[This article is a paid feature with HSBC.]
If you’re a fan of instant coffee or tea, you would’ve heard of a brand called Chek Hup. Their products are available on the shelves of markets nationwide, from small stores like 7-Eleven to large-scale supermarkets like Aeon. But the brand didn’t grow in popularity overnight.
Founded in Ipoh in 1965 by the late Tan Soo Hor, Chek Hup originally started its business by selling rock sugar to the Malaysian and Singaporean markets. Then in 2000, the company ventured into the instant beverage market with the Chek Hup 3-in-1 Ipoh White Coffee.
Since then, they’ve added new products such as teh tarik, chocolate drinks and gourmet coffee (with rock sugar on a stick) under their belt.
One ever-present ingredient? Rock sugar. It is known as a healthier alternative to processed sugar. While processed sugar might be cheaper in terms of cost, they believe in sticking to their roots and prioritise taste first instead of going for the profit-focused route.
Bringing Rock Sugar Coffee To International Markets
For an ambitious company looking to grow and expand, it is not enough to just rely on the domestic market. And this is why in 2003, Chek Hup decided to revamp its business model and began its expansion in the Asia Pacific.
To scale up its export business effectively, Chek Hup sources its coffee beans from neighbouring countries while maintaining its production and assembly operations in Malaysia.
Furthermore, Chek Hup also relies on HSBCnet (HSBC’s digital banking platform), which conveniently authorises payments across 15 markets in the Asia Pacific, to manage the company’s coffee trade in Southeast Asia efficiently.
Did You Know: Malaysia is the world’s fourth largest exporter of coffee extract. In 2017, Malaysia exported around RM2 billion worth of coffee extracts to China, Thailand and Indonesia.
Managing Foreign Exchange Smarter
With such a robust export business, it is of great importance for Chek Hup to be able to minimise its foreign exchange risks and have complete visibility of its foreign exchange exposure.
This is made possible with the use of HSBC Evolve, an interactive platform that provides Chek Hup with access to HSBC’s depth of liquidity with over 460 currency pairs for their hedging requirements.
With HSBC Evolve, transparent live pricing is available from SPOT to forward, and rates can be booked easily with just a few clicks.
Dictionary Time: Spot pricing is the price of a commodity that is bought and paid for at that time, instead of predicted or future pricing. Example: Gold is worth RM300, but could be worth RM500 in the future. But since you’re buying it now, you just pay RM300.
Looking to the future, Chek Hup has set its sights for further growth within China as the nation embraces the coffee-drinking culture. And thanks to their partnership with HSBC, Chek Hup can tap into HSBC’s wealth of knowledge and an understanding of the market dynamics in China.
And they’ve already made their first step. In 2019 on Single’s Day (11/11), Alibaba Group revealed that Chek Hup was 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 been supporting its clients at every stage of their journey with its well-established global network and expertise in international trade.
It is very useful to have HSBC when we want to understand the market. They are our first partner whom we go to find out more actual information for us to make good decisions.
Joseph Tan, Managing Director, Chek Hup
- For more information on HSBC’s banking solutions, click here.
Featured Image Credit: Chek Hup