“I visited the Mara Digital Mall at Jalan Tuanku Abdul Rahman in Kuala Lumpur recently, on a Monday afternoon during lunch hour to see for myself the business activity at the retail outlets.
“This digital mall was originally initiated to rival the digital and IT offerings of Low Yat Plaza back in 2015 by the then Minister for Rural Development and now Prime Minister, Ismail Sabri Yaacob.
“Six years later, this government-sponsored initiative has clearly failed its original intentions,” said Ong in a statement today.
He said that the ground floor of the mall, usually prime space for exhibitors to display their digital and IT products, sits empty.
“All the retail stores on the ground floor are selling Food & Beveridge (F&B) products, mostly to the employees of Mara Corporation and the government agencies which have their offices there.
“Some of the retail outlets have been converted or rented out to retailers selling non-IT products including stores selling fashion products, a DIY store, and a hair salon which also offers massage/facial/manicure/eye treatment services.”
Don’t repeat past mistakes
Ong said that the main reason for his visit was Ismail Sabri’s Nov 18 announcement for proposed quotas for Bumiputera-owned businesses in strategic locations such as shopping malls to increase the community’s participation in the economy.
This was proposed as part of the Bumiputera Development Action 2030 (TPB2030) that sits under the Bumiputera Prosperity Council (MKB), which is chaired by the Prime Minister.
Ong said that this move reminded him of the phrase – “those who cannot learn from history are doomed to repeat it”.
“On the anniversary of the 50th year since the start of the New Economic Policy (NEP), it seems that many of our leaders have not learned from the mistakes of the past and seem to be keen to repeat these mistakes repeatedly in coming up with “new” government policies that are supposed to help the Bumiputera community in various economic sectors.
“Please do not misunderstand my intentions here.
“I very much want the Bumiputera community to succeed in business and to have access to job and economic opportunities in the same way that some other communities and business groups have succeeded.
“But the underlying business proposal must be sustainable, resilient to market competition and able to foster innovation and creativity,” he said.
He highlighted that Mara digital malls were suffering losses even before the start of the Covid-19 pandemic.
“Articles before the start of the pandemic were already reporting the challenges which these malls were facing including the flagship mall at Mara Corporation in Kuala Lumpur.
“Mara Digital Kuantan closed in December 2018 and Mara Digital Johor Bahru closed in February 2019.
“I don’t think the lack of success of these digital malls was because Bumiputera businesses cannot succeed in certain areas such as IT and digital retail. The main reason for their failures is that the underlying business concept was flawed from the beginning,” he said.
Ong said that by positioning itself as a digital mall for Bumiputera retailers only, the concept had inevitably discouraged non-Bumiputera customers and even foreign tourists from patronizing these outlets.
“Since the non-Bumiputera community and foreign tourists in large cities have significant spending power, this business strategy unnecessarily alienates these potential customers,” he added.
He said that another factor was that many of the retailers at the Mara Digital Malls had to depend on a single distributor – WGN Scan Sdn Bhd- for its products which made the price points for many of these products uncompetitive.
Finally said Ong, it was very difficult to prevent political interference and rent-seeking activities in such business initiatives once the government is involved in its conception and execution right from the start.
“Different people will try to have their “hand in the pie” for short term gain which decreases the financial sustainability of these initiatives in the long run.
“A limited number of well-connected people gain but ironically, not the Bumiputera traders and retailers, which is the community that the government wants to help through these empowerment programs,” said the DAP man.
Citing Farm Fresh milk and AIl IT hypermarket he said that were many examples of successful partnerships involving both Bumiputera and non-Bumiputera entrepreneurs in the country especially in the technology sector where innovation and capabilities are recognized and rewarded and where execution is key, regardless of the ethnic background of the entrepreneurs.
This is a more sustainable and inclusive business model where a non-Malay privately held company can provide good quality jobs to all Malaysians including a significant number of Malays in an environment that is professional and pleasant to work in and where the customer satisfaction (and presumably, employee satisfaction) is high, said Ong.