The story of Mustafa
Mustafa Centre is Singapore’s biggest 24 hour retail mall. But it wasn’t always that way – they started small, too. Here’s their story!
The current managing director and co-founder of Mustafa Centre, Mustaq Ahmad, was initially a small business owner.
In the 1950s, Mustaq and his father ran a pushcart selling tea and bread. While still in school, Mustaq saved sufficient capital to start his own business selling handkerchiefs, next to his father’s stall.
This grew to a fabric and textiles business. At Secondary Four, Mustaq dropped out of school to run the business full-time with his father.
Following a ban on street stalls in the 1970s, Mustaq and his father opened a proper, ready-made clothing store along Campbell Lane.
This was a bold move; at the time, it was more common for people to buy fabrics and sew the clothes at home, than to purchase it off the rack.
As the business expanded, Mustaq also expanded the product range to include electronics.
He also did something completely crazy for the time: he fixed the prices on everything. This seems normal to us now, but at the time, it was expected that you would bargain with the shop owner for everything.
This stroke of genius grew the business and customer traffic significantly, and saw them moving into a retail mall in 1985
When the mall’s management apparently lost their minds and decided to raise rent by 70 per cent, Mustaq left and bought 20 shophouses along Syed Alwi Road. These were developed into a 75,000 square foot retail mall, which opened in 1995.
By 2003, the retail mall – which we all now know as Mustafa Centre – was open 24 hours, had won a tourism award (despite never deliberately attempting to win one), and brings in an estimated $302 million per year.
In 2008, Mustaq Ahmad made it to the Forbes list of the 40 richest Singaporeans (at number 38), and his business continues to expand.
Businessman or homemaker, here are some personal money lessons we can learn from Mustafa Centre’s success.
Mustafa Centre wouldn’t be what it is if no risks were taken in its history, from moving into a retail mall to altering its sales strategies. But they were always measured risks – in the early 2000’s, for example, Mustafa Centre also sold used cars. When the business didn’t do well, they pulled the plug without serious damage.
You can use the same approach. For example, you could make it a point to save up six months of your income before attempting to switch jobs. You could have a plan to restructure your debt, should your education cost more than you expect.
In short, you need to take risks to grow your income and find by new opportunities. But always have a fallback plan, and do not take a risk if the consequences of failure are too high.
NEXT: Be hands-on with your assets →
Mustaq Ahmad was – and still is – famous for the way he “walks the floor”. Most of the staff at Mustafa can attest to seeing him be the first to arrive and the last to leave.
Even if you have passive income sources, such as indexed funds or property to rent, you must still make an effort to check on them.
NEXT: Small savings can build a large fortune →
Mustafa Centre is known for having some of the lowest prices. They can afford to do this and still stay profitable, because of detailed attention to their supply chain. They minimise the number of middlemen they have to work with (sometimes cutting them out altogether), and pay close attention to seasonal product cycles to avoid overstocking.
Hundreds, perhaps thousands of small details are addressed. Each of these save a little bit of money, but the cumulative effect is significant. You can apply the same principles to your own finances.
NEXT: The conventional way isn’t always the best way →
Mustaq Ahmad took a bold move when he used fixed prices for everything. This was not the usual way to sell at the time. However, fixing prices solved a huge number of inefficiencies.
Just because everyone is doing something, that doesn’t mean it’s the best approach. Never buy an asset just because everyone else is buying it, or use a particular bank just because it’s the most common one. Think carefully about your financial needs, and do what serves you best.
NEXT: Always diversify →
Mustafa Centre sells a massive range of products, from jewellery to electronics. This diversity isn’t just good for consumers, it provides protection from market fluctuations.
Instead of investing in just one thing, such as only mutual funds or only gold, aim for a balanced mix of assets. This will ensure that, if one of your assets falls in value, it can be compensated for by another. A qualified wealth manager can help you to build a well-diversified portfolio of assets.
NEXT: Take measured risks →
By Ryan Ong, SingSaver, October 2016
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