PART 2 : WHEN CIVIL SERVANTS WHO CLAIM TO KNOW BUSINESS ACTUALLY DONT

My recent post about Giant Hypermart closing FIVE of their outlets  has gone viral and other people have been discussing the matter. This is good because this is what we need in a modern and rational society - open and free discussion of issues and ideas. That is how we progress.

Among the groups who have discussed that post of mine was a group of ex Civil Servants.  Since this is a very connected world, some of the discussion in their WhatsApp group has been forwarded to me.  I will not reveal names but  here is a comment by one very senior ex Civil Servant :

Syed Akbar Ali  uses the closure of the Giant supermarket branches as proof the  Malaysian economy  is falling down  He shd read abt disruptive technology forcing several companies to close down redundant operations to make way for digital systems.  Several banks in M incl Stan Chart  hv  closed down their  branches bcos in today's banking , you can do banking without going to the branch.  Thats disruptive technology. It has  its good and bad points but whatever,  Malaysia must adapt to the new realities to stay relevant.   S.

My comments : 

Disruptive technology.  One definition (there are many) of "disruptive technology" says that :   "disruptive technology is one that displaces an established technology and shakes up the industry or a ground-breaking product that creates a completely new industry." 

First lets just analyse the short comment by the ex Civil Servant above.  

• Giant did not close down because they do not know what is a digital system.  
• Giant is a multi billion Ringgit retail business. 
• To think that they are not aware of 'disruptive technologies' like online retail sales, online payments, online ordering etc is being simple.

Giant closed down because the Malaysian consumer (particularly the Malays) have lost their purchasing power largely because of the GST.  

Post GST,  the economy is just going down.

The comment about Stanchart closing branches exposes a lack of understanding of business and also about "disruptive technology" itself. 

Stanchart may have closed down its "human operated" branches TO BE REPLACED by machine operated banking (electronic ATMs, cash deposit machiness, cheque deposit machines etc).

• But Stanchart DID NOT LOSE THE BUSINESS at those branches.  
• Those branches did not go bust.
• It is more likely that Stanchart's banking business INCREASED at their new all-machine branches. 

In very big contrast Giant shut down FIVE Hypermarts.  

The two are just not the same.

Not just Stanchart but any bank (Affin, CIMB, Maybank) have invested substantial amounts in automated machines.     People can deposit cash and cheques even at midnight.  

So this "disruptive technology" has NOT DECREASED Stanchart's  or any other banks' banking business. It has in fact INCREASED their banking business.

Therefore to compare Stanchart's automated bank machines with Giant closing FIVE hypermarts is just apples and oranges.  It is a lack of understanding of many things - not just business.

Just like Giant closing FIVE outlets, many petrol pumps are also shutting down, especially in the rural areas. Why? Because there is less business. Evidence : In Balik Pulau, Penang private entrepreneurs and sundry shops are selling petrol in PET bottles because the local petrol pumps have shut down. Not enough business at the petrol stations. 

I  also shared the ex Civil Servant's comment above with a friend who is in the supermarket business. He gave me a short reply as follows:

"The current closing down of Giant and Aeon Big has nothing to do with disruptive technology as total online sales in Malaysia is hardly 5%.

And online sales of groceries / toiletries / fresh and sundries (which is 80% of a hypermarket business)  is hardly 0.5 %  in Malaysia 

Also note the closing of the Giant branches are not in key urban areas like Klang Valley.

This actually shows rural purchasing power is gone down drastically 
Business is down by 4.8% in hypermarkets which caters to middle and low income population,  simply because purchasing power for basics necessities  is down."

My comments :  Indeed post GST, the purchasing power has gone down drastically all over the country. The rural areas and Malay urban areas have been hit the hardest. Hence Giant is closing outlets  in Sibu and in Shah Alam City Centre (urban Malay).

It has nothing to do with 'disruptive technology'.

I thought it is important to comment on this because the Civil Servants and those in the GLCs are still blinded by non scientific and  non rational methods of thinking.

They want to support the gomen at all costs. They are refusing to admit that the economy is slowing down. I say it is crashing. Particularly the Malay / bumiptra economy. 

This is the same type of  irrational attitude that says 'lets support Muslims all over the world - no matter what they have done'.    Hence the blind  support for terror mongers like Zakir Naik, Yusuf Qardawi  and blind support for any Sunni faction involved in any wars  anywhere in the world.

To progress we must use reason and common sense.  Emotions and sentiment usually makes us poorer.