IDEAS: Open up Mara Digital Mall to non-Bumis

Economist from think tank says such a move is good as it will 'push' Bumiputera entrepreneurs to step out of their comfort zone.

PETALING JAYA: A think tank has suggested that Mara Digital Mall be opened to non-Bumiputera traders to “push” the Bumiputeras to become better entrepreneurs, in the wake of a report that business there is declining.

Economist Adli Amirullah, from the Institute for Democracy and Economic Affairs (IDEAS), said the arrival of non-Bumiputera traders at Mara Digital Mall would create healthy competition and encourage the Bumiputeras to step out of their comfort zone.

“This will increase their productivity and improve their quality in terms of doing business, and this will benefit the Bumiputeras in the long run.”

Mara Digital Mall, also known as “Low Yat 2”, was launched on Dec 8, 2015, following a much-publicised dispute at Low Yat Plaza in July that year when a Malay youth stole a RM800 smartphone from one of the shops there.

The dispute was played up by some quarters as being racial in nature, leading to calls for a separate mall that allowed the public, especially the Malays, to buy from Bumiputera traders instead of the Chinese-owned businesses at Low Yat Plaza.

Consequently, Mara Digital Mall caters specifically to Bumiputera entrepreneurs, and is aimed at assisting them in breaking through the information communications technology (ICT) retail market.

But Adli said it must be noted that not all non-Bumiputeras benefited from Low Yat Plaza, as some didn’t even have the opportunity to start a business there because it was so competitive.

“That is why the government should gradually open up Mara Digital Mall to non-Bumiputeras. Giving fair opportunity to all Malaysians is more important than only giving certain races the opportunity,” he said.

Absurd to have only one supplier

Adli also criticised the policy that all Bumiputera traders at Mara Digital Mall had to get their inventory from a single supplier.

“That’s an absurd way for them to do business. It’s basic economics. Limited supply will push prices up.

“If the traders there don’t have the freedom to choose their own suppliers, there won’t be much room to maximise profits.

“When you have one supplier, traders have no choice but to sell their goods above competitive prices to cover their profit margin.”

He added that the government’s solution had created new problems, as promoting entrepreneurship is not achieved by intervening in the market.

“Having only one supplier, the traders at Mara Digital Mall will lose out to other traders outside the mall who are free to choose different suppliers and can play around with profit margins.

“The government may decide what it thinks is best for the market, but the market can do this more efficiently and with less intervention,” Adli said.

According to Adli, the end result is that Bumiputera entrepreneurs will be discouraged from investing in the ICT sector, which is counter to what the government wanted in the first place.

If the government truly wants Mara Digital Mall to be saved, he said, it should stop interfering in its operations.

“Market competition needs to be healthy in order for it to work properly. The government can only come in when there is a market failure, but they should not dictate what is good and what is bad for the market,” Adli said.

In an article by The Malaysian Reserve yesterday, it was reported that Mara Digital Mall is struggling with a decline in sales and number of patrons.

Traders whom the financial publication spoke to said this was due to a lack of product variety, non-competitive prices and little publicity.

Adli said the only way forward was for there to be healthy competition by allowing non-Bumiputera retailers to operate at the mall. Traders should also be allowed to get their inventory from a multitude of suppliers, he added.

“Healthy competition will lead to competitive prices. The consumer will enjoy lower prices and a wider range of choices while traders can maximise their profits.” -FMT