now the biggest series retailer).
Our Panashop, one of our unique channels, is a shop that sells only Panasonic brand products.
Q: This Panashop is owned and operated by Panasonic?
A: No, it is independently operated. Now, there are 140 accounts and 304 outlets of Panashop nationwide. Why 304 outlets? This is because sometimes one account has a few branches.
Of course, we have air conditioner specialists and photoroot dealers, and those are the photo shops. We deal with the electrical construction material channel. They sell wiring and also ceiling fans and home showers as a package.
Because of this 40-year long history, we have become a household brand. People of my age — and I am 50 years old this year — we grew up with Panasonic. In those days, Panasonic was known as National (the brand). The National rice cooker is very popular, from villages to towns, everybody used to have National rice cookers in their homes. We dare say that most households in Malaysia have somehow, in one way or another, experienced using our products.
Q: Basically, the Panasonic brand, or previously known as National, has touched the hearts of most Malaysians.
A: Put it this way… We are part of their daily lives. Look at it this way, Malaysia celebrates its 60th year of independence next year. We have been here in Malaysia for 40 years. We are part of Malaysia’s journey as a country moving forward. We always said we are a household brand in the CE (consumer electronics) industry. And, of course, throughout these 40 years, there have been many ups and downs. We grew from RM46 million (in turnover in 1976) to RM1.65 billion (last year). There are times we are up; there are times we are down. The world economy sometimes impacted us. For example, we had three crises. In 1987, the commodity collapse. In 1997, the Asian currency crisis, and in 2008, the Lehman Brothers shock. These are all global events that impacted the world economy. Most of the time, after we grew our path, then the crisis would come.
We would go down a bit, and then we go up, go down a bit, then go up. But now, we have reached RM1.65 billion in turnover.
Q: What keeps the company going all these years?
A: Of course, one is the trust that we have built with our consumers. We are a brand that is known for its durability, good quality, and some people have been using our rice cookers, TVs and air conditioners for 10 years and are still using it. It’s the trust and durability that people are talking about those days and the brands Panasonic and National stood out. People always linked us to quality and durability. So, therefore, people continuously use our products. If a product’s lifespan has ended, then they will replace it with our products. The loyalty lies there.
Q: One of the things that probably keeps Panasonic going is the innovation.
A: Well, of course, we have big operations here in Malaysia. But when we look globally, Panasonic is always thinking about the people. Our internal mission here in Panasonic Malaysia is to enrich the lives of Malaysian families by promoting eco, healthy and comfortable lifestyles. Globally, our brand promise is a better life, a better world. We always strive for this promise. So, therefore, along that line, when we look at the lifestyle changes in people, we always look at how to develop a product that can meet the changing needs of the people to fulfil their current lifestyles. And this is an ongoing thing that we do. We have invested in our research and development (R&D) centre in Malaysia to especially carry out that kind of R&D.
The main R&D centres are all based here (in Malaysia). These centres cater for all the regions. When we are invited to invest to build a manufacturing plant here, we are also expected to export. Our products are manufactured in Malaysia and by Malaysians. Products are developed by local engineers and exported to over 100 countries in the world, which include more advanced countries, in Europe, and then back to Japan.
Q: How many countries are your products exported from here?
A: Over 120 countries.
In that sense, if our products can meet the stringent requirements of more advanced countries, obviously, we have the capabilities to introduce good products to Malaysians.
Q: What are the challenges faced by the company and how do you overcome them?
A: Competition has always been there. When we were at our younger days, we fight among the Japanese (brands) like Sony, Toshiba, Hitachi and Sharp. Then, of course, as we go along, some local brands came up, like Pensonic and Elba, and then 10 years ago, Korean brands also came in. Then, people talk about Chinese brands and now, maybe Indian brands too. Competition has always been there, but built from this foundation, Panasonic, globally, by 2018, is going to reach 100 years old.
For our company to survive and reach 100 years, we have to have a strong base. So, when a lot of competitors get keener, we just need to work harder. Key point is how well we are able to meet what the customers want. That’s more important.
Even though you make a very simple electronic consumer appliance, the needs are changing. For example, washing machines. In those days, if it can just wash clothes, it would be okay. These days, people are looking at the consumption of water and electricity and washing different types of fabric, whether the washing machines are smart enough to determine how much detergent you need for that load and the duration of the washing. So, we always need to understand what customers need so that we are able to provide. Again, the lifestyle of the people is improving. Their demands are changing and they are more health and environment conscious. Knowing that, we need to keep up with their needs. Our engineers need to consider what kind of next generation product that they need to produce.
Q: Are you the first Malaysian to head Panasonic?
A: No, I’m the second one. Before me was a Japanese and before that, a local.
Q: How does it feel like to run a Japanese company?
A: Good question. A lot of my friends say I’m a half-Japanese. I joined this company at the end of 1989. Come November, it will be 27 years since I started in Panasonic. At the time when I joined, I was working at a factory along the Federal Highway, opposite the Motorola building. There was one air conditioner plant, and, now, the Mah Sing Group (a property firm) is there developing the Icon City. When I joined, I was a HR (human resources) guy (in charge of) recruiting people. That’s my first job with Panasonic. My first job was with Public Bank. I am a Universiti Malaya (UM) graduate. I was an economics major in business administration. While I was studying in UM, I was awarded a Public Bank foundation scholarship. Upon graduation, I was bonded with Public Bank and I had to work for them for five years. But, I worked seven months before I quit. So, I had to repay Public Bank the money.
Q: You don’t like to work at a bank?
A: No, I was born in and grew up in KL. I’m a KL boy. Back then, if you worked at a bank, doing public finance and so on, you are subject to being transferred and promoted, and that sort of thing. So, during my first job (with Public Bank), I was assigned to work at the Seremban branch. At the time, I was a young boy (and) didn’t own a car and had to work in Seremban. So, I couldn’t get back to KL and had to stay in Seremban. I would finish work at 5.30pm every day and had nothing to do. I just stayed in a room that I rented at the time. In Seremban, after 8pm, it’s very quiet. I went to watch movies, but the selections were always the same and it doesn’t change every day. So, I watched the same movie at the cinema every day. There was nothing else to do.
After a few months, my manager said: “The HQ wants to transfer you.” I asked: “Where?” He said: “Triang.” At that time, I didn’t even know where Triang was. I had to open a map to find out where Triang was. During that time, there was no Google. So my boss opens up a map and said: “This is Triang. You should report there next month.” I said: “No, please, I don’t want to go to Triang because, as it is, Seremban is already half-dead.” Those days, bank operations were five and a half days and open for half a day on Saturdays.
Q: When was that?
A: That was back in the 80s — 1987, 1988, 1989 at that time. I appealed strongly to my boss. “Please don’t make me go,” I said. He said: “Okay, okay, we won’t talk about it.” Fast forward three months later, another call came (to my branch manager). He said: “This time, you can’t reject. Otherwise, your future, your promotions will be affected.” So he sent me to Kuala Terengganu. More headaches. One day, a friend called from KL telling me that there’s an opening at Matsushita. I made my way back to KL (for the interview), and I even had to take a pay cut because I’d rather get back to KL.
However, I had to repay Public Bank and let go off my post. Then I started with my new work, and 27 years on, here I am. I worked at the HR (human resources) department. Two years later, the company set up a new plant in Shah Alam — the current air conditioner plant. It was the biggest air conditioner factory in the world at that time. I was transferred there. This was back in 1990 (the year it officially opened). Since I worked in the HR department, my job was to recruit, give training, remunerate and evaluate the staff. Panasonic has a strong intention to develop local people, so they set an outlook. If you need local people to run a Japanese company, the locals need to understand Japanese management. So they decided to send a few of us (to Japan). There were are about six to seven people who worked in Japan for two years. I was one of them.
I worked for two years at the HR department, where I picked up a bit of Japanese, and that’s probably the way I “turned” Japanese. I didn’t actually. I came back in 1993 and continued to work for Panasonic Malaysia for another year or two.
Then, one day, my new Japanese boss came to me and said: “I always see you like to smile, so could you please go and work at (the) sales (department).” I was transferred to work at the export sales (department) for a while, where I handled the Asian market for air conditioners only.
After a short while, they rotated me to do corporate planning because the company was expanding. I needed to consider the types of investment, which market to target and other corporate planning. After that, I was transferred to handle Malaysia’s domestic sales, focusing only on air-conditioners. In 2004, those days were very interesting. The sales company handled everything except for air conditioners. The air conditioners were handled directly from the factory, and then finally we consolidated. Then the domestic sales for air conditioners was shifted to the sales company.
Q: So, the growth revenue includes the air conditioner segment and not just the organic growth?
A: Yes, the growth is not just organic, and due to the business transfer, I was also transferred here to this sales company and was known as an air conditioner guy, moving from the factory back to the sales company. Two years later, I was given the expanded responsibility to take charge of the marketing of other home appliances and moved to AV (audiovisual) products. Then I was rotated to become head of the sales department before I was made deputy managing director. Last year, in April, I was appointed the new MD. It was very good timing to become the MD because that was when GST (Goods and Services Tax) started.
Q: How is your Japanese?
A: I studied in a Sekolah Kebangsaan (national school), so I cannot even read and write Chinese. I’m fine with Malay and English. I can speak Chinese because I learned. The same goes with my Japanese. I don’t know kanji, hiragana (or) katakana (Japanese writing systems), but I can speak the language.
Q: But you could still survive the early stages in Japan without knowing the Japanese language?
A: It takes time. To pick up a language — at that time I was about 24 or 25 years old — is not easy. You have to observe, watch a lot of Japanese dramas and imitate how people talk. Slowly, you will learn. First, you will understand one word. Then, after a month or two, you understand five words. From there, you’ll pick it up.
Q: What have you learned from the Japanese?
A: Punctuality. In Japan, everything is punctual. We are not only talking about the train, the bus in Japan is also punctual. If I want to go somewhere in Japan, say I want to travel to Tokyo, I just have to refer to a book. The book will tell you how to reach on time by taking this bus at this time and then connect to this train at this time. Then change at a train station to connect to another bus and you will reach your destination on time. So there is no reason for you to be late.
For example, in Malaysia, we call for a meeting. We sit down and there is surely one or two people who have not arrived and when the meeting is about to start, we will call (the absentees) and ask: “Hey, where are you?” “On the way.” And when we ask “Where exactly?” The late person would answer: “Very near.” In reality, that person is still far away from the meeting venue. But in Japan, five minutes before the meeting starts, everybody would already be on standby in the meeting room. Nobody is late. Functions are also on time.
Also, the preparation before a meeting. They would already have given you the agenda and you want to discuss these few agendas. The Japanese will come prepared. They would have done their research so that they can conduct the meeting and have deep discussions. But for Malaysians, once you sit down in the meeting room, some still ask: “What is this meeting all about?” The culture is different there.
In general, the Japanese management, although serious, they are sincere. Very sincere. They will show you everything, just about everything. And they expect you to be like them. Because they believe in a long-term relationship.
Japan also practises lifelong employment. So, the relationship between the company and the employee is lifelong. They don’t really pay you a lot, but they do take care of your family (and) your welfare until you retire. Everything is about establishing trust and being sincere, so that we can proceed with this relationship on a long-term basis. This is their principle. All these I learned in Japan.