End of fairytale for OSIM

On 29 August 2016, OSIM ended one of the most incredible fairytales in the corporate world and was de-listed from the SGX market. OSIM’s turn-around story reflected the resilient and determination of founder, Ron Sim in coming back from adverse conditions. After all, successful turn-around cases are so rare in Singapore.

One of the most admirable traits of Ron Sim is his business acumen and never-say-die mentality. In 2009, he made the difficult decision of writing off OSIM investment in US retailer, Brookstone, after it registered a loss of almost $100 million the previous year. Many investors lost faith in the management abilities and at the lowest point, many dumped the stock, sending it crashing to $0.05 per share.

Instead of viewing the whole episode negatively, Ron deemed it an “enriching” experience because of the lesson learned on the US market. Not many business leaders can overcome the sort of setback that Ron Sim encountered. At that point of time, with the onset of the Great Financial Crisis, it certainly seemed like the massage armchair company was doomed.

But what he managed to achieve the following years was simply unbelievable. Following the Great Financial Crisis, he correctly predicted that the money to follow would be the Chinese market. Hence, he concentrated OSIM’s firepower in China and opened hundreds of outlets to capture the market share over there. To fend off competition from copycats, OSIM constantly released new innovative products so that its rivals had a hard time catching up.

But his master-stroke was re-inventing OSIM into a lifestyle company instead of being a traditional technology enterprise. To achieve this, it acquired and successfully integrated GNC and TWG Tea brands with OSIM. In addition, Ron Sim was smart in using Asian celebrities to market his products. In doing these, he had created a very powerful OSIM brand that appealed to Asians with high purchasing powers.

Ron’s effort paid off handsomely as sales rocketed for the next few years. In fact, in 2014, OSIM had recorded 21 consecutive quarters of profits. What a fine run! Due to this, the company’s share price surged to a high of $2.80. Investors who bought at $0.05 level during the financial crisis would have laughed all the way to the bank.

Indeed, there are many important life lessons that can be drawn from OSIM’s epic comeback. Firstly, never give up and have faith in yourself. You learn from failures and subsequently adjust your strategies and give it a go again. The more experiences you gained from failures, the closer you will be to your goals.

Secondly, sometimes in life, you need to take calculated risks in order to succeed. When OSIM was trading at $0.05, not many investors had the courage to buy the shares. Market sentiments were so terrible back then and not many people were optimistic that Ron can salvage OSIM. But if you were bold enough to invest $5000 in OSIM in 2009, you would have made at least $100,000 in 2016. Even if your judgement was wrong, you probably would not lose your pants. Indeed, fortune favors the brave.

But taking risks is different from gambling. You must have a strategy in placed to increase your odds of winning. And you must have the discipline and will to learn from investment setbacks.

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Magically yours,

SG Wealth Builder