MR RAJAKUMAR Chandra, 50, learnt all about the harsh realities of a recession when his family's Little India business lost $150,000 during the 1997 Asian financial crisis.

Until then, Jothi Store And Flower Shop - which sells cosmetics, religious objects, utensils and food staples, mostly priced under $10 - had been growing steadily at an average rate of 15 per cent every year.

But bulk buyers started defaulting on payments and turnover stagnated at $5 million that year. It started picking up, together with the economy, only at the end of 2003.

Now with a bigger crisis at hand, export orders have tumbled by 60 per cent and sales have fallen 15 per cent. But Mr Rajakumar has a bold plan to grow his $18 million turnover by 20 per cent to $21 million within the next three years.

After being burnt by debtors more than a decade ago, he has banned credit for those with poor payment records. From these buyers, he accepts only cash.

He has also used savings from property tax rebates, announced in the recent Budget, to cut the prices of staple products like coffee and rice in order to reel in new customers.

He hopes to double his non-Indian clientele from 20 per cent to 40 per cent, and is spending up to $150,000 on advertising, which will include the Chinese and Malay media.

Another strategy looks to the longer term. He is spending up to $30,000 on customer service training courses for his Tamil-speaking staff with the Workforce Development Agency and the Little India Shopkeepers and Heritage Association, of which he is chairman.

Jothi Store was started by his father, Mr M. Rama Chandra, 78, as a 250 sq ft rented sundry goods and flower stall along Campbell Lane in 1960.

After earning a computer science degree in Canada in 1985, Mr Rajakumar was initially reluctant to take over the business.

But as the only son (he has three sisters), he ended up running the store when his devout Hindu father spent two months on a pilgrimage in India in 1986, and he found it to his liking.

The then-rookie boss struggled to keep up with sales, filing and purchasing. At his lowest ebb, he even got the telephone line cut when he forgot to pay the bills.

Today, Jothi has expanded into a five-storey department store along Campbell Road. It sells about 10,000 made-in-India items, including henna hair dye and skin creams, and hires nine family members and 25 other employees.

Mr Rajakumar, who hopes his 14-year-old son will take over from him in 20 years, is optimistic about Jothi's prospects.

'Unemployment is not widespread now, and as long as people are employed, they will have money to spend. Business will be steady and I expect growth once the overseas markets pick up,' he says.

CASSANDRA CHEW

This article was first published in The Straits Times.