THE wage-subsidy programme under the Prihatin stimulus package has left out small businesses, such as mobile phone stalls, which are unsure if they will remain open for the next three months.

Malaysian Mobile Phone and Communications Operators’ Association president Ng Kent Soon told The Malaysian Insight that many mobile phone shop operators have decided not to apply for the wage subsidy because of the onerous conditions.

Under the economic stimulus package aimed at mitigating the impact of the Covid-19 pandemic on businesses and low- and middle-income earners, employers can apply between RM600 and RM1,200 to subsidise their wage bills, on condition that they not lay off any worker in the next three months.

Ng said small mobile phone shops, usually manned by just one or two employees, can’t guarantee such a condition. Most fear that they might not last for three months, even with the government’s financial assistance.

“There is no certainty the pandemic will be totally eradicated in the short term.

“The government also did not include mobile phone stores when it relaxed the movement-control order (MCO) for some services.

“Shops waited and waited to resume business but now it is still unclear when they can do so,” Ng said.

Overheads for mobile shops are not as high compared to other businesses but wages are low and in a store in the Klang Valley with five employees, a logistics staff and an inventory clerk, it costs around RM30,000 a month to stay in business.

Even if they accepted the wage subsidy, it will not solve problems with the landlord or shopping mall owners unwilling to waive rent or allow rental discounts, Ng said.

But if mobile phone shops close down for good, these landlords will also lose a source of long-term income, Ng said.

He estimates that at least 10% of the association’s members have indicated they will quit the business for good as they are unable to bear mounting losses from recurring daily expenses and paying salaries.

Under the Prihatin package, another facility extended to small businesses is the Bank Simpanan Nasional (BSN) Micro/i Kredit Prihatin collateral-free loans of up to RM75,000.

The financing is offered at 2% interest rate without collateral to all micro-entrepreneurs in various segments with the condition that they have been in business for at least six months. 

The financing period is between one and 5½ years.

Dumping stock online

Ng doesn’t expect business to return to normal when the MCO restrictions are eventually lifted.

The MCO, which is in its fourth phase, is expected to end on May 12. It was enforced to break the chain of Covid-19 infections. As at yesterday, Malaysia reported 5,820 cases with the death toll at 99. 

“There will be lingering fear of getting an infection. I expect most people would just be too afraid to go to the stores.”

To overcome this, association members have been urged to shift their business from physical retail to online platforms.

This will at least help them unload excess inventory accumulated because of the MCO.

If the MCO is lifted a month from now, many mobile phone accessories will remain unsold due to obsolescence, leading to owners selling them at low prices, he said.

“It is difficult to operate a mobile phone store. Operators must first pay a high amount to buy a mobile phone before selling it to consumers.

“Now the goods cannot be sold, the mobile phones cannot be sold and the goods cannot be left in the store, only locked in the safe,” Ng said.

A shop operator in Johor, Tan An Soon, said he has a month’s worth of unsold phone cases and various accessories.

He is also unfamiliar with trading on the internet and worries that he won’t be able to offload his stock.

“Normally, when the mobile phone accessories go past a certain period, we will sell them at discount. Now I have not done business for a month and the goods cannot be sold. I don’t know how to buy and sell online.”

Larry Bong, however, has been able to develop an online business during the MCO using social media to make sales and is even advertising “home visits” to repair mobile phones.

The Sarawakian told The Malaysian Insight that he has already repaired 200 to 300 mobile phones.

“I waive transportation fees for customers within 5km. Some customers mail their phones and I courier them back,” he said.

Bong also managed to offload some accessories through the Shopee online shopping platform and Facebook.

He, however, is forced to offer discounts as most customers will not buy phone cases or accessories at full price without viewing them.

Bong operates 12 stores in Sarawak, including in Kuching and Sri Aman, with about 80 employees.

He has promised his staff there will be no lay-offs but has asked everyone to take unpaid leave. – April 28, 2020.