Tampoi Enterprise Stays on Top of the Malaysian Auto Parts Industry—Through Network and Collaboration
Established in 1978, Tampoi Enterprise is one of the largest automotive spare parts suppliers in Malaysia. From its headquarters in Johor Bahru, Malaysia’s southern economic hub, Tampoi offers an extensive product range, from light bulbs to brake pads…and X-1R products, of course.
We sat down with Lee Jia Juan, better known as JJ, whose father founded the business, to gain insight into the business and how it successfully spearheaded the industry in Malaysia.
A: We know that Tampoi Enterprise has been around for over four decades. Tell us a bit about its history, how it has expanded so successfully and how you got involved.
JJ: Well, the business started with a small team, in a little shop in Tampoi. Then it moved to Taman Tasik, then Taman Johor and now here, the office we are in, a 3-storey building with a total floor area of 80,000 sq ft.
We have three branches: Kuala Lumpur; Butterworth, Penang; and Kota Kinabalu, Sabah. In totality, our warehouses span over 130,000 sq. ft.
As for me, I got involved nine years ago after my studies in Singapore. Prior to joining the business, I was an auditor with what is now known as Baker-Tilly.
A: And you have an even larger dealer network…
JJ: Yes, we have more than 1,000 dealers throughout the country with whom we work together to provide quality products to the end-user.
Our automotive parts business is a very traditional business, unlike the likes of Amazon and Alibaba which uses a different platform that sends goods directly to the consumer. You might call us a ‘stockist’. Say, you have a product and want to bring it to the market but are unable to do so—that’s where we come in.
Distribution comprises a very long chain and we make up a part of it: A manufacturer produces the goods in another country; the manufacturer then needs an exporter who exports it out of the country, who in turn communicates with an importer from another country. It then comes to us and we send it to our stockists who sends it to the spare parts shop/workshop and finally to the end-consumer. It’s a very long chain.
Nowadays, importers have been more or less wiped out. Exporters bypass them and send the products directly to us.
A: That’s a massive network. Where do you source your parts from?
JJ: Yes, you need collaboration with a wide network of partners. With strong partnerships and by providing support, we have gained a strong foothold in the industry.
We source based on consumer demand. In Malaysia, it’s mostly Japanese and local products. We might introduce a product to the market or even source for products that the market may be looking for. The market knows what product it wants but sometimes manufacturers don’t cater to small volume orders; that’s where we come in.
A: You have a wide range of products. Is there anything else you intend to add to your product range?
JJ: In the market, we are called an automotive distributor.
There are two types: specialist and generalist. There are specialists in air-conditioning, muffler, windscreen, electrical and so on. We, as a generalist, cover all parts.
My dad told me this story: 30 or 40 years ago, if you were to go to an auto parts shop in a place like in Pahang, you will obviously see auto parts. Some years later, you started seeing hardware. Then one day, you see drinks, medication and so on. It’s part of business evolution.
We used to just sell brakes and brake fluids. Then customers started asking us for lights, then wipers, then hydraulic parts and then clutch parts. That’s how we grew.
A: Nowadays, the push is for EVs in America, Europe and even in countries like China. What is your game plan? How are you steering towards that?
JJ: It may or may not happen in my time. But we have been through this quite a number of times. All cars had carburettors previously, which then evolved into fuel injection. We had mechanical fuel pumps which evolved into electrical fuel pumps. Same goes with the transmission: the market was mainly on manual transmission then it shifted towards automatic transmission. Business is like a treadmill: if you’re not moving, you are going backwards.
A: How many people do you have working in the company and how many reports to you?
JJ: We have a team of 100 people performing various kinds of functions and as I am in charge of operations. I have about 15 direct reports.
A: You are based here in Johor and have offices in Kuala Lumpur, Penang and East Malaysia. Are those offices under the same Tampoi Enterprise brand?
Yes. We operate under one name and this is where we really appreciate our human capital. Every branch has its own manager who handles the day-to-day operations—that is, most of everything.
In Johor, we have two indoor and two outdoor salespeople. In Kuala Lumpur, we have five salespeople. In Penang, we have four sales staff. In East Malaysia, we have an office in Kota Kinabalu, Sabah, which has its own team of a branch manager and four salespeople. One of us from Johor visits Sarawak on occasion.
The Johor team covers the Johor territory. The Kuala Lumpur team covers from the central area to Melaka and all the way to the East Coast. Our Penang office covers the whole northern part of Peninsular Malaysia.
If a customer goes to a parts shop in Malaysia and wants something, it can be delivered within two days. Hence, we don’t see the need to have an office in every state.
A: Do you have a presence in Singapore?
JJ: No, we don’t, simply because we cannot compete. One of the reasons is our government’s reexport policy is not that great and Singapore has a very vibrant trans-shipment business. In a trans-shipment business, what happens is… see, manufacturers don’t sell by a few pieces—they sell by thousands of pieces. Singapore’s vibrant and thriving eco-system makes it effortless.
And they have the world to distribute to and they have this trans-shipment policy which doesn’t involve sales taxes, duties, non-trade agreements and all these things – it’s a very global economy. So, a distributor in Singapore orders a thousand pieces, drops off 10 pieces in Singapore and sends the balance 990 to the rest of the world. And they get the 10 pieces at the price of a 1,000-piece order.
You have to admire Singapore for what it is: a working powerhouse. You just have to go there and see how they run a corporate business and how quickly things can get done. If you were to give me a part number now, it would take me 5 to 10 minutes to find it. In Singapore, at the press of a button, a robot will go get it. It really is something. They are really efficient.
A: How about your other competitors?
JJ: To be frank, we have as many competitors as customers, from large to small scale. One car has about 60,000 SKUs, if you include bolts and nuts. There are a lot of competitors in different segments, but there isn’t a direct competitor for every single product that we do. We supply some parts, they supply some parts.
The market is fragmented. The motor traders association says in KL alone there are around 500 distributors, big and small. And parts include tyres, body parts, etc. and all overlapping. This automotive industry is about a 4 billion dollar industry. Everyone wants a piece of the pie. And we haven’t even scratched the surface.
As for us, we are in the automotive aftermarket segment, so I would say the direct competitor would be OEMs because they have everything. Actually, we are their competitor as we are after their market share.
A: What is the plan for the next 5 to 10 years?
JJ : We’ve got to maintain profits and keep our staff happy. Some parts will phase out so we have to keep expanding our product line. For automotive parts, the part number is always increasing. When a new car is launched, we have to supply parts for it. But at the same time, we cannot discard parts for cars that are slowly exiting the market, so we have to keep some parts for old cars that are still on the road.
A: So, are cars your passion?
JJ : Well, just look at the car I drive and you would know that my hobby is not really it. Haha. When you talk to a layperson, they will tell you how the car looks from the outside. When you talk to a spare parts person, they will tell you how the car looks from the inside: the engine, the transmission, how reliable it is, how well it drives…So, I’m more of the latter.
A: Thank you so much for your time. We learned a lot about the distribution business from you.
JJ: It was my pleasure.