Investing RM500,000 into a retail shop operated under the aegis of the government, the "Madani Mart" initiative is likely to join the scraps of many government `driven initiatives’ to quick launch individuals to become entrepreneurs.
According to Yayasan Madani (Yayasan), Madani Mart outlets are not government-funded, and entrepreneurs who want to run one may need to invest up to RM420,000.
Each outlet will be fully owned and managed by individual entrepreneurs.
And what each entrepreneur gets from the Yayasan, for a service fee, are,
- Competitive Pricing: Access to quality goods at competitive market rates.
- Setup & Tech: Assistance with renovations, equipment, point-of-sale (POS) systems, and CCTV installation.
- Training: Full staff training and marketing assistance.
- National Initiatives: Participation in strategic government schemes like Jualan Rahmah, Sumbangan Asas Rahmah (SARA), and Sumbangan Tunai Rahmah (STR)
For the services that the Yayasan tout each entrepreneur will get from the Yayasan, it is obvious that the Yayasan will outsource the needs to outside expertise as the office bearers has zero and relevant experience in this venture that they launched.
Who and where will be the source of funding to engage all these experts?
Grocery retail is low-margin, high-volume.
An individual operator might see high traffic but low profitability, making it difficult to cover high fixed costs like rent.
Efficiently managing thousands of SKUs (stock-keeping units) to ensure shelves remain stocked while minimizing spoilage is highly complex and not something you can teach and train.
KK Mart, Speedmart 99, Mydin, MyNews, Bila Bila, just to name a few have established partnerships with manufacturers, enabling them to buy in huge bulk to lower unit costs and get favorable terms.
Is Yayasan planning to leverage on their political affiliation to get favourable terms and lower unit costs?
Does the Yayasan have the infrastructure i.e logistics and distribution centres throughout the country to ensure all the newly minted entrepreneurs i.e those individuals signing up to join have a seamless and efficient supply chain supporting them or the Yayasan is outsourcing this to the suppliers?
There are numerous facets to running a business.
Numerous methods to carry out operations, with options and variables.
Just look at Speedmart 99. In their prospectus for listing on Bursa Malaysia, 99 Speedmart disclosed that they earned roughly half its income from "other operating income"—fees from product display, target incentives, and distribution—a revenue stream smaller operators cannot demand.
As one of the founders of Bila Bila Mart mentioned, their opex, rental, labour, utilities are around 20-25%.
Anything lower, they are running at a loss.
All of the above retail chains are built on "last-mile convenience" within residential areas. They have already secured prime spots in many housing estates, making it difficult for new, smaller players to find equivalent high-traffic locations.
As they grew in the number of stores, they can afford high rent in prime areas because they possess high transaction volumes, whereas a smaller shop may struggle to pay rent.
In essence, all these are not retail shops but are sophisticated distribution and logistics networks that leverage extreme purchasing scale.
An individual shop buys from wholesalers while these stores buy directly from manufacturers.
Who are the office bearers in the Yayasan?
None of them are entrepreneurs nor have their started any businesses before nor do they demonstrated they possess extensive and deep knowledge of the retail industry they are advising on.
What they are rolling out is a noble initiative but misdirected and misguided.
The office bearers of the Yayasan should just focus on their political career instead of rolling out this Madani Mart scheme.
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