Saturday May 14, 2011

IT is often said that small and medium-sized enterprises (SMEs) face a tough time marketing their products into hypermarkets. That begs the question how prepared are these small businesses when it comes to capturing market opportunities?

According to the Domestic Trade, Co-operative and Consumerism Minister Datuk Seri Ismail Sabri Yaakob, some Malaysian SMEs are still struggling to provide consistency in supply, high quality products as well as good packaging.

“These are important elements in any business operation. You (SMEs) will be replaced once you can't fulfil the requirements by hypermarkets as well as your clients,” he said at the launch of “Taste of Malaysia” programme in collaboration with Tesco Stores Malaysia in Beijing recently.

From left: Tesco government relations and legal affairs director Azlam Shah Alias, Datuk Seri Ismail Sabri Yaakob, Tjeerd Jegen and Tesco advisory board chairman Datuk Seri Mohamed Abid at the launch.

He says Malaysian manufacturers will have to aggressively seek new opportunities, diversify or move to new activities, expand their existing markets and employ better technologies to up the ante on efficiency and processing ability.

“To reap sustainable success, Malaysian manufacturers need to have the ability and the technical know-how that will enable them to strengthen their position in the domestic markets as well as to penetrate the global market,” he says.

Tesco Stores (M) Sdn Bhd chief executive officer Tjeerd Jegen says SMEs have to make consumers aware of their products through promotion and packaging as there are a lot of products in the hypermarkets. Merely listing their products is no longer adequate.

“We (Tesco) would like to give them (SMEs) more choices. They have to come with unique products in different categories which can make sales contribution. Many suppliers that supply SMEs products to hypermarkets are successful as they find unique, interesting and special products,” he says.

According to Ismail, the percentage of SME products in hypermarkets in Malaysia are still low at about 7% to 8% compared with the ministry's guideline of 30%. “We are working together with hypermarkets to help local SMEs list their products in order to reach our 30% target,” he says.

As it stands, there are varying views on SMEs products on whether these products employ their respective brand label or labelled under the hypermarkets' housebrand.

“We are reviewing the different thoughts and we will audit the actual SMEs products in the hypermarkets after we have come out with the standard,” he says.

Jegen says 80% of Tesco's housebrand products are from SME suppliers, adding that the company is also collaborating with Small and Medium Enterprises Corp Malaysia to train SMEs.

Ismail says SMEs need to capture the business opportunities in the regional markets and comply with different standards or requirements in these markets.

“For China, if you have a product that can penetrate the market, the huge supply will be waiting for you. However, you need to have consistent supply to capture the market effectively,” he says.

Meanwhile, Malaysian ambassador to China Datuk Iskandar Sarudinencouraged Malaysian companies to grab the opportunities to market their products in China, adding that they should also venture into second and third tier cities.

Under the “Taste of Malaysia” programme, 59 new Malaysian products have been merchandised in Tesco Happy Valley in Beijing while 32 were already available at Tesco outlets in China.