FOUR aspiring entrepreneurs – Shaari Abu Hassan, Rahmat Sulaiman, Michael Lim and Mohd Shawal Omar operating mom-and-pop shops in far flung corners of Malaysia found themselves in the same boat late last year.
Sales were slowing, qualities of stocks were deteriorating and fewer and fewer customers came-a-calling.
They had started optimistically, believing they could carve their own niche in the smaller towns.
However, after nurturing their business for about three to five years, in one case, it was 10 years, they found themselves starring at potential "closure" and unrealised dreams.
Then in January this year, the Government threw them a life-jacket. This came in the form of Tukar — the small retailer transformation programme (or Program Transformasi Kedai Runcit).
It focused on assisting small retailers to modernise and remain competitive. In addition the programme came with a coach; in the form of a big brother, Giant, the largest retailer in Malaysia.
These four entrepreneurs — Shaari in Permatang Pasir Penang, Rahmat in Sibu, Lim in Penampang, Sabah and Shawal in Segamat Johor are just some of the many given a fresh start with the assistance of Giant.
Launched in January this year by the Trade, Cooperatives and Consumerism Ministry, Tukar is outlined in the Economic Transformation Programme as one entry point project (EPPs) aimed at modernising traditional retail or convenience stores to enhance their competitiveness in an increasingly competitive environment.
The programme, requires the involvement of the large-format retailers, such as Giant, to support small retailers by
*Improving the quality of the overall business processes
*Modernising and upgrading the existing premises of retailers
*Promoting cost-effective supply chain management
*Encouraging the sales of quality products through diversification
The entrepreneurs told Star Metro in recent interviews that the impact of the transformation is almost immediate.
Sales have risen sharply since the makeover. Between the four of them, sales increased between 30% and 75%; and they believe the number will continue to grow.
For Shaari, the owner and operator of Kedai Runcit Shaari, the decision was easy; as he strongly believes that there are many advantages to the makeover initiative by the Government.
"The makeover is like a promotion in itself. When my customers see the changes made to the store, they like it! The shop looks brighter, neater and more systematic. The change is good for me as well as for my customers.
"And my customers hear so much about the makeover initiative in the news and it is good publicity for my shop as well. The feedback from my customers are very positive and encouraging," said Shaari.
"My shop was completely transformed in August and since then, I am happy and so are my customers. Now I get my all my stocks, everything, from Giant, and they are cheaper than my previous suppliers,'' he said.
Another deciding factor for Shaari was the access to loans at concessionary rates to help participating store owners keep costs low, stay competitive and remain in the business.
To qualify for this programme, sundry shops have to apply and be approved by the Ministry of Trade, Cooperatives and Consumerism.
Successful candidates can apply for a loan between RM30,000 to RM60,000 at 3% interest from Bank Kerjasama Rakyat Malaysia through the Ministry.
"If I wanted to renovate my shop I may not be able to get a loan and if I do the interest rate will not be as low as this," said Shaari.
The 49-year-old said that he has learnt a lot about making his shop more competitive and to stay in the business.
A father of three, he hopes that one of his sons will take over the business one day.
Shaari, worked with Pernama for seven years before venturing into the retail business 14 years ago, when he started a little convenience store near his home in Seberang Jaya.
He opened his second store in Permatang Pasir seven years ago.
For the team at Giant, the makeover of mom-and-pop stores is a win-win programme for all.
"Tukar is more than a physical transformation, it also involves the transfer of knowledge that will help them stand on their feet after we leave," said GCH Retail (M) Sdn Bhd marketing director Ho Mun Hao.
"We share our expertise with them, give them advice on how to compete with their competitors, and counsel them on how to manage their stocks and supplies.
"We believe competition challenges all players big and small to better themselves and ultimately, benefit the consumers with better pricing and products," he added.
He said the physical makeover was fast – usually taking between one to two weeks to complete but the transformation process takes more time.
"They must first apply to indicate their interest to participate, and after their application is approved, we step in. We set up meetings with them, visit their stores and understand their problems. After we have evaluated their situation we come up with recommendations."
One of the core elements of the Tukar programme is computerisation which helps owners to be more efficient in managing their inventory and stock movement.
After completion, the store owners operate on their own but they can always call on Giant for post-transformation advice.
Ultimately, the goal is to modernise these convenience stores, help them operate profitability to enable them to play an effective complementary role to the larger retail players.
Ho said the stores "tukar-ed" by Giant have shown an increase of at least 40% in sales to date.
Rahmat, the owner of Kedai Runcit Faris in Sibu, felt he needed help badly as he felt he was losing out to his competitors and one of his main problem was difficulty in getting regular supplies.
"I might not have been able to keep my sundry store if I did not apply for the programme as business was also slow. The Tukar programme is very good especially in Sarawak where it can be quite difficult to get certain products and stocks due to the remote location," said the 41-year-old.
With Giant stepping in, Rahmat is now assured of supplies for his store.
"Since the transformation my sales have increased by 30% , I have no problems with my stock. Needless to say my customers are happy that the shop looks good, my goods are neatly and systematically placed,'' he said.
Moreover, Rahmat said his profit margin has also improved as well.
"From August, after the makeover, I see a constant increase in sales and if it stays that way, I will need to get more staff to help me out during peak hours," he said.
Rahmat said his peak time was between 7pm and 12am. Currently he has one permanent staff and three part-timers.
However, he said he had not mastered the bar coding system and it was challenging to use especially during peak time.
"If I am used to the machine I can serve my customers faster and my inventory will be more accurate.
The owners of Hing Guan Mini Market, Catherine and Michael Lim are over the top as the sales have soared 75% since their shop became brighter, cleaner and more systematic.
"We are very happy and so are our customers. They love our bright, modern and neat layout. Before the makeover, my mini market had very narrow aisles, it was dark and we could not display all our merchandise," said Catherine.
One of the main reasons they applied for the programme was because there are 52 mom- and-pop stores and 10 mini markets in the same neighbourhood in Penampang, Sabah.
"The competition is very tough here and I had read a lot about the programme. So we wanted to give it a try to improve our profit. Moreover, we were not satisfied with our sales and our situation.
"In addition, we were still young and we had nothing to lose," said the 38-year-old who started the mini market five years ago.
"My customers have told me that they like the way my mini market looks now and I too like the new look.
"Some have even said the feng shui is good as my sales have gone up. I think so too," joked Catherine, who prefers to use the bar code system as it makes inventory easier and making it a breeze to serve customers quickly.
For Mohd Shawal Omar, his Pasar Mini Ekshana is the talk of the town in Segamat. More importantly for him, sales have risen 30%. He strongly believes that it is due to the changes been made to his shop.
"My customers like my new layout as they can reach for what they want easily," said the 36-year-old shop owner.
Shawal started the Pasar Mini in 2009 because he wanted to develop his business.
"I wanted a change and to progress not only in terms of my business but also personally," he added.
He has no workers except for his wife and relatives. He has not fully utilised the POS System as he has not mastered it yet.
However, he intends to fully utilise it soon and is looking forward to even better sales after this.
IF you have a business-related event such as product launches, new appointments and store openings to highlight, e-mail us at metro@thestar.com.my
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