Modernising traditional businesses

Publication: NST

Date of publication: Dec 9, 2013

Section heading: Main Section

Page number: 009

Byline / Author: By R.S. Kamini

A HIGH-INCOME nation's progress is not reflected just through the development of major economic sectors but also the regular mum and pop shops.

In line with the government's effort to transform Malaysia into a high-income nation by 2020, the Wholesale and Retail National Key Economic Area (NKEA) is expected to contribute RM55.4 billion worth of Gross National Income (GNI).

It's also expected to create more than 450,000 jobs in the next 10 years through 12 Entry Point Projects (EPPs).

The EPPs identified will not only increase domestic consumption but also provide avenues for local businesses to easily break even.

One of the main EPPs in focus is the Retail Transformation Project (TUKAR), which aims to modernise traditional retail shops; increase the competitiveness of local small and medium enterprises; enhance customer service capabilities; standardise the quality of business processes; promote a cost-effective and efficient supply chain; encourage the sale of quality products and prepare retailers for the implementation of the goods and services tax (GST).

Domestic Trade, Cooperatives and Consumerism Ministry's Delivery Management Office (DMO) head Mohd Fariszan Ahmad says his office has been tasked with upgrading 500 traditional retail shops every year.

"We have exceeded our KPIs in the last two years. In 2011, we upgraded 511 shops and 568 last year. We will definitely meet our target for the year.

"We have RM40 million in soft loan set aside for TUKAR. Each applicant is entitled to get up to RM80,000 worth of loan for stock and equipment purchase and renovation or upgrading of premises. Training will be provided on equipment usage, point of sale, barcode scanning and others to facilitate transition and ease adaptability," says Mohd Fariszan.

The ministry, he says, provides two training courses, namely motivation and networking and stock and customer management skills, while an identified local consultant will advise and guide them on sales-related matter.

"Our biggest challenge is to change the mindset of these retailers, especially if it's a family business. Changes are always difficult when they are in their comfort zone. To change the working style to include norms like bookkeeping, stock take and check, rearrangement of stock, item display and refurbishment of stores will take some time," says Mohd Fariszan.

"We are also looking into possibilities of including e-payment counters at these shops for customers to make online payments for various bills.

"This provides an added advantage in increasing customer flow and competitiveness. To date, TUKAR programme participants have experienced an average 50 per cent increase in sales," says Fariszan.

Apart from the TUKAR programme, the ATOM (Automotive Workshop Modernisation) programme is another EPP that enhances the standard of the automotive sector while allowing mechanics and technicians to increase their earnings.

ATOM modernises and transforms the automotive maintenance service sector by elevating the industry's workforce earnings from low-income earners to medium and eventually highly paid professionals.

It also exercises transparency on pricing, skills and professionalism during and after sales service activities to obtain public trust and recognition.

ATOM programme participants, who has workshops that does not exceed two unit of shoplots, or 2,500 square feet, can apply up to RM100,000 loan as working capital to upgrade their premises, purchase machinery and equipment.

"Workshops are more difficult to transform as they are scattered all over the country. To date, we have upgraded about 178,192 workshops under this programme," he adds.

One of TUKAR consultants is Tesco Stores (M) Sdn Bhd.

Its Project Manager (Commercial) Mohamad Harith De Souza Abullah says his full-time project team generally advises the participants on improvements they should make to their premises based on a detailed assessment and measurement of the shop.

All participants, he says, are trained on the importance of a new shop layout, correct merchandising methods, product ranging and displays, stock and inventory management, supplier management and ordering, POS usage and reporting, marketing, new value-added services, shop housekeeping, administration and security aspects.

Apart from TUKAR and ATOM, the ministry is focusing on four other EPPs this year, namely the development of Makan Bazaars; increasing promotion of duty-free products sales outlets; organising 1Malaysia Unified Malaysia Sales and increasing Large Format Stores.

"To date, we already have two Makan Bazaars, one in Big Boulevard Oasis Square, Ara Damansara, and the other in Mall of Medini, Nusajaya, Johor. Our KPI is to launch one such bazaar featuring an array of local delicacies catering to low- and high-end customers all under one roof. This is bound to be a tourist attraction.

"The 1Malaysia Unified Malaysia Sales provides integrated sales discounts in 52 sub-sectors, including the service sector, and not just at malls.

"The Large Format Store development will see the establishment of six hypermarkets and 10 super stores. Most of these will require cooperation and investments from the private sector and we are confident of achieving these within the stipulated time period," concludes Mohd Fariszan.