KUALA LUMPUR, Sept 28 — MARA chairman Datuk Awang Adek has defended the agency’s decision to hire a sole distributor for its Bumiputera-only digital mall, which is reportedly losing money.

The newly-appointed chairman of the Bumiputera Development Agency said individual vendors did not have enough demand to order stocks in large bulk, which is needed to secure products at cheaper prices.

"To create volume for the single supplier to source from outside so that the prices of items become cheaper which benefits are passed down to individual shops,” Awang explained when contacted by Malay Mail Online.

"The single supplier becomes aggregator to get cheaper supplies.

"If individual shops were to order direct from suppliers outside, the volume is not there and prices can’t be lowered,” he added.

Last week business paper The Malaysian Reserve reported that traffic and business were slumping at the two-year old MARA Digital Mall.

Vendors reportedly said higher prices was a huge factor driving customers away, which they blamed on the supply monopoly.

The report said that prices of products there were at least 15 to 20 per cent higher than those sold at Low Yat Plaza, the Bumiputera mall’s more popular competitor.

When asked to explain the price disparity, Awang said he would get the supplier to clarify soon.

"From what they told me prices are very competitive already compared to other places. I will check further on this,” he said.

Traders are currently required to source all their stocks from WGN Scan Sdn Bhd and any purchases made from another dealer must be declared with a 1.5 per cent charge per item, The Malaysian Reserve reported.

Traders who fail to do so are required to pay a RM500 summons, the paper added.

However, the same report also quoted a WGN Scan staff as saying that the total sales at the mall would amount up to between RM200,000 and RM400,000 weekly despite complaints of slower business.

WGN Scan could not be reached for comment.