Digital Banking Services For International Expansion
[This article is a paid feature with HSBC.]
If you are a fan of instant coffee or tea, you might have heard of a brand called Chek Hup. Their products are available on shelves in markets across the country, from small stores like 7-Eleven to large-scale supermarkets like Aeon. But the brand did not gain popularity overnight.
Founded in Ipoh in 1965 by the late Tan Soo Hor, Chek Hup began its business selling rock sugar in the Malaysian and Singaporean markets. Then, in 2000, the company entered the instant beverage market with the Chek Hup 3-in-1 Ipoh White Coffee.
Since then they have added new products such as teh tarik, chocolate drinks and gourmet coffee (with rock sugar on a stick) to their credit.
An ingredient still present? Rock sugar. It is known as a healthier alternative to processed sugar. While processed sugar can be cheaper in terms of cost, they believe in sticking to their roots and prioritizing taste instead of going the profit-driven route.
Bringing rock sugar coffee to international markets
For an ambitious company looking to grow and grow, it is not enough to rely solely on the internal market. And that’s why in 2003, Chek Hup decided to overhaul its business model and began its expansion in Asia-Pacific.
To effectively develop its export activities, Chek Hup sources coffee beans from neighboring countries while maintaining its production and assembly operations in Malaysia.
In addition, Chek Hup also relies on HSBCnet (HSBC’s digital banking platform), which authorizes payments in 15 markets in Asia-Pacific, to effectively manage the company’s coffee business in Southeast Asia.
Did you know: Malaysia is the world’s fourth largest exporter of coffee extract. In 2017, Malaysia exported approximately RM 2 billion of coffee extracts to China, Thailand and Indonesia.
Smarter foreign exchange management
With such a robust export business, it is very important for Chek Hup to be able to minimize its currency risks and have full visibility on its currency exposure.
This is made possible through the use of HSBC Evolve, an interactive platform that allows Chek Hup to access HSBC’s depth of liquidity with over 460 currency pairs for their hedging needs.
With HSBC Evolve, seamless live pricing is available from SPOT up front, and rates can be booked easily with a few clicks.
Dictionary time: Spot pricing is the price of a product that is bought and paid for at that time, instead of the expected or future price. Example: Gold is worth 300 RM, but could be worth 500 RM in the future. But since you buy it now, you only pay 300 RM.
Looking to the future, Chek Hup has set his sights on further growth in China as the country embraces the culture of drinking coffee. And thanks to their partnership with HSBC, Chek Hup can tap into HSBC’s wealth of knowledge and an understanding of market dynamics in China.
And they’ve already taken their first step. In 2019, on the day of the bachelor (11/11), Alibaba Group revealed that Chek Hup is one of the top three Malaysian brands exporting to China.
As a leading international bank with a presence in 64 countries and territories, HSBC has always supported its clients every step of the way with its well-established global network and expertise in international trade.
It is very useful to have HSBC when one wants to understand the market. They are our first partner to whom we turn to find more concrete information to enable us to make good decisions.
Joseph Tan, Managing Director, Chek Hup
- For more information on HSBC banking solutions, click on here.
Featured Image Credit: Chek Hup
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