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 Questions/Cham 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

J.MEC | FNBE0115 / AUG 2015 | INTEGRATED PROJECT

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’ Competitive Traits

6-12

8. Recommendations 13-15

9. Bibliography 16

10. Appendices 17-34

11. Minutes of Meeting 35-37

13. Conclusion 38-39

14. References 40

15. Attachment of Slides -


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KEY SUMMARYThe Pawnshops Joo 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, Melaka and Kuala Lumpur, respectively.

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

visited as we planned our trip to Melaka 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 Kuala Lumpur, Choong Xin Pawnshop, is owned by Ho Teck

Keun. It is located in Kota Damansara, and is commonly visited by people of all income.

Joo Ngien Pawnshop

Choong Xin Pawnshop


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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 of St Francis of Assisi and associates, which is Old Catholic. Even though it was a church prohibition against usury, which is lending money with high interest, there is some evidence stating 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, and sell the wine to earn profit as well as buying his robe back. And after then, well-recognized earliest pawnbrokers began in the 5th Century. The activity were established and operated by Buddhist Monasteries to help poor. Later, it became widely seen in the China society. There were some businessmen who formed partnerships with Buddhist monasteries to avoid taxation from government.

Greece and Roman too are familiar with pawn broking, which was practiced by their people, 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 the rules practiced by Roman. For the pawn broking of gold, silver and jewels, customers are allowed to borrow a loan up to 80% of the value; where else when pawn broking everything else, customers are allowed to borrow a loan up to 2/3 of the value. Interest calculated monthly 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 or renewed 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 14 th to 15th Centuries, noted families became popular for their money lending. King Edward III famously pawned jewels 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 introduced from both Chinese and Western influences. Malay pawn shops knew pawn broking as ‘Pajak Gadai 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 rules and regulations set by Pajak Gadai Islam Ar-Rahnu scheme built on Act81-Act Pemegang Pajak Gadai 1972 under Section 46.

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


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BRIEF DESCRIPTION OF BUSINESSESa) Joo Ngien Pawnshop & Goldsmith

Joo Ngien Pawnshop is a pawnshop located at 2852, Alor Gajah, 78000 Melaka, just opposite the Alor Gajah field where there is a round a-bout nearby. The shop can be contacted through phone, 06-5561242. The pawnshop provides service of pawning items such as gold, diamonds and watches. Customers deposit their valuable with a pawnbroker as security for money lent. Other than that, the business also sells jewelry.

The history of Joo Ngien Pawnshop first started in 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 he gained the trust and recognition from his boss. His boss then decided to give him a pawnshop to lead all by himself. After a few years, his boss gave him the share and the pawnshop eventually became his as he has gained full control over it. The business then became the Chin family’s family business. After running the 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 has been operating for 77 years till today. The pawnshop is now inherited by Mr Chin’s second son, Dato’ Chin Kon Tow and the business has been expanded to 5 pawnshops. Two of the branches are located in Melaka, two in Selangor and another one Johor. The main branch is located in Masjid Tanah, Melaka. All of the branches, except the main branch, are currently operated by the family, and Dato’ Chin’s brothers and sons are in charge of the business’ operation.

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


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pawnshop when they face problems with cash turnover. Therefore, they give the pawnshop their valuables as deposit for loan. When they have sufficient cash, they will redeem back their items by paying their loan together with the deposit. Joo Ngien Pawnshop charges 1.5% interest to their customer per month and the redemption period is 6 months long. The shop faces great competition nowadays as many other newcomers have entered the market. This is because the operating license is now not limited anymore and anyone can operate a pawnshop easily. The pawnshop’s main competitors are the banks, the other pawnshops and also illegal loan sharks.

b) Choong Xin Pawnshop SDN BHD

Choong Xin Pawnshop is located at No, 32A-1, Jalan PJU 5/B, Dataran Sunway, 47810 Kota Damanasara, Selangor Darul Ehsan. The pawnshop can be contacted through the number 03-61417099.

The first pawnshop by the company was founded in 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 born yet during that time. However, he thinks that the business was founded by Mr Ho when he first came to Malaysia from China and got the chance to familiarize with the business. He thinks that the business creates a great opportunity and that prompted him to start his own pawnshop. 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 and Kota Damansara.

The pawnshop is a simplified version of a financial company. The shop provides pawn service, which is receiving deposit from customers as security to give out loans. The deposits are in the form of gold, diamonds, watches and pearls. Whenever a person needs cash, he will bring his valuables to be pawned. The valuables are then kept by the pawnshop and he is


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given 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 one does not have enough money to repay the loan, he can repay the interest first and the redemption period will be extended again for 6 months. If one doesn’t have money to pay back the loan and interest, his valuables will then be brought to auction according to the pawnshop law. The money earned from the auction will then be given to him or her. According to Dato’ Ho, around 60-70% of customers will redeem their valuables because they pawn to solve their short term financial problem, not because they want to sell their valuables. Even though the items that are accepted as a deposit are only gold and diamonds, items such as bicycles, fountain pens and sewing machines are also accepted in the past. Their main customers mainly consist of people with middle range or lower range income and mostly are Indians 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 does not agree that it is a sunset business as its nature of business is to provide money for people who face financial problems and it is essential to the business. He believes that the business will not distinguish in our society but the business will not be as good as before. The business faces great competition because the customers will be more selective on the pawnshop. Therefore, he thinks that good customer service is most important strategy to face the competition and trains his workers to have provide excellent customer service.


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Comparisons Joo Ngien Pawnshop & Goldsmith

Choong Xin Pawnshop SDN BHD

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 of

workers

2 6

Customer’s class Middle or lower Middle or lower

Regular customers Malay & Indian Malay & Indian

Average customers

per 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

COMPARISON OF BOTH BUSINESSES: Joo Ngien Pawnshop, Melaka || Choong Xin Pawnshop, Klang Valley


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COMPARATIVE ANALYSIS BETWEEN JOO NGIEN PAWN SHOP AND CHOONG XIN PAWNSHOPI ) Number of Competitors

Joo Ngien Pawnshop & Goldsmith Sdn. Bhd. is located in Alor Gajah, Melaka. Joo Ngien Pawnshop and Goldsmith Sdn. Bhd. has only 3 top competitors which are CIMB Bank, Hock Nin 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 are their main competitors, which are Visiber Sdn.Bhd. , HSBC Bank, Ambank and RHB Bank.

II ) Brief Description of Competitors

A) JOO NGIEN PAWNSHOP, MELAKA

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

The other top competitor will be Kedai Emas Hock Nin (Hock Nin gold store). Hock Nin gold store is a competitor running the same pawn broking business similar to Chop Joo Ngien pawnshop 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 competitors surrounding itself, including banks and jewelry shops. Banks include Public bank, Maybank, Hong Leong Bank, Al Rajhi Bank, Standard Chartered Bank and United Overseas Bank. But the 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 each other. However, both RHB bank and Am bank are not as strong of a competitor towards Choong Xin pawnshop compared to HSBC bank, due to the fact that they are competing among themselves and HSBC bank is located only 30 meters away towards east from Choong Xin 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 store that sells common jewelry accessories, and they are quite popular.

Numbers Methodology jewellery accessories.

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

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


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III) Nature of Market

JOO NGIEN PAWNSHOP, MELAKA || CHOONG XIN PAWNSHOP, KLANG VALLEY

The nature of the market for Joo Ngien Pawn Shop & Goldsmith and Choong Xin Pawnshop Sdn Bhd is monopolistic competition as both businesses operate differently from other businesses in the similar market. Both of these businesses sell unique products and is always changing constantly. Besides that, the pricing power of monopolistic competition is weaker as this type of business does have the full ability to charge the price higher than the market price. In order to maximize their profit, these business strive to differentiate their products 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 on experience to determine the quality, price and exchange value of the specific item. Even though technology is so advanced these days, Joo Ngien Pawn Shop and Goldsmith’s staff still 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 about everything that is going on in the pawnshop. Information about the shop, pricing of the items pawned, interest rates as well as the redemption period are the most common questions asked by customers.

Economy condition

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


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B) CHOONG XIN PAWNSHOP SDN BHD

Customer service

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

Security

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

Technology

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


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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 that their methods are too old-fashioned, causing them to go look for other pawn shops, banks or even 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 the bank as part of their contract with the government. Making it one of their major obstacle in running 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 for more advanced method of trading comparing to the old-fashioned way. As more and more platforms of trading and selling causes more obstacle for Choong Xin Pawnshop Sdn Bhd to run their business. Other competitors such as banks, online trading, and illegal loan sharks usually 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 made these days have been constantly increasing, Choong Xin Pawnshop Sdn Bhd have decided to use 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 be made and also requires servicing every few months.


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COMPARATIVE ANALYSIS SUMMARY TABLE

Competitive Traits JOO NGIEN PAWN SHOP & GOLDSMITH

CHOONG XIN PAWNSHOP SDN 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’s condition

Attract more customers due to having better prices compared to other pawnshops with fixed prices

Customer Service

Main priority

Staffs treat the customers very well

Do their best to accommodate to the customer’s needs

Security The safety vault is very

well-equipped with the latest security system

To ensure the safety of the goods stored there

Protected 24/7

Technology Prefer to use technology to

aid in their business To assist the business to

determine the price and quality of the item.

Easier to differentiate fake replicas compared to using the old traditional way

3. Barrier to Entry

High Barrier to Entry

Competitors

Customer of today would feel that the methods they use are too old-fashioned

Will prefer to go for other pawnshop or banks due to the old-fashioned way

High Barrier to Entry

Competitors

Most customers would prefer a more advanced method of trading

More and more platforms for trading in this day and age

Main obstacles are usually


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Bank Interest

Required to provide 1 % of their earning profits

Part of their contract with the bank

Major obstacle in running this type of business

from their competitors like banks and loan sharks

Technology Cost

Technology helps in determine the item is whether legitimate or counterfeit

Requires a small fortune to have one

Also requires quite a sum to maintain the machine as it requires servicing time to time

4. Differentiated or Standardized Products

Differentiated Products

As this type of business offers various types of product.

Differentiated Products

As this type of business offers various types of product.

5. Pricing Power Price Taker

Weak Pricing Power

This type of business does not have the full ability to charge the price higher than the market price

Price Taker

Weak Pricing Power

This type of business does not have the full ability to charge the price higher than the market price

6. Nature of Market

Monopolistic Competition

As there is only one pawnshop in that area, the pawnshop market in general is very low.

Monopolistic Competition

As they is only one pawnshop in that area, the pawnshop market in general is very low.


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

Joo Ngien Pawnshop, Melaka || Choong Xin Pawnshop, Kuala Lumpur

1. Brand Recognition

Current condition:

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

Recommendation:

Both pawnshops should package themselves properly. The pawnshop owners must expose themselves with the current modern technology. This way, they are able to widely promote their brand and slowly become recognized by the public. For example, owners can create a website to introduce what their pawnshop is all about, advertise events and promotions and announce 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’s history, manufacturer and also production methods. Pawnshop owners can even include coupons and incentives for customers to visit. They can announce visits by appraisers and antiques experts so that customers can plan to bring their items in for appraisal. Owners of the pawnshops can also share their expertise by offering classes on coin collecting or recognizing rare antiques, gold, and other items.

2. Changing Perceptions

Current 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 becomes the obstruction of their businesses from propelling forward. The perception that has been installed into people’s minds are that pawnshops are only meant for people coming from a low-income background. It is a false perception and it’s a perception that must be changed in order 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. One of the ways to expand the range of customers in pawnshops is to promote their brand name through any form of media. The public needs to know the pawnshop’s real objectives and purpose in order to attract new customers. Another way to change people’s perception is by widening the range of items that can be pawned. In the past, pawnshops used to have a wide range of items that can be pawned. Other than gold and diamonds, items like bicycles, sewing machines, even branded pens can be used to pawn. But nowadays, pawnshops in Malaysia are limited to only a few main items that the customers can pawn, which are gold, watches and diamonds. Therefore, the owners of pawnshops should really reconsider of bringing back the 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 expand the range of customers. By pawning items like antiques, people’s lives become easier in terms of financial strain. Environmental factors could even be incorporated in a pawnshop’s business through collaborations and proper planning of the whole business structure. This way, pawnshops will be recognized by the public with the change of perception towards pawnshops businesses. Thus, the people have more options than they may think after looking at what pawn stores can offer.

3. Customer Service

Current condition:

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

Recommendation:

All businesses can be benefited by providing exceptional customer service. Pawnshop owners can review the basics of good service with their staff and train them on the store’s lending and return policies. Owners must ensure that they understand the laws governing pawnshop transactions so that they can convey them to customers. Another thing pawnshops can do is always ask for customer feedback following a sale or service transaction with a feedback card. They can even include space for an email address so that pawnshop staff members can notify the customer about events, promotions and items of interest that become available 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 both pawnshops are done in a conventional way, which is normal looking. It reflects on how the owners are not really particular with the design of their shops. Even though the functionality and security of the shop are done properly with the systems serving its purposes, but both pawnshops 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 people always judge a book by its cover,that is why it is important to take note of the environment of the shop. Potential customers who see a dusty window crammed with items as they pass by the 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 display with 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 also subsequently carry out maintenance for their shop. After customers step inside, it is important to treat them to a clean, well-lit store with items clearly marked and sorted by type.

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

Boston: McGraw-Hill.

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

Harlow, Essex: Pearson Education.


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

Financial Times.

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

Pearson Prentice Hall.

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

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Hill.

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

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Retrieved November 23, 2015, from

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

money-at-a-price/

APPENDICESKlang Valley 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.


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

It shows the Chinese name of the pawnshop and a Malay translation of the pawnshop below the 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 transactions unlike the pawnshop in Melacca which is only a walkthrough.


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Klang Valley Pawn Shop:

Choong Xin Pajak Gadai Exterior Look


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

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

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


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Kuala Lumpur Pawn Shop:

Choong Xin Pajak Gadai Pawn Shop’s Interior


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

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 to carry out transactions. There is a notice board which enables staff and customers to view notices easily.


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Melacca 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 above the area of operation.

The pawnshop is located in a row of shop houses where the business is carried out on the ground 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 avoid competition in that particular area.


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Melacca 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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Melacca Pawn Shop:

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. The gold 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 be at the outer part of the pawnshop.

The transaction is carried out from the inside and outer side of the store which is separated from 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 and other valuable items for money only.

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


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Melacca Pawn Shop:

Joo Ngien Pawnshop Interior of the Pawnhop


This is the inner counter which is a high table top placed with equipment such as a special weighing 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 not able 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 other paperwork are carried out. The back part leads to their office and safe which is confidential and 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 where the workers stand to carry out trading or sales.

Workers only operate from the inner part of the pawnshop. They do not operate outside as the outer 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 worker works. The worker takes the gold out of the casing and shows the customer from the inner part 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 the steel bars whereby the transaction of money and gold is passed through the sliding window.


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Melacca Pawn Shop:

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 exterior of the pawnshop where the name of the pawnshop, the gold for sale display area and the area of sales (for customers) can be seen.

s

This is our group photo at the pawnshop.


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Interview SessionsChoong Xin Pawnshop, Melaka Interview

This interview is carried out between Ee Hui Teng and Mr Chin at Joo Ngien Pawnshop which 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 know more 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 into the business of selling foreign goods. When the consumers do not have enough money to buy the 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 between gold, or other valuables, and cash. For example, when a customer brings their valuables to the pawnshop, the gold will be calculated by gram. After calculating, we will offer the customer a 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? How long 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 they have pawned their gold, they will have to pay off the interest rate which is 1.5% per month in order 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 their pawned 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


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customer must redeem their gold and pay the interest. If the customer still doesn’t come back to redeem their gold after 8 months, the gold will then be brought to auction. After the auction, the gold will 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 most valuable 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 Kuala Lumpur and 1 in Johor.

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

Interviewee: I am not very clear about the history of this shop. But generally speaking, in the past, most of the Hakkas are involved in this business. This is most likely how this business first 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 faces competition from banks which causes a decrease in business opportunities. Nowadays, banks too have pawn business so customers have a wider range of choice to select where to pawn their valuables.

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

Interviewee: Yes, the competition in this business is quite strong. Our main competitors are banks such as Agro Bank and Bank Yapin. There are also other pawn shops such as Lian Sheng 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, the higher the chance that customers will approach the pawnshop to pawn their valuables as they do 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 this business in the past. However it is harder to enter in the present day because competition in this business is very strong due to the presence of more competitors. Not only that, the economy now is not as good compared to the past. Therefore, the business revenue is not as high as before.

Interviewer: What are your strategies to compete with your competitors? How would you 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 customer service 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 a valuable is being pawned by the customer. We can make adjustment on the pawn price by ourselves and it is not necessary for us to follow any listed price in our own business. This allows us to offer a special and higher price for loyal customers.

Interviewer: Are your pricing decisions strongly affected by your competitors? For example, 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 order to run this business?

Interviewee: The person needs to have the ability to identify the value of gold, diamonds and watches. This ability can be learnt through experience. It hard to identify using instruments because with the technology today, people are able to create fake valuables which might not be 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, Klang Valley Interview

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

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

Interviewer: Hi. We are students from Taylor’s University and we would like to interview 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 the business?

Interviewee: The founder of this business is Ho Ying Chai. I was not born when the business first started, but I have heard stories on how he brought started his pawnshop business in Malaysia. As Mr Ho and his family migrated from China, this pawnshop business has already been practiced back there and then in China. So later on when they migrated, they brought this business into Malaysia. They were not first to start this business in Malaysia because pawn business has already been operation during the 1950s in Malaysia long before our company started. When they arrived in Malaysia, they had the chance to familiarize with the operation 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 operated in a simpler way. Pawning is a trading system. When a person is in need of cash, that person will bring his valuable to exchange it for cash. In short, the customer give us a valuable item in which we set a value to it. We keep the pawned valuable item and loan cash to the customer in return. After that, if the customer is able afford the initial pawned cash value and pay 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 6 months, the customer needs to return cash and the charged interest in order to redeem his item. If the customer is unable to pay the initial cash price and charged interest, he can choose to extend the redemption date for another 6 months. However, he must pay the interest rate for each month.


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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, his item will be brought to auction to see if anyone wants to buy it. If the valuable is sold during the auction, the capital will be returned back to the shop while the profit made from the auction will be given to the owner of the valuable.

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

Interviewee: Most of them will redeem their valuables back because their financial problems they face are only temporary. All they need is a cash turnover. Most of them do not want to sell 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 other shops do accept watches and pearls too. However, in the past we received bicycles, sewing machines 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 we were to differentiate by ethnics, it depends on the geographical location of the shop. For example, if the location of the pawnshop has a high population of Indians, then most of the customers will be Indians. As an example, in KL, there is a higher population of Chinese people, so the pawnshop customers are mostly Chinese. If we were to see it in a bigger picture, on average, there are more Indian and Malay customers compared to Chinese customers. However, an actual and accurate percentage is difficult to be calculated.

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

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 the pawnshop business?

Interviewee: The information I have on pawnshop history are mostly information after the 1950s-1960s in Malaysia. Pawnshops are known as a traditional financial company. The business does not only exist in China, the business exists even in India and Europe. The pawn business is practiced even more around the 17th or 18th century. However, the business has existed even longer in China, maybe around 1000 to 2000 years of history. In Malaysia, the business is not practiced as long as in China. Before the Malaysia’s Independence Day, the Chinese have brought in the pawn business from China. During that time, Malaysia is governed under the British and the British thinks that this business is a method to financially


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help people in certain regions. At that time, banks do not provide sufficient service to the people and this is the reason why the pawnshop business is accepted by the society. The business is then governed by the local regional government because there is no parliament at that time. As example, places like Jatung or Kajang. This has continued even after the country’s independence. Instead, the business is being governed under the finance ministry. If we were to talk about the pawnshop business in general, we did not have any computers in the past. The gold received from the customer will be weighed by using a lever-balance and the 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 using ball 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 operation of this business develops with the development of technology.

Interviewer: Recently, there is a saying that pawn business is a sunset business. Do you agree 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 believe that there won’t be a sunset for any financial company. In the olden days, when cash is not used 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 the society, it means that banks will too because they share the same nature of business. Now that our living standards are higher, the business revenue might be lesser but this does not mean that there is no revenue at all. It also does not mean that the entire society do not need this type of organization anymore because it functions to solve problems faced by people with middle to lower range income. Therefore it won’t distinguish. However, the business might that be as profitable as before. It will not have high volume but the business will is considered more 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 be calculated that way. All pawn shops are like different individuals. So far there are more than 400 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 different from before. Customers nowadays will compare the value they can get from different pawn shops unlike the customers in the past. So this creates a strong competition. If you are unable to provide the customer good service and price, they will shift to another shop.


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Interviewer: How do you compete with each other?

Interviewee: I think that customer service is the most important factor. For example, if you go to a bank, you will have some enquires and I will grade their service provided. If they do not provide 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 service the most important strategy to compete with other pawnshop business.

Interviewer: How much capital is required to start this business? Are there any specialized 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 this business. However, since the Malaysian currency is getting smaller now, you might need around 5-6 million as the start-up capital. It also depends on the location of your shop. Some locations might need up to 10 million capital. The knowledge needed will generally be the ability to identify or determine the value of the items you want to receive such as gold. You can not only receive gold as deposit, you may receive watches too. Nowadays, a watch may be worth up to 500-600 thousand ringgit. You may also receive jewelleries. It depends on what item you want to receive as deposit and you need to have the knowledge in order to identify the value of the item. I think that stamps are also acceptable. Maybe a 1 cent stamp can be worth around 200-300 ringgit. As long as you have the knowledge, then I think it should 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 you identify and tell apart the real from the fake

Interviewee: 60% is based on experience and the other 40% can be based on technology. The technology 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 of technology. So there is a competition between the creation of replicas and the invention of instruments to identify the replicas. In such cases, experienced elderly are able to identify the genuine item more accurately.

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

Interviewee: Yes. We need to train our staff to be able to differentiate the valuables. At the same time, we also need instruments to aid the staff. This is why I say that 60% is based on experience while 40% based on instruments. However, it may be 90 to 100% based on


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experience in the past but it is not applicable nowadays because the replicas look too real to be 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 ways to improve and learn. Business with no improvements will be eliminated by its. In-depth knowledge 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 and monitor your staff’s attitude because it is considered a service line. You also need to know the economy of the gold, whether the price will increase or decrease in the future. So it is not a very easy business.

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

Interviewee: I think the most important is customer service. Other than that, since we receive interest from our customers, we may charge them a lower interest rate (lower than 2%) or pay them a higher loan, for example, offer them RM150 for valuables which might be only worth RM100. All these can be strategies to compete. However, I still think that customer service is prioritised because living standards are higher now.

Interviewer: Is any limit on the loan you offer to your customer? Like a price floor or a price 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, the maximum amount of interest charges is 2%. There is no minimum amount of interest required to be charged. So it is possible that you might not charge any interest to your customer. 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 the owner or staff of the pawn shop.


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

Interviewee: Generally speaking, our loan price is not strongly affected because we cannot offer a price too high. Offering a high price will create a very high risk because the gold price may drop at some point in time. It may cause financial problems as you will lose a lot of money. So if you want to operate this business, you will need to be able to predict the gold price 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 offer RM140 to my customer. Others may think that you are offering too much but it actually depends on the operation knowledge you have. If you predict that the gold price will fall in the future, as example the gold worth RM100 now will only worth RM50 6 months later, then you 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 the itinerary 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 GROUP MEMBERS

TUTORIAL GROUP

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 the itinerary 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 GROUP MEMBERS

TUTORIAL GROUP

ROLE

Justin Chong Yong Sheng Friday Cover page/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 start working on it.



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CONCLUSION It 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, Melaka based on the comparative analysis done. This conclusion is supported by the evidences obtained 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 strategic location, incorporate advanced technology, focuses on customer service and higher efficiency.

Firstly, Choong Xin Pawnshop has a more strategic location compared to Joo Ngien Pawnshop. Choong Xin Pawnshop is located at Kota Damansara which is a township located in Petaling Jaya, Selangor, Malaysia. It is spread across 4,000 acre (16 km²) of land. It is also a state seat constituency which is sandwiched between Shah Alam and Petaling Jaya. Notable landmarks located within the constituency are the old Subang Airport and the Rubber Research Institute of Malaysia. On the other side, Joo Ngien Pawnshop is located at Alor Gajah which is the district seat of the Alor Gajah, Malacca, Malaysia. It located on north part of 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 Joo Ngien Pawnshop’s as it is located at a highly populated place. Therefore, this lead to more customers to visit Choong Xin Pawnshop in overall.

Secondly, Choong Xin Pawnshop has incorporated advanced technology in their business but Joo Ngien Pawnshop did not. From our interview conducted, we found out that identification 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 to lower the risk of the business because the business will not face problems of being fooled by their customers who want to use real-looking replicas as deposit for their loan. Joo Ngien Pawnshop identifies replicas based on experience which may result in the occurrence of human error as replicas created nowadays are not much different from the original ones. This aspect is very crucial to the business because the business will need to bear great loss if this mistake is made. For instance, a replica worth only RM100 can be perceived as an original product which worth more than RM1000. If the pawnshop fails to identify the replica, they will 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 Ngien Pawnshop puts their focus on the price of their product and loan interest. The perception of success of a business is often dependent on employees who can adjust themselves to the personality of the guest. Our interviewee representing Choong Xin Pawnshop believes that good customer service experience can change the entire perception a customer holds towards the organization. Therefore, Choong Xin Pawnshop concerns the priority an organization assigns to customer service relative to components such as product innovation and pricing. In this sense, Choong Xin Pawnshop which values good customer service spend more time and


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money in training employees than Joo Ngien Pawnshop. From our observation obtained when we visit the shop, we find that the workers at Choong Xin Pawnshop are friendlier and they welcome every customer with a smile. All of this leaves a good impression to the customers and may lead them to come back to the shop again.

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

In a nutshell, we have come to a conclusion that Choong Xin Pawnshop is more commercially successful compared to Joo Ngien Pawnshop. This is due to the factors stated above, namely strategic location, advancement of technology, good customer service and high efficiency.


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

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

Retrieved November 23, 2015, from

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money-at-a-price/

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

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

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

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

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6.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,

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

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