Integrated project final

J.MEC | FNBE0115 / AUG 2015 | INTEGRATED PROJECT

SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN

FOUNDATION IN NATURAL BUILD ENVIRONMENT

PRESENTATION TITLE: Research Assignment Report (Pawnshop)

GROUP MEMBERS:

Name Student I.D Research Report Roles.Justin Chong Yong Sheng 0322845 Cover/Research/Summary/Comparative

analysis/Presentation SlidesMichelle Wong Sook Yin 0322362 Video Editing/Bibliography/Appendix/ Table of

contentLew Quo Ming 0322884 Video Editing/ Meeting Minutes/ Job

Description/ Comparative analysisLiew Cherng Qing 0322613 History of Pawn Shop/Presentation Slide/Layout

CheckerEe Hui Teng 0322548 Video Editing/ Brief History of both business/

Interview QuestionsCham Zheng Chee 0322317 Presentation Slides/Grammar Checker/Interview

Questions/ Recommendation

MODULE: ENGLISH II / ENGLISH 2 (ELG 30605 / ENG 0205)

LECTURER: CASSANDRA WIJESURIA

SUBMISSION & PRESENTATION DATE: 26th November 2015


TABLE OF CONTENTNo. Title Page Number

1. Artistic Cover -

2. Cover Page -

3. Table Of Content -

4. Key Summary 1

5. History 2

6. Brief Description of Businesses 3-5

7. Comparative Analysis of the Businesses’ CompetitiveTraits-Comparison between both businesses-Comparative Analysis between Joo Ngien Pawnshop andChoong Xin Pawnshop-Comparative Analysis Summary Table

6

7-11

12-13

8. Recommendations 14-16

9. Bibliography 17

10. Appendices 18-35

11. Minutes of Meeting 36-38

13. Conclusion 39-40

14. References 43

15. Attachment of Slides -


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KEY SUMMARYThe PawnshopsJoo Ngien Pawnshop & Goldsmith and Choong Xin Pawnshop are the names of both of the

pawn shops that our team has decided to do more in depth research on. These pawnshops are

both situated in different states, Alor Gajah and Kota Damanasara, respectively.

The shop in Alor Gajah, Joo Ngien Pawnshop & Goldsmith, was the first pawnshop that we

visited as we planned our trip to Alor Gajah, earlier in order to avoid any inconvenience. The

pawnshop is owned by Chin Kian Ngok and his family, the third generation pawnshop owner

after Chin Kon Tow. The shop is located at Alor Gajah, Melaka and is commonly visited by

people with a middle or low income to exchange gold chains, watches and rings.

On the other hand, the shop in, Choong Xin Pawnshop, is owned by Ho Teck Keun. It is

located in Kota Damansara, and it is also commonly visited by people with a middle or low

income.

Joo Ngien Pawnshop, Alor Gajah.

Choong Xin Pawnshop, Kota Damansara.


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HISTORYPawn broking (lending money on portable security) is one of the oldest professions.

It was believed that Franciscans were the earliest pawnbrokers in the history.Franciscans were known as the people who adhere the teachings and spiritual disciplines ofSt Francis of Assisi and associates, which is Old Catholic. Even though it was a churchprohibition against usury, which is lending money with high interest, there is some evidencestating Franciscans were permitted to begin the practice as an aid to the poor.

However, the pawnbrokers of China started with a man named ‘Si Ma Xiang Ru 司馬相如’, a writer, selling his robe on the market so that he have money to make wine, andsell the wine to earn profit as well as buying his robe back. And after then, well-recognizedearliest pawnbrokers began in the 5th Century. The activity were established and operated byBuddhist Monasteries to help poor. Later, it became widely seen in the China society. Therewere some businessmen who formed partnerships with Buddhist monasteries to avoidtaxation from government.

Greece and Roman too are familiar with pawn broking, which was practiced by theirpeople, with the word ‘Pawn’ coming from a latin word ‘patinum’ meaning clothing.However, the pawn broking activities in the Western country began in Italy. They follow therules practiced by Roman. For the pawn broking of gold, silver and jewels, customers areallowed to borrow a loan up to 80% of the value; where else when pawn broking everythingelse, customers are allowed to borrow a loan up to 2/3 of the value. Interest calculatedmonthly would be 5% to 7%, however there will be no interest charged for loans up to 5 lire.Customers must pawn at least 6 months and renew up to 5 years. If it is not redeemed orrenewed within a fortnight, item will be sold. If the loan is up to 10 lire, taxation up to 1%has to be paid to the government.

Pawn broking is popular in the United Kingdom too. During the 14th to 15th Centuries,noted families became popular for their money lending. King Edward III famously pawnedjewels for the Lombard Family to help raise funds for war against France. However, in 1872,Queen Victoria illegalized pawn broking business, due to many knockoff scandals in London.

In Malaysia, however, due to multiple racial culture, pawn broking was introducedfrom both Chinese and Western influences. Malay pawn shops knew pawn broking as ‘PajakGadai Islam System (Ar-Rahnu)’. Ar-Rahnu started off by learning from the Western culture.As time passes and a new civilization of Malaysia emerged, Ar-Rahnu had to follow rulesand regulations set by Pajak Gadai Islam Ar-Rahnu scheme built on Act81-Act PemegangPajak Gadai 1972 under Section 46.

Chinese pawn shops mostly inherit and originated from the China pawn brokingsystem. But overtime, they had to follow the rules set by the government too, except privatepawn shops where higher interest rates will be charged.


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BRIEF DESCRIPTION OF BUSINESSES

A) Joo Ngien Pawnshop & Goldsmith

Joo Ngien Pawnshop is a pawnshop located at 2852, Alor Gajah, 78000 Melaka, justopposite the Alor Gajah field and there is a roundabout nearby. The pawnshop providesservice of pawning items such as gold, diamonds and watches. Customers deposit theirvaluable with a pawnbroker as security for money lent. Other than that, the business also sellsjewelleries.

The history of Joo Ngien Pawnshop was first started on the year 1938 under the company,CFL & Sons SDN BHD when founder Mr Chin Fun Luan was given the share by his boss.Chin Fun Luan migrated from China to Melaka, Malaysia and started working in a pawnshop.It was because of his hardworking spirit that gained trust and recognition from his boss. Hisboss then decides to give him a pawnshop to take care of by himself. After a few years later,his boss gave him the share and the pawnshop eventually became his as he has gained fullcharge over it. The business then became the Chin family’s family business. After runningthe pawnshop for a few years, he then invested in a new pawnshop located at Masjid Tanah,Melaka which is now the main branch of the business. Since the year 1938, the pawnshop hasbeen operating for 77 years till today. The pawnshop is now inherited by Mr Chin’s secondson, Dato’ Chin Kon Tow and the business has been expanded to have 5 pawnshops. Two ofthe branches are located in Melaka, two in Selangor and another one Johor. The main branchis located in Masjid Tanah, Melaka. All of the branches, except the main branch, arecurrently operated by the family, and Dato’ Chin’s brothers and sons are in charge of thebusiness’ operation.

This pawnshop has a total of two workers and the estimated number of customer eachmonth is around 1000 people. According to our interviewee, Mr Chin Kian Ngok, thepawnshop’s customers are mainly Malays and Indians. However, it is more accurate to saythat their customers are mostly people from a lower income family. The customers visits the


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pawnshop when they face problems with cash turnover. Therefore, they give the pawnshoptheir valuables as deposit for loan. When they have sufficient cash, they will redeem backtheir items by paying back their loan together with deposit. Joo Ngien Pawnshop charges1.5% interest to their customer per month and the redemption period is 6 months long. Theshop faces great competition nowadays as many other newcomers have entered the marketbecause the operating license is now not limited anymore and anyone can operate a pawnshop.The pawnshop’s main competitors are the banks, the other pawnshops and also illegal loansharks.

B) Choong Xin Pawnshop SDN BHD

Choong Xin Pawnshop is located at No, 32A-1, Jalan PJU 5/B, Dataran Sunway, 47810Kota Damanasara, Selangor Darul Ehsan. The first pawnshop by the company was foundedon the year 1954 by Mr Ho Ying Chai. It is located at Kuala Selangor. Our interviewee, Dato’Ho Teck Kuen was not very sure how the business was first founded because he was not bornyet during that time. However, he thinks that the business was founded by Mr Ho when hefirst came to Malaysia from China and got the chance to get familiarise with the business. Hethinks that the business creates great opportunity and that prompted him to start his ownpawnshop. The pawnshop has been operating for the past 61 years and now it has 5 branches.The branches are located at Kuala Selangor, Batang Berjuntai, Kampar, Pandan Jaya andKota Damansara.

The pawnshop is a simplified version of a financial company. The shop provides pawnservice, which is receiving deposit from customers as security to give out loans. The depositsare in the form of golds, diamonds, watches and pearls. Whenever a person needs cash, hewill bring his valuables to be pawned. The valuables is then kept by the pawnshop and he isgiven cash as loan. If he wants his valuables back, he needs to return the loan and the interest.The interest charged by the shop is 2.0% and the redemption period is 6 months long. If hedoes not have enough money to repay the loan, he can repay the interest first and the


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redemption period will be extended again for 6 months. If he has no money to pay back theloan and the interest, his valuables will then be brought to auction according to the pawnshoplaw. The money earned from auction will then be given to him. According to Dato’ Ho,around 60-70% of customer will redeem back their valuables because they pawn to solvetheir short term financial problem, not because they want to sell their valuables. Even thoughnowadays the items that are accepted as a deposit are only gold and diamonds, items such asbicycles, fountain pens and sewing machine are also accepted in the past. Their maincustomers mainly consist of people with middle range or lower range income and mostly areIndians and Malays. The valuables are then recorded in a book and stored in their safe.Pawnshops are known as a sunset business nowadays as many have never heard of it before.However, Dato’ Ho do not agree that it is a sunset business as its nature of business is toprovide money for people who face financial problems and it is essential to the business. Hebelieves that the business will not distinguish in our society but the business will not be asgood as before. The business faces great competition because the customers will be moreselective on the pawnshop. Therefore, he thinks that good customer service is most importantstrategy to face the competition and trains his workers to have provide excellent customerservice.


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COMPARISON OF BOTH BUSINESSES:Joo Ngien Pawnshop, Alor Gajah || Choong Xin Pawnshop, Kota Damansara

Comparisons Joo Ngien Pawnshop &Goldsmith

Choong Xin Pawnshop SDNBHD

Location Alor Gajah, Melaka Dataran Sunway, Kota Damansara

Founder Chin Fun Luan Ho Ying Chai

Date founded 1938 1954

Current Owner Dato’ Chin Kon Tow Dato’ Ho Teck Kuen

Items pawned Gold/ Diamonds/ Watches/

Jewellery

Gold/Diamonds/Watches/Pearls

Bicycles/Fountain Pens/ Sewing

Machines

Branches 2 in Melaka/2 in Selangor/1 in

Johor

Kuala Selangor/Batang

Berjuntai/Kampar/Pandan

Jaya/Kota Damansara

Total number ofworkers

2 6

Customer’s class Middle or lower Middle or lower

Regular customers Malay & Indian Malay & Indian

Average customersper month

1000 1500

Interest rate 1.5% 2.0%

Redemption Period 6 months 6 months

Competitors Banks/Other Pawnshops/Illegal

Loan Sharks

Banks/Other Pawnshops/Illegal

Loan Sharks


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COMPARATIVE ANALYSIS BETWEEN JOONGIEN PAWN SHOP AND CHOONG XINPAWNSHOPI ) Number of Competitors

Joo Ngien Pawnshop & Goldsmith Sdn. Bhd. is located in Alor Gajah, Melaka. Joo NgienPawnshop and Goldsmith Sdn. Bhd. has only 3 top competitors which are CIMB Bank, HockNin gold store and Maybank. However, Pajak Gadai Choong Xin (Choong Xin pawnshop)which is located in Kota Damansara, Selangor has up to 10 nearby competitors, but only 4 aretheir main competitors, which are Visiber Sdn.Bhd. , HSBC Bank, Ambank and RHB Bank.

II ) Brief Description of CompetitorsA) JOO NGIEN PAWNSHOP, ALOR GAJAH

Even though Joo Ngien Pawnshop & Goldsmith Sdn. Bhd. are located in a place that isn’t asbusy as a city, there are still a couple of competitors competing with them. CIMB Bank andMaybank in Alor Gajah, Melaka, both provide gold investment services. The customers willhave to create a Gold Investment Account “GIA” and start investing with at least 1gm of goldor multiples of 1gm gold. At the same time, customers may sell their gold to the bank to earnprofits.

The other top competitor will be Kedai Emas Hock Nin (Hock Nin gold store). Hock Ningold store is a competitor running the same pawn broking business similar to Joo Ngienpawnshop and goldsmith.

Competitors: Maybank (left), Kedai Emas Hock Nin (middle), CIMB bank (right)

B) CHOONG XIN PAWNSHOP, KOTA DAMANSARA

Choong Xin pawnshop is located in a moderate city, Petaling Jaya. It has many competitorssurrounding itself, including banks and jewelry shops. Banks include Public bank, Maybank,Hong Leong Bank, Al Rajhi Bank, Standard Chartered Bank and United Overseas Bank. Butthe main competitors are Am Bank, RHB bank, and HSBC bank. Am bank and RHB bank


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are located 250 meters away northeast from Choong Xin pawnshop, and located next to eachother. However, both RHB bank and Am bank are not as strong of a competitor towardsChoong Xin pawnshop compared to HSBC bank, due to the fact that they are competingamong themselves and HSBC bank is located only 30 meters away towards east from ChoongXin pawnshop. All mentioned banks provide gold investment service to their customers.

Competitors: RHB Bank (left), AmBank (middle), HSBC Bank (right)

The other strong competitor would be Visiber Sdn. Bhd. Visiber Sdn. Bhd. is a jewelry storethat sells common jewelry accessories, and they are quite popular.

Numbers Methodology jewellery accessories.

Numbers Methodology uses an inverted triangle and simple calculation adding up birthdates into a single digit and represents the customers’ personality number. This means, eachof the jewelry accessories are custom made and one of a kind. Numbers Methodology arealso believed to bring good luck to the customer.

Competitor: Visiber Sdn. Bhd. (left), Visiber Logo (right)

III) Nature of Market

JOO NGIEN PAWNSHOP, ALOR GAJAH || CHOONG XIN PAWNSHOP, KOTADAMANSARA

The nature of the market for Joo Ngien Pawn Shop & Goldsmith and Choong XinPawnshop Sdn Bhd is monopolistic competition as both businesses operate differently from


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other businesses in the similar market. Both of these businesses sell unique products and isalways changing constantly. Besides that, the pricing power of monopolistic competition isweaker as this type of business does have the full ability to charge the price higher than themarket price. In order to maximize their profit, these business strive to differentiate theirproducts from that of their competition which is other pawnshops or even banks.

IV) Competitive strategies

A) JOO NGIEN PAWN SHOP & GOLDSMITH

Experience

As Joo Ngien Pawn Shop & Goldsmith is a more traditional pawn shop, they rely mostly onexperience to determine the quality, price and exchange value of the specific item. Eventhough technology is so advanced these days, Joo Ngien Pawn Shop and Goldsmith’s staffstill believes that the best technique for this specific business is their decades of experience.

Knowledge

Staff at Joo Ngien Pawn Shop and Goldsmith are trained to be very knowledgeable abouteverything that is going on in the pawnshop. Information about the shop, pricing of the itemspawned, interest rates as well as the redemption period are the most common questions askedby customers.

Economy condition

The staff at Joo Ngien Pawn Shop and Goldsmith fixes their price based on the economycondition, this is to ensure that their customers won’t be affected too much by the economy’srise or fall when it occurs. By doing so, the customers are more attracted to come to JooNgien Pawn Shop and Goldsmith compared to other pawnshops that fix their prices.

B) CHOONG XIN PAWNSHOP SDN BHD

Customer service

The staff at Choong Xin Pawnshop Sdn Bhd treats their customers very well. If there wereto be any questions asked by the customers, the staff will try their best to accommodate totheir customer’s needs. For them, the customer is always right and they take appropriateactions to make the customers happy.

Security

The safety vaults in Choong Xin Pawnshop Sdn Bhd are well-equipped with the bestsecurity system to ensure that everything in the vault such as gold chains, watches, pearls etcare protected 24/7 behind those stainless steel walls.


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Technology

Due to the advancement of technology in today’s era, the staff at Choong Xin prefers to usetechnology in their aid to determine the price and quality of the pawned items. For them, theythink that the fake items in the market today are really identical compared to the past,spurring them to use up to date machinery.

V) Barriers to entry

A) JOO NGIEN PAWN SHOP & GOLDSMITH

Competitors

As Joo Ngien is more of a traditional pawn shop, the customers of today would feel thattheir methods are too old-fashioned, causing them to go look for other pawn shops, banks oreven illegal loan sharks to do business with.

Bank Interest

For every item that they sell, they are required to provide 1 % of their earning profits to thebank as part of their contract with the government. Making it one of their major obstacle inrunning a pawn shop business.

B) CHOONG XIN PAWNSHOP SDN BHD

Competitors

Similar to any other pawn shops, most customers in this day and age would rather go formore advanced method of trading comparing to the old-fashioned way. As more and moreplatforms of trading and selling causes more obstacle for Choong Xin Pawnshop Sdn Bhd torun their business. Other competitors such as banks, online trading, and illegal loan sharksusually are the main obstacles for running a pawn shop business.

Technology cost

Given that the countless amounts of counterfeit items and fake replicas that are being madethese days have been constantly increasing, Choong Xin Pawnshop Sdn Bhd have decided touse high end technology to assist in determine whether the item is legitimate or a counterfeit.However, this type of technology cost quite a small fortune as it cost quite an amount to bemade and also requires servicing every few months.


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COMPARATIVE ANALYSIS SUMMARY TABLE

Competitive Traits JOO NGIEN PAWN SHOP &GOLDSMITH

CHOONG XIN PAWNSHOPSDN BHD

1. Competitors 3 to 5 within the immediate area 5 to 8 within immediate area2. Competition

StrategiesExperience Traditional Pawnshop Experience to determine

quality, price and value Best technique for the

business

Knowledge Staffs are well-trained and

knowledgeable Knowledgeable about every

item in the Pawnshop Using the knowledge to

assist in the business

Economy Condition Fixes the price based on the

economy’s condition Ensure customers are not

affected by the economy’scondition

Attract more customers dueto having better pricescompared to otherpawnshops with fixed prices

Customer Service

Main priority

Staffs treat the customersvery well

Do their best toaccommodate to thecustomer’s needs

Security The safety vault is very

well-equipped with the latestsecurity system

To ensure the safety of thegoods stored there

Protected 24/7

Technology Prefer to use technology to

aid in their business To assist the business to

determine the price andquality of the item.

Easier to differentiate fakereplicas compared to usingthe old traditional way

3. Barrier toEntry

High Barrier to Entry

Competitors

Customer of today wouldfeel that the methods theyuse are too old-fashioned

Will prefer to go for otherpawnshop or banks due to

High Barrier to Entry

Competitors

Most customers wouldprefer a more advancedmethod of trading

More and more platforms fortrading in this day and age

Main obstacles are usually


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the old-fashioned way

Bank Interest

Required to provide 1 % oftheir earning profits

Part of their contract withthe bank

Major obstacle in runningthis type of business

from their competitors likebanks and loan sharks

Technology Cost

Technology helps indetermine the item iswhether legitimate orcounterfeit

Requires a small fortune tohave one

Also requires quite a sum tomaintain the machine as itrequires servicing time totime

4. DifferentiatedorStandardizedProducts

Differentiated Products

As this type of businessoffers various types ofproduct.

Differentiated Products

As this type of businessoffers various types ofproduct.

5. Pricing Power Price Taker

Weak Pricing Power

This type of business doesnot have the full ability tocharge the price higher thanthe market price

Price Taker

Weak Pricing Power

This type of business doesnot have the full ability tocharge the price higher thanthe market price

6. Nature ofMarket

Monopolistic Competition

As there is only onepawnshop in that area, thepawnshop market in generalis very low.

Monopolistic Competition

As they is only onepawnshop in that area, thepawnshop market in generalis very low.


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RECOMMENDATIONSAfter carrying out our studies regarding our business, there are some issues that can beimproved in order to allow their businesses to perform at its best. The list below shows a fewrecommendations that can be taken to enhance both pawnshop’s future performance in theircareer.

Joo Ngien Pawnshop, Alor Gajah || Choong Xin Pawnshop, Kota Damansara

1. Brand RecognitionCurrent condition:

In Malaysia, pawnshops often reside in low-income neighborhoods to cater to people downon their luck. Even though the pawnshop provides a quick and hassle free way of tradingvaluables for cash to get people through to pay-day, they are lacking in terms of advertisingtheir brand to the public. Nowadays, we barely see promotions or advertisements aboutpawnshops anymore. Both pawnshops did not focus on the advertisement of their shop. Thisresults in the unawareness of the public, especially the younger generation not knowing howdoes pawnshop actually works because it was never properly introduced to them.

Recommendation:

Both pawnshops should package themselves properly. The pawnshop owners must exposethemselves with the current modern technology. This way, they are able to widely promotetheir brand and slowly become recognized by the public. For example, owners can create awebsite to introduce what their pawnshop is all about, advertise events and promotions andannounce products that are available for sale. They can also highlight their specialty areas,such as coins, jewelry, watches, gold and include links to information about their product’shistory, manufacturer and also production methods. Pawnshop owners can even includecoupons and incentives for customers to visit. They can announce visits by appraisers andantiques experts so that customers can plan to bring their items in for appraisal. Owners ofthe pawnshops can also share their expertise by offering classes on coin collecting orrecognizing rare antiques, gold, and other items.

2. Changing PerceptionsCurrent condition:

When we talk about pawnshops, it is often being related to the ritual reserved only to low-income workers. This perception has become a major issue for both pawnshops as it becomesthe obstruction of their businesses from propelling forward. The perception that has beeninstalled into people’s minds are that pawnshops are only meant for people coming from alow-income background. It is a false perception and it’s a perception that must be changed inorder to see the variation of customers and generally the development of both pawnshops.


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Recommendation:

It’s important that the public are aware of what pawnshops can offer in their business. Oneof the ways to expand the range of customers in pawnshops is to promote their brand namethrough any form of media. The public needs to know the pawnshop’s real objectives andpurpose in order to attract new customers. Another way to change people’s perception is bywidening the range of items that can be pawned. In the past, pawnshops used to have a widerange of items that can be pawned. Other than gold and diamonds, items like bicycles, sewingmachines, even branded pens can be used to pawn. But nowadays, pawnshops in Malaysiaare limited to only a few main items that the customers can pawn, which are gold, watchesand diamonds. Therefore, the owners of pawnshops should really reconsider of bringing backthe past generations way of dealing with pawn items. Owners can reconstruct their system,organize their business structure systematically, and categorize pawn items in order to expandthe range of customers. By pawning items like antiques, people’s lives become easier interms of financial strain. Environmental factors could even be incorporated in a pawnshop’sbusiness through collaborations and proper planning of the whole business structure. Thisway, pawnshops will be recognized by the public with the change of perception towardspawnshops businesses. Thus, the people have more options than they may think after lookingat what pawn stores can offer.

3. Customer Service

Current condition:

The workers in both pawnshops do their work accordingly with mainly one objective, whichis focusing on the increase in sales of the shop. This is the reason why both pawnshopsbusinesses only standstill as there is no progression in their businesses. When there areproblems like other competitors, both of the pawnshops solve the problem by makingadjustments with the rate of exchange. But by doing so, it doesn’t really help in improvingtheir businesses. One issue that pawnshop owners always neglect is the importance ofcustomer services, which becomes another reason why the performance of both pawnshopsbusiness are always stationary.

Recommendation:

All businesses can be benefited by providing exceptional customer service. Pawnshopowners can review the basics of good service with their staff and train them on the store’slending and return policies. Owners must ensure that they understand the laws governingpawnshop transactions so that they can convey them to customers. Another thing pawnshopscan do is always ask for customer feedback following a sale or service transaction with afeedback card. They can even include space for an email address so that pawnshop staffmembers can notify the customer about events, promotions and items of interest that becomeavailable for sale.


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4. Image Management

Current condition:

The exterior and interior look of both pawnshops isn’t that attractive. The design of bothpawnshops are done in a conventional way, which is normal looking. It reflects on how theowners are not really particular with the design of their shops. Even though the functionalityand security of the shop are done properly with the systems serving its purposes, but bothpawnshops took for granted of the packaging of their shop in terms of attractiveness.

Recommendation:

The first impression of the pawnshop to the customer is very important. Most of the peoplealways judge a book by its cover,that is why it is important to take note of the environment ofthe shop. Potential customers who see a dusty window crammed with items as they pass bythe store may just keep walking, whereas an attractive entrance beckons them to go inside.Thus, pawnshop owners should give their shop a fresh look with paint, a window displaywith items organized by category and signs promoting your specialty items. Other than that,pawnshop owners can even add a new pawnshop sign, polish their old ones, and alsosubsequently carry out maintenance for their shop. After customers step inside, it is importantto treat them to a clean, well-lit store with items clearly marked and sorted by type.


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BIBLOGRAPHY1. Baye, M. (2003). Managerial economics & business strategy (4th ed., p. 578). Irwin,

Boston: McGraw-Hill.

2. Diana, C. (Ed.). (2013, September 12). The pawn industry: Quick money at a price.

Retrieved November 23, 2015, from

http://www.freemalaysiatoday.com/category/leisure/2013/09/12/the-pawn-industry-quick-

money-at-a-price/

3. Doyle, P., & Stern, P. (2006). Marketing Management and Strategy (4th ed., p. 446).

Harlow, Essex: Pearson Education.

4. Heath, R. (1998). Crisis Management for managers & executives (p. 466). London:

Financial Times.

5. Keh, H. (2004). Strategic Asian Marketing: An Essential Guide for Managers (p. 269).

Pearson Prentice Hall.

6. Little, P. (1977). Communication in business (3rd ed., p. 345). Harlow: Longmans.

7. Lucas, R. (2009). Customer Service: Skills for Success (4th ed., p. 294). Boston: McGraw-

Hill.

8. So, Y. (2006). Explaining Guanxi: The Chinese Business Network (p. 169). London:


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APPENDICESAlor Gajah Pawn Shop:

Joo Ngien Pawnshop Exterior Shop House Image

Location: 2852 Jalan Besar Alor Gajah, 78000 Alor Gajah, Melaka

This is the exterior of Joo Ngien Pawnshop where the signboard can be seen hanging abovethe area of operation.

The pawnshop is located in a row of shop houses where the business is carried out on theground floor.

This is the row of shop lots where the pawnshop is located.

It is located in an area that has no other pawnshop nearby. This means that they can avoidcompetition in that particular area.


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Alor Gajah Pawn Shop:

Joo Ngien Pawnshop Shop Name & License


The pawnshop’s plaque hangs in front of the office since the beginning of the business.

The shop’s license is hung in the owner’s office to show that the pawnshop is a legal operant.

The license states all legal information needed in order to operate the shop.


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Joo Ngien Pawnshop Shop’s Outer Area (Operating Area for Customers)


These are examples of where the gold are placed and arranged for sale to the public.

The gold placed here does not belong to customers who have placed their gold for loan. Thegold now belongs to the pawnshop and the pawnshop can sell the gold to customers.

This is the placement of the gold which is placed in the outer area of the store.

There is a barrier between the outer area and the interior part of the store.


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These are where the customers bring their gold to be set on loan. They are only allowed to beat the outer part of the pawnshop.

The transaction is carried out from the inside and outer side of the store which is separatedfrom each other.

This is an example of the interaction between the customers and the pawnshop worker.

The workers are only allowed to interact using a small sliding glass door under the barriers.The interaction between them is strictly for trading using valuables such as gold, watches andother valuable items for money only.

They are also allowed to sell the available gold placed on the display set to customers throughthat small sliding glass door.


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Joo Ngien Pawnshop Interior of the Pawnhop


This is the inner counter which is a high table top placed with equipment such as a specialweighing machine for gold which is used while trading.

The people on the inside are able to look outwards whereas the people on the outside are notable to look inside due to the difference in height.

This is another area of the inner part of the shop where the printing, accounting and otherpaperwork are carried out. The back part leads to their office and safe which is confidentialand cannot be seen by outsiders.


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This is the part of the shop where gold can be sold to the public is located. This is area wherethe workers stand to carry out trading or sales.

Workers only operate from the inner part of the pawnshop. They do not operate outside as theouter part is meant for customers to make sales or trading only.

There is a cashier machine behind the standing area that is used when sales for gold are made.Recordings are done using the computer there and receipts are printed in that area too.

This is an example of gold sales made from the inner part of the shop where the workerworks. The worker takes the gold out of the casing and shows the customer from the innerpart which is behind the steel bars and glass window.

The sales are made through a small sliding glass window at the lower part which is below thesteel bars whereby the transaction of money and gold is passed through the sliding window.


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Joo Ngien Pawnshop Outer Part of the Shop with the Group Members


This is our group photo with the owner of this pawnshop. This picture also shows the exteriorof the pawnshop where the name of the pawnshop, the gold for sale display area and the areaof sales (for customers) can be seen.

s

This is our group photo at the pawnshop.


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Kota Damansara Pawn Shop:

Choong Xin Pajak Gadai Shop Exterior and Pawnshop’s Name

Location: No. 32A-1, Jalan PJU 5/8, Dataran Sunway, 47810 Kota Damansara, Selangor D.E.

This is the name of the pawnshop which is hung directly above the main door of thepawnshop.

It shows the Chinese name of the pawnshop and a Malay translation of the pawnshop belowthe Chinese name.

The pawnshop’s exterior consists of a glass door which separates the shop and the pavement.Customers need to enter the shop through the glass door in order to make their transactionsunlike the pawnshop in Melacca which is only a walkthrough.


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Choong Xin Pajak Gadai Exterior Look


This is the overview of the pawnshop shop house as an individual shop lot. We were able tosee through the transparent glass door to observe or look at the operating pawnshop whilethey are carrying out their business.

There is a signboard of the pawnshop’s name hung above the shop indicating that the shop islocated and operates at the group floor.

The pawnshop is located in an area which has no other pawnshops nearby. This means theycan avoid competition in the same row of shop lots.


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Choong Xin Pajak Gadai Pawn Shop’s Interior


This is an overview of where transactions are carried out in the pawnshop. Pawnshop staff sitbehind the counter which has a steel bar and glass window that separates themselves and thecustomers.

The only transactions carried out here is gold loaning. There is no gold on sale.

This part of the pawnshop has a seating area for customers who are waiting for their turn tocarry out transactions. There is a notice board which enables staff and customers to viewnotices easily.


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Interview SessionsChoong Xin Pawnshop, Alor Gajah Interview

This interview is carried out between Ee Hui Teng and Mr Chin at Joo Ngien Pawnshopwhich is located in Melacca.

Interviewer: Ee Hui Teng || Interviewee: Mr Chin

Interviewer: Hi. We are students from Taylor’s University and we would like to knowmore about how a pawnshop function.

Interviewee: Okay. No problem.

Interviewer: When was this pawnshop founded?

Interviewee: 1960

Interviewer: Who are the key founders of this pawnshop?

Interviewee: My grandfather, Chin Fun Luan.

Interviewer: What prompted the founders to start this business?

Interviewee: During the old times, there wasn’t any pawnshop because most people are intothe business of selling foreign goods. When the consumers do not have enough money to buythe goods, they will bring their goods to pawn. This results in the birth of the business.

Interviewer: Can you briefly explain the process of pawning an item?

Interviewee: Pawning means that you take gold to be pawned. It is a trading process betweengold, or other valuables, and cash. For example, when a customer brings their valuables to thepawnshop, the gold will be calculated by gram. After calculating, we will offer the customera price for the gold to be successfully pawned. When the customer accepts the price offered,we will take their gold and they will receive cash in return.

Interviewer: What should customers do if they want to redeem back their gold? Howlong is the redemption period?

Interviewee: The customer would have to return the same amount of cash offered initially.After the interest rate is calculated based on the initial amount of cash and time span theyhave pawned their gold, they will have to pay off the interest rate which is 1.5% per month inorder to receive their gold back. The redemption period for one customer is 6 months

Interviewer: What if they exceed 6 months? Would they still be able to redeem theirpawned gold?

Interviewee: Yes, they will be able to redeem their pawned gold but once it exceeds 6 months,the interest rate will increase to 2% per month. However after 7 or 8 months, the customer


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must redeem their gold and pay the interest. If the customer still doesn’t come back to redeemtheir gold after 8 months, the gold will then be brought to auction. After the auction, the goldwill be given to the government.

Interviewer: What happens to the gold after auction?

Interviewee: It will belong to the person who won the bid.

Interviewer: How often does this auction occur?

Interviewee: Once every month.

Interviewer: What are you the main products pawned in a pawnshop?

Interviewee: They are mostly gold, watches and diamonds because these are the mostvaluable items in exchange for cash.

Interviewer: Who are your main customers?

Interviewee: Indians and Malays.

Interviewer: How many branches does your business have? Where are they located?

Interviewee: We have 5 branches in total. There are 2 branches in Melaka, 2 in KualaLumpur and 1 in Johor.

Interviewer: Can you briefly explain the history of how the business first started andrecent development of the business?

Interviewee: I am not very clear about the history of this shop. But generally speaking, in thepast, most of the Hakkas are involved in this business. This is most likely how this businessfirst started.

Interviewer: I have heard that this is a sunset business. Is it true?

Interviewee: Yes, this is an undeniable fact. This is because the pawnshop business facescompetition from banks which causes a decrease in business opportunities. Nowadays, bankstoo have pawn business so customers have a wider range of choice to select where to pawntheir valuables.

Interviewer: Is the competition strong in this business? How many competitors do youhave in this business? Can you name a few specific competition who have similarbusiness around this area?

Interviewee: Yes, the competition in this business is quite strong. Our main competitors arebanks such as Agro Bank and Bank Yapin. There are also other pawn shops such as LianSheng Pawnshop and illegal loaners.


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Interviewer: How does your competitors compete with you?

Interviewee: We compete by the interest rate charged. The lower the interest rate charged, thehigher the chance that customers will approach the pawnshop to pawn their valuables as theydo not need to return as much money over a period of time. Banks usually charge a 1%interest rate.

Interviewer: On an average scale, how much capital is required to start this business?Do you think if it is easy or hard to enter this market?

Interviewee: The pay-out capital is around 5 million. It used to be quite easy to enter thisbusiness in the past. However it is harder to enter in the present day because competition inthis business is very strong due to the presence of more competitors. Not only that, theeconomy now is not as good compared to the past. Therefore, the business revenue is not ashigh as before.

Interviewer: What are your strategies to compete with your competitors? How wouldyou attract more customers and avoid them from going to your competitors’ shop?

Interviewee: Our strategy is to charge them a lower interest rate, provide better customerservice and offer them a higher pawn price.

Interviewer: Are there any limitations on the pawn price you offer to your customers?Do you have a price floor?

Interviewee: By law, there is no limitation on the maximum or minimum price when avaluable is being pawned by the customer. We can make adjustment on the pawn price byourselves and it is not necessary for us to follow any listed price in our own business. Thisallows us to offer a special and higher price for loyal customers.

Interviewer: Are your pricing decisions strongly affected by your competitors? Forexample, if you competitors offer 1% interest rate to customers, will you offer 0.9%interest rate to them?

Interviewee: Yes, we will try to give a better offer so that customers will approach us instead.

Interviewer: Is there any specialized field of knowledge a person needs to know in orderto run this business?

Interviewee: The person needs to have the ability to identify the value of gold, diamonds andwatches. This ability can be learnt through experience. It hard to identify using instrumentsbecause with the technology today, people are able to create fake valuables which might notbe able to be identified through instrument measurements.

Interviewer: I think that is about all. Thank you for your precious time

Interviewee: You’re welcome.


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Joo Ngien Pawnshop, Kota Damansara Interview

This interview is carried out between Ee Hui Teng and Dato’ Ho at Choong Xin Pawnshopwhich is located in Melacca.

Interviewer: Ee Hui Teng || Interviewee: Dato’ Ho

Interviewer: Hi. We are students from Taylor’s University and we would like tointerview you to know more about the pawnshop business.

Interviewee: Hi. What would you like to know about this business?

Interviewer: When was the business founded? Which shop or branch was it?

Interviewee: The first shop is founded in 1954. The first shop was located in Kuala Selangor.

Interviewer: Who is the founder of the business and what prompted him to start thebusiness?

Interviewee: The founder of this business is Ho Ying Chai. I was not born when the businessfirst started, but I have heard stories on how he brought started his pawnshop business inMalaysia. As Mr Ho and his family migrated from China, this pawnshop business has alreadybeen practiced back there and then in China. So later on when they migrated, they broughtthis business into Malaysia. They were not first to start this business in Malaysia becausepawn business has already been operation during the 1950s in Malaysia long before ourcompany started. When they arrived in Malaysia, they had the chance to familiarize with theoperation of this business which caused them to start this business on their own.

Interviewer: Can you briefly explain the process of pawning an item?

Interviewee: Generally speaking, a pawn shop is like a financial company which is operatedin a simpler way. Pawning is a trading system. When a person is in need of cash, that personwill bring his valuable to exchange it for cash. In short, the customer give us a valuable itemin which we set a value to it. We keep the pawned valuable item and loan cash to thecustomer in return. After that, if the customer is able afford the initial pawned cash value andpay off the charged interest rate, the customer will be able redeem back their pawned items.We will incurred a 2% interest rate charge and the redemption period is 6 months. After 6months, the customer needs to return cash and the charged interest in order to redeem hisitem. If the customer is unable to pay the initial cash price and charged interest, he canchoose to extend the redemption date for another 6 months. However, he must pay theinterest rate for each month.

Interviewer: What if he is still unable to pay back after 6 months?

If he is still unable to afford paying back the interest after 6 months, according to the law, hisitem will be brought to auction to see if anyone wants to buy it. If the valuable is sold duringthe auction, the capital will be returned back to the shop while the profit made from theauction will be given to the owner of the valuable.


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Interviewer: Is there a high probability of customers returning to redeem theirvaluables? Or will most of them not return to redeem their valuables?

Interviewee: Most of them will redeem their valuables back because their financial problemsthey face are only temporary. All they need is a cash turnover. Most of them do not want tosell their items away because all they need at that moment is hands on cash. More than 60-70% of customers will redeem their items.

Interviewer: What are the main pawned products?

Interviewee: Mainly pawned products nowadays are mostly gold and jewelry. Some othershops do accept watches and pearls too. However, in the past we received bicycles, sewingmachines and fountain pens because their value at that point of time is high.

Interviewer: Who are your main customers?

Interviewee: Our main customers consist of people with middle or lower range income. If wewere to differentiate by ethnics, it depends on the geographical location of the shop. Forexample, if the location of the pawnshop has a high population of Indians, then most of thecustomers will be Indians. As an example, in KL, there is a higher population of Chinesepeople, so the pawnshop customers are mostly Chinese. If we were to see it in a biggerpicture, on average, there are more Indian and Malay customers compared to Chinesecustomers. However, an actual and accurate percentage is difficult to be calculated.

Interviewer: How many branches does your business have? Where are each of themlocated?

So far we have 5 branches. Which are located at Kuala Selangor, Batang Berjuntai, Kampar,Pandan Jaya and Kota Damansara.

Interviewer: Could you briefly explain the history and recent development of thepawnshop business?

Interviewee: The information I have on pawnshop history are mostly information after the1950s-1960s in Malaysia. Pawnshops are known as a traditional financial company. Thebusiness does not only exist in China, the business exists even in India and Europe. The pawnbusiness is practiced even more around the 17th or 18th century. However, the business hasexisted even longer in China, maybe around 1000 to 2000 years of history. In Malaysia, thebusiness is not practiced as long as in China. Before the Malaysia’s Independence Day, theChinese have brought in the pawn business from China. During that time, Malaysia isgoverned under the British and the British thinks that this business is a method to financiallyhelp people in certain regions. At that time, banks do not provide sufficient service to thepeople and this is the reason why the pawnshop business is accepted by the society. Thebusiness is then governed by the local regional government because there is no parliament atthat time. As example, places like Jatung or Kajang. This has continued even after thecountry’s independence. Instead, the business is being governed under the finance ministry. Ifwe were to talk about the pawnshop business in general, we did not have any computers in


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the past. The gold received from the customer will be weighed by using a lever-balance andthe information on the valuables and other details are all recorded using calligraphy pen.When ball pens were invented, the business was then recorded everything in a big book usingball pens. Initially, receipts were printed out with blank spaces. When printers came about,the code number was introduced and printed out on the receipt. Now that we have computers,everything is recorded into the computer and a complete receipt is printed out. The operationof this business develops with the development of technology.

Interviewer: Recently, there is a saying that pawn business is a sunset business. Do youagree with this statement or you think that the business will continue on even after 100-200 years later?

Interviewee: The nature of business for this pawnshop is a financial company and I believethat there won’t be a sunset for any financial company. In the olden days, when cash is notused in the society, people trade using items like rocks, poultries and vegetables. Nowadays,a person’s assets are measured by cash and inventories. In this way that the society functions,it is impossible for a financial company to distinguish. If pawn shops distinguish in thesociety, it means that banks will too because they share the same nature of business. Now thatour living standards are higher, the business revenue might be lesser but this does not meanthat there is no revenue at all. It also does not mean that the entire society do not need thistype of organization anymore because it functions to solve problems faced by people withmiddle to lower range income. Therefore it won’t distinguish. However, the business mightthat be as profitable as before. It will not have high volume but the business will is consideredmore stable.

Interviewer: Does the business have a lot of competitors? Can you list out 3 competitors?

Interviewee: Yes we have many competitors but the amount of competitors cannot becalculated that way. All pawn shops are like different individuals. So far there are more than400 traditional pawn shops and nowadays, there are also more than 1000 Muslim pawn shops.All of these pawnshops are competing with each other which creates a great competition.

Interviewer: Is the competition of the business strong?

Interviewee: The competition is pretty strong because the customer nowadays are differentfrom before. Customers nowadays will compare the value they can get from different pawnshops unlike the customers in the past. So this creates a strong competition. If you are unableto provide the customer good service and price, they will shift to another shop.

Interviewer: How do you compete with each other?

Interviewee: I think that customer service is the most important factor. For example, if you goto a bank, you will have some enquires and I will grade their service provided. If they do notprovide good service, why should I go to this bank? I would rather to go to Public Bank,Maybank or Standard Chattered to get my house loan. Therefore I think that customer servicethe most important strategy to compete with other pawnshop business.


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Interviewer: How much capital is required to start this business? Are there anyspecialized field of knowledge I need to know in order to run this business?

Interviewee: Around 20 years ago, you might only need around 1-2 million to start thisbusiness. However, since the Malaysian currency is getting smaller now, you might needaround 5-6 million as the start-up capital. It also depends on the location of your shop. Somelocations might need up to 10 million capital. The knowledge needed will generally be theability to identify or determine the value of the items you want to receive such as gold. Youcan not only receive gold as deposit, you may receive watches too. Nowadays, a watch maybe worth up to 500-600 thousand ringgit. You may also receive jewelleries. It depends onwhat item you want to receive as deposit and you need to have the knowledge in order toidentify the value of the item. I think that stamps are also acceptable. Maybe a 1 cent stampcan be worth around 200-300 ringgit. As long as you have the knowledge, then I think itshould not be a problem. If not, you might be fooled, conned or cheated by others.

Interviewer: There are a lot of real and fake gold and diamonds nowadays. How do youidentify and tell apart the real from the fake

Interviewee: 60% is based on experience and the other 40% can be based on technology. Thetechnology advancement has created instruments to identify whether the gold is genuine.However, very real-looking replicas are also made in the market dues to the advancement oftechnology. So there is a competition between the creation of replicas and the invention ofinstruments to identify the replicas. In such cases, experienced elderly are able to identify thegenuine item more accurately.

Interviewer: Does your pawn shop identify the originality of the item based onexperience?

Interviewee: Yes. We need to train our staff to be able to differentiate the valuables. At thesame time, we also need instruments to aid the staff. This is why I say that 60% is based onexperience while 40% based on instruments. However, it may be 90 to 100% based onexperience in the past but it is not applicable nowadays because the replicas look too real tobe fake.

Interviewer: Do you think it is easy to operate this business?

Interviewee: I have to say that it is not that easy to operate because you need to think of waysto improve and learn. Business with no improvements will be eliminated by its. In-depthknowledge is also required to operate this business. This business is a high risk business,therefore you need to have high security system. You will have to continuously improve andmonitor your staff’s attitude because it is considered a service line. You also need to knowthe economy of the gold, whether the price will increase or decrease in the future. So it is nota very easy business.


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Interviewer: How do you compete with your competitors other than providing bettercustomer service?

Interviewee: I think the most important is customer service. Other than that, since we receiveinterest from our customers, we may charge them a lower interest rate (lower than 2%) or paythem a higher loan, for example, offer them RM150 for valuables which might be only worthRM100. All these can be strategies to compete. However, I still think that customer service isprioritised because living standards are higher now.

Interviewer: Is any limit on the loan you offer to your customer? Like a price floor or aprice ceiling.

Interviewee: There are no limitations on this matter. It is pretty flexible.

Interviewer: What about the interest rate charged?

Interviewee: There is a ceiling for the interest charged. According to the pawnshop act, themaximum amount of interest charges is 2%. There is no minimum amount of interestrequired to be charged. So it is possible that you might not charge any interest to yourcustomer. There are no other limitations other than this.

Interviewer: Will the loan price depend on the current market price of gold?

Interviewee: The price will be the wholesale price of gold. The wholesale price is around 70-80% of the retail price. But at the very end, the loan price depends on the decisions by theowner or staff of the pawn shop.

Interviewer: Are your pricing decisions strongly affected by your competitors?

Interviewee: Generally speaking, our loan price is not strongly affected because we cannotoffer a price too high. Offering a high price will create a very high risk because the gold pricemay drop at some point in time. It may cause financial problems as you will lose a lot ofmoney. So if you want to operate this business, you will need to be able to predict the goldprice after 6 months. You need to obtain this knowledge by learning, reading and calculating.The gold worth RM100 now may be worth RM150 6 months later. In this case, I may offerRM140 to my customer. Others may think that you are offering too much but it actuallydepends on the operation knowledge you have. If you predict that the gold price will fall inthe future, as example the gold worth RM100 now will only worth RM50 6 months later, thenyou can only offer your customer RM40. So there is no any limitations to it.

Interviewer: I think that’s all. Thank you.

Interviewee: You’re welcome.


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MINUTES OF THE MEETING (1)DATE: 30/10/15TIME: 3:30 PMVENUE: Ee Hui Teng’s House in Malacca

Details:Meeting called by: Cham Zheng CheeNotes taken by: Lew Quo Ming/Justin Chong Yong ShengSubject: Regarding the trip to Joo Ngien Pawn Shop

and Goldsmith on 30/10/15

Attendees:

NAMES OF GROUP MEMBERS TUTORIAL GROUP ROLEJustin Chong Yong Sheng Friday Research/Report WritingMichelle Wong Sook Yin Wednesday Recording/Report WritingLew Quo Ming Wednesday Research/Report WritingLiew Cherng Qing Wednesday Recording/Report WritingEe Hui Teng Wednesday Interviewer/TransportCham Zheng Chee Wednesday Leader/Interviewer

Minutes:

NO. ACTIVITY ACTION TAKEN BY1. Introduction Brief of current situation of the project.2. Discussion of

businessLocation of the chosen business and interview along with theitinerary of the day ( Refer to Itinerary table)

3. Delegation of duty Distribution of each member’s duty with clear instructions.4. End Meeting adjourned.

Itinerary:

Time ACTION3:15 PM Arrival at Ee Hui Teng’s house in Malacca4:45 PM Arrival at Joo Ngien Pawn Shop and Goldsmith, begin

interview5.15 PM Return to Ee Hui Teng’s house


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MINUTES OF THE MEETING (2)

DATE: 7/11/15TIME: 12:30 PMVENUE: Event Hall Library, Taylor’s University

Details:Meeting called by: Cham Zheng CheeNotes taken by: Lew Quo Ming/Justin Chong Yong ShengSubject: Regarding the trip to Choong Xin Pawn

Shop on 7/11/15

Attendees:

NAMES OF GROUPMEMBERS

TUTORIALGROUP

ROLE

Justin Chong Yong Sheng Friday Recording/Research/Report WritingMichelle Wong Sook Yin Wednesday Recording/Research/Report WritingLew Quo Ming Wednesday Recording/Research/Report WritingLiew Cherng Qing Wednesday Recording/Report WritingEe Hui Teng Interviewer/Transport/Report WritingCham Zheng Chee Wednesday Leader/Interviewer/Transport/Report

Writing

Minutes:

NO. ACTIVITY ACTION TAKEN BY1. Introduction Brief of current situation of the project.2. Discussion of

businessLocation of the chosen business and interview along with theitinerary of the day ( Refer to Itinerary table)


Itinerary:

Time ACTION8.00 AM Meet at Taylor’s University roundabout and departure11.30 AM Estimation of arrival at Choong Xin Pawn Shop1.00 PM Interview Ended and returned to Taylor’s University

MINUTES OF THE MEETING (3)

DATE: 8/11/15TIME: 2:00 PMVENUE: Event Hall Library, Taylor’s University


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Details:

Meeting called by: Cham Zheng CheeNotes taken by: Lew Quo Ming/Justin Chong Yong ShengSubject: Regarding on writing the report

Attendees:

NAMES OF GROUPMEMBERS

TUTORIALGROUP

ROLE

Justin Chong Yong Sheng Friday Coverpage/Summary/Comparison/Slides

Michelle Wong Sook Yin Wednesday Appendix/Research/VideoLew Quo Ming Wednesday Meeting Minutes/Job

Description/Comparison/VideoLiew Cherng Qing Wednesday Compile/History of Pawn Shop/SlidesEe Hui Teng Brief bio of the shop chosen/VideoCham Zheng Chee Wednesday Leader/Recommendations/Slides

Minutes:

NO. ACTIVITY ACTION TAKEN BY1. Introduction Brief of current situation of the project.2. Discussion of the

reportDiscussed upon what is needed to be in the project and startworking on it.



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CONCLUSIONIt has been concluded that the Choong Xin Pawnshop in Kota Damansara, Klang Valley is

commercially more successful compared to the Joo Ngien Pawnshop in Alor Gajah, Melakabased on the comparative analysis done. This conclusion is supported by the evidencesobtained through research and critical analysis based on economics principles we had learnt.Choong Xin Pawnshop in Klang Valley is more successful because it has a more strategiclocation, incorporate advanced technology, focuses on customer service and higher efficiency.

Firstly, Choong Xin Pawnshop has a more strategic location compared to Joo NgienPawnshop. Choong Xin Pawnshop is located at Kota Damansara which is a township locatedin Petaling Jaya, Selangor, Malaysia. It is spread across 4,000 acre (16 km²) of land. It is alsoa state seat constituency which is sandwiched between Shah Alam and Petaling Jaya. Notablelandmarks located within the constituency are the old Subang Airport and the RubberResearch Institute of Malaysia. On the other side, Joo Ngien Pawnshop is located at AlorGajah which is the district seat of the Alor Gajah, Malacca, Malaysia. It located on north partof Malacca state. Alor Gajah is located 25 km, around 30 minutes’ drive from Malacca City.Comparing both locations of the shops, Choong Xin Pawnshop’s location is better than JooNgien Pawnshop’s as it is located at a highly populated place. Therefore, this lead to morecustomers to visit Choong Xin Pawnshop in overall.

Secondly, Choong Xin Pawnshop has incorporated advanced technology in their businessbut Joo Ngien Pawnshop did not. From our interview conducted, we found out thatidentification of replicas are plainly based on experience at Joo Ngien Pawnshop. However,Choong Xin Pawnshop has used advanced technology to aid this process. This has helped tolower the risk of the business because the business will not face problems of being fooled bytheir customers who want to use real-looking replicas as deposit for their loan. Joo NgienPawnshop identifies replicas based on experience which may result in the occurrence ofhuman error as replicas created nowadays are not much different from the original ones. Thisaspect is very crucial to the business because the business will need to bear great loss if thismistake is made. For instance, a replica worth only RM100 can be perceived as an originalproduct which worth more than RM1000. If the pawnshop fails to identify the replica, theywill need to bear the loss of RM900 and the customer earned RM900 out of nothing.

Other than that, Choong Xin Pawnshop focuses more on customer service while Joo NgienPawnshop puts their focus on the price of their product and loan interest. The perception ofsuccess of a business is often dependent on employees who can adjust themselves to thepersonality of the guest. Our interviewee representing Choong Xin Pawnshop believes thatgood customer service experience can change the entire perception a customer holds towardsthe organization. Therefore, Choong Xin Pawnshop concerns the priority an organizationassigns to customer service relative to components such as product innovation and pricing. Inthis sense, Choong Xin Pawnshop which values good customer service spend more time andmoney in training employees than Joo Ngien Pawnshop. From our observation obtained whenwe visit the shop, we find that the workers at Choong Xin Pawnshop are friendlier and they


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welcome every customer with a smile. All of this leaves a good impression to the customersand may lead them to come back to the shop again.

Last but not least, we found out that Choong Xin Pawnshop has higher efficiency comparedto Joo Ngien Pawnshop. Not only does Choong Xin Pawnshop have modern instruments toaid the identification of replicas as stated above, it also hires more workers compared to JooNgien Pawnshop. Choong Xin Pawnshop has a total of 6 workers and 5 of them are in-chargeof the service work such as communicating with their customers and determine the worth ofitems owned by their customers. On the other side, Joo Ngien Pawnshop only hires 3 workerand among the 3, only 1 of them is experienced and able to identify the value of theircustomers’ valuables’ worth. This difference stated shows that Choong Xin Pawnshop hashigher efficiency and Joo Ngien Pawnshop lacks of man power and technology advancementto upgrade their efficiency.

In a nutshell, we have come to a conclusion that Choong Xin Pawnshop is morecommercially successful compared to Joo Ngien Pawnshop. This is due to the factors statedabove, namely strategic location, advancement of technology, good customer service andhigh efficiency.


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REFERENCES1. Chin, F. (2015, October 30). Pawnshop business [Personal interview].

2. Diana, C. (Ed.). (2013, September 12). The pawn industry: Quick money at a price.

Retrieved November 23, 2015, from

http://www.freemalaysiatoday.com/category/leisure/2013/09/12/the-pawn-industry-quick-

money-at-a-price/

3. Donna, E. (Ed.). (n.d.). Ways to Make a Pawnshop Better. Retrieved November 23, 2015,

from http://smallbusiness.chron.com/ways-make-pawnshop-better-50526.html

4. History of Pawnbroking. (2013, July 30). Retrieved November 23, 2015, from

http://www.history.co.uk/shows/pawn-stars-uk/articles/history-of-pawnbroking

5. Ho, Y. (2015, November 7). Pawnshop business [Personal interview].

6. The History of Pawn Shops. (n.d.). Retrieved November 23, 2015, from

http://scribol.com/anthropology-and-history/the-history-of-pawn-shops

7.典当业. (2015, June 29). Retrieved November 23, 2015, from

http://baike.baidu.com/view/1095582.htm

3.8.杜君立：话说当铺历史--中国古人最长时间使用的银行. (n.d.). Retrieved November

23, 2015, from http://www.aboluowang.com/2014/0719/418544.html

http://scribol.com/anthropology-and-history/the-history-of-pawn-shops

http://baike.baidu.com/view/1095582.htm

http://www.aboluowang.com/2014/0719/418544.html

Integrated project final

Education

Transcript of Integrated project final