Question of quota

A number of shops at this mall in Kuala Lumpur are shuttered.

A YOUNG boy is seen riding a mechanised toy animal while his mother watches him as she clutches several shopping bags.

Around them are a row of shuttered shops, with several others sporting “for rent” signs.

Inside the mall in Kuala Lumpur, this dismal atmosphere is common.

A similar scene can be observed, even on a weekend, at a once-bustling neighbourhood mall in Hulu Kelang.

It is not because the retail sector has taken a nosedive during the Covid-19 pandemic.

Some say it is due to intense competition resulting from the mushrooming of newer malls in recent years, while others blame the current economic uncertainty.

Amid this tough time, the government is mulling over introducing a quota for bumiputra retailers at certain shopping centres.

On Nov 18, Prime Minister Datuk Seri Ismail Sabri Yaakob said the quota would be to foster the socio-economic development of bumiputra entrepreneurs.

While some have lauded the proposal, there are others who are not as enthusiastic.

Bumiputra Women in Business and Professions Association president Datuk Azlin Ahmad Shaharbi asked why there was a need to encourage bumiputra retailers to operate at premium malls.

“The key question here is why are they trying to get into these malls in the first place?

“The goal in business should be about making profit.

“If retailers can make profits operating from Menara Mara, for example, what’s wrong with that?” she queried.

Azlin stressed that it was important to identify the target customers for a mall, and assess if these retailers fit the criteria.

“The malls may have their target market, and the products offered by these entrepreneurs may not appeal to those shoppers,” she pointed out.

Ameer says this is the right time to implement the quota policy.

Bumiputera Retailers Organisation president Datuk Ameer Ali Mydin has a different opinion.

“The unfortunate reality is that some of the retailers cannot penetrate the market.

“There are plenty of capable and well-known bumiputra retailers in all sectors, but they are not given a chance.

“Look at Mydin for example, which is now the third biggest hypermarket chain in Malaysia.

“We are not asking for places to be taken away from other races, we only want a level playing field,” he said.

Ameer said the government must be sincere if it was serious about implementing the plan.

“Don’t just pay lip service, otherwise this will be seen as trying to score political mileage before the upcoming general election,” he added.

Malay Chamber of Commerce (DPMM) president Dr Abd Halim Husin said smaller entrepreneurs faced an uphill task in renting shoplots in malls.

Abd Halim says bumiputra retailers must be placed at strategic locations in malls, alongside the big brands.

“Many malls prefer to rent to big brands as those names will attract shoppers.

“This means that smaller players will be left out,” he said.

As such, he viewed the government’s proposal positively.

Azlin said operating in premium malls meant there were other factors that must be considered.

“It is not just the rental cost, but there are other prices that will rise too, such as increased manpower and equipment costs.

“These entrepreneurs must ensure they can fulfil the contractual obligations, otherwise their tenancy will be terminated,” she said.

Azlin also said that the imposition of a quota raised the question on whether malls could find enough bumiputra retailers to rent to.

“What happens if these malls cannot find enough tenants?

“Will these unrented premises remain empty?

“That will prove costly for the malls, which success is vital to power our economic recovery,” she highlighted.

The ongoing Covid-19 pandemic – resulting in a sluggish economy – has raised the question as to whether this is the right time for a policy on bumiputra quota in malls.

In Azlin’s opinion, it is not.

“The retail sector is still recovering.

“Given the current Covid-19 situation, we are unsure if there will be another lockdown or what the standard operating protocols will be in future.

“Amid this uncertainty, is it really the time for these entrepreneurs to make the jump into premium malls?” she added.

Ameer, however, said this was precisely the time to implement the quota policy.

He pointed out that during normal times, smaller retailers often got passed over as malls preferred bigger brands.

“At present, many malls are having many empty lots.

“By the time the economy recovers, these spots will be snapped up, giving these malls an excuse to turn down applications from smaller brands,” he said.

Ameer proposed that the malls implement a “gross turnover of sales” approach to determine the rental fee during the Covid-19 pandemic.

“Using this method, the fee is calculated based on a percentage of the sales. Some malls are already doing this.

“With this approach, the malls stand to collect more from rental as business picks up when the economy recovers,” he said.

Fine-tuning needed

DPMM said the government must also ensure that bumiputra retailers were placed at strategic locations in malls, alongside the big brands.

“These entrepreneurs must not be pushed to areas with less footfall, otherwise the policy will fail to achieve its objective.

“This is also to encourage a healthy mix of shoppers from all races and prevent polarisation,” said Abd Halim.

Ameer shared his views.

“The government must ensure the quota is allocated by premises types, such as shops and kiosks,” he said, elaborating that some malls might count kiosks in their quota fulfilment.

Some quarters have pointed to Mara Digital Mall as a reason not to implement a quota favouring a specific race.  

Launched on Dec 8, 2015, the mall was meant to be an outlet for bumiputra retailers to market the latest electronics and gadgets.

Despite being located near tourist and shopping hotspots such as Jalan Tuanku Abdul Rahman and Sogo shopping centre, the Mara Digital Mall failed to flourish.

A visit by StarMetro to Level 3 of Menara Mara earlier this month found many empty shoplots, with only a few shops still operating.

But is the Mara mall’s lack of business a result of it being an establishment exclusive to bumiputra entrepreneurs?

Bangi MP Ong Kian Ming does not think that is a factor.

“The main reason is because the underlying business concept is flawed from the beginning,” he told a news portal recently.

Workers at the mall who spoke to StarMetro, which published a story on Dec 18, 2019 about the state of the digital mall in Menara Mara, said a monopoly by a single supplier was limiting their options and driving up prices.