The Malaysian Insight

THE Covid-19 pandemic has brought new competitors to the traditional vegetable and fruit wholesalers who are used to selling their products in markets.

The new breed of wholesalers are now doing their business online, giving options to consumers when the supply was low due to the movement-control order, but had driven prices up.

The traditional wholesalers told The Malaysian Insight that this has left them fighting a price war and for supply of fresh vegetables and fruits.

They added that when prices were pushed up, some vegetables from Cameron Highlands became hard to source.

Kuala Lumpur Vegetables Wholesalers Association chairman Wong Keng Fatt said the change in the situation started during the first phase of the MCO in March last year.

This was when many people were unemployed, and had led to a boom in online sales, bringing along many competitors.

He said people did not know how to deal with the MCO as markets and night markets were closed, and had affected the sales of vegetables.

It was then that those who were unemployed decided to enter the vegetable sales market and acted as intermediaries.

He said these intermediaries would take orders from customers and then deliver the goods to their doorstep. This way, they were stealing business away from wholesalers.

“For online operators, not many do retail, but more wholesale,” Wong said.

“Customers were forced to look for their supplies elsewhere because markets were closed allowing these online businesses to thrive.

He added that the main business days of the online competitors were mostly weekends and Mondays.

“They will pick the best selling days to buy, that is, Friday and Saturday and because supply is limited, they can charge high prices.”

He said their online competitors pay a higher price to “grab the vegetables”.

“If there is not enough (vegetables), we will not get the goods, and the vegetable supply will not reach Kuala Lumpur.”

In the past, he said, “all products will be quickly sold out” at the Kuala Lumpur wholesale market even if the prices are high.

“Now when we go to buy, they are no longer available, because there is not enough (supply). Sometimes middlemen buying for online competitors are involved in taking up all the supply, and they will set the price very high.”

However, Wong added, on days when consumers’ shopping frequency is low, such as Tuesday to Thursday, the middlemen are unwilling to pick up the goods from the suppliers.

Instead, the vegetables are piled up in the Kuala Lumpur wholesale market.

“The whole market system has changed. The MCO has affected us. The vegetables that couldn’t be sold at that time were thrown away, so we asked suppliers from Cameron Highlands to deliver in smaller amounts.

“But this also caused them problems as when they cannot sell the vegetables that they harvested, they too had to get rid of them.”

Falling prices

Wong said that the traditional wholesaler had no choice but to deal with the new competition from online sellers.

He said they had to continue relying on the orders of regular customers to support them.

At present, he said all they can do is maintain a low price to keep their customers happy.

He also said that prices of some vegetables have fallen sharply due to oversupply.

He said tomatoes from Cameron Highlands had dropped from RM10 per kg to RM1 per kg now.

“Tomatoes used to be RM10 per kg. In the past two weeks, it has dropped to 60 sen per kg. It has only recently gone up to RM1 per kg.”

Michael Tan, a vegetable wholesaler who has been in business for more than 20 years, told The Malaysian Insight that the market has lost many customers since the start of the MCO last year.

“After the restriction order, many customers don’t come here anymore.”

“Cameron’s vegetables are rarely here. Although they still come, it doesn’t matter if they come less, because the prices are very high.

“If they can’t sell outside, they will still push it here. If they can’t sell it, they can only throw it away.”

He added that Cameron Highlands’ distributors had opened markets outside the traditional wholesale markets during the MCO.

Tan said when the price of some vegetables is low, there will be a lot of supply in the wholesale market. However, if they cannot sell, they can only donate the remaining vegetables.

“If the price is good, there will be no supply, and they will give it all outside.

“They were all sent here before, and customers would come here too, but this is no longer the case.”

Too many distributors

Currently, the suppliers themselves deliver the vegetables to the customers, and foreign workers are setting up shop outside the wholesale market, making the wholesale market business more difficult.

“Foreign workers don’t buy from us anymore as the lorries will deliver the goods directly to them.”

Tan said when the prices of spring onions and Japanese cucumbers dropped sharply, there were hundreds of boxes of goods in the public market, and two or three tons of goods were donated.

He said that in the past, vegetable prices were relatively stable. Even if the prices were a little high, customers were still willing to buy them.

However, the sudden ups and downs in vegetable prices have discouraged many customers.

“In the past, even if the price was more expensive, but it was still stable, customers would still buy. Even if it was RM10 to RM12 they would still buy, but suddenly it goes up to RM20, and the whole buying activity stops.

Tan believes the sudden change in prices is due to the fact there are many vegetable distributors and they determine the prices.

He said vegetable distributors all want a single price, but they do not take into account the different conditions of each market.

“Now it is very difficult for us to earn RM1,000 a day.” – April 15, 2021.