Govt. to review laws
Concerns from some members of the business community about the influx of Asian-owned companies taking over the retail sector are not lost on the government.
So assured the Minister responsible for the Ministry of Commerce, Industry and Labour, Lautafi Fio Purcell.
Speaking during an interview with the Sunday Samoan, Lautafi said it is “quite obvious” that locals are disadvantaged going against foreign companies with bigger financial backing.
“I feel for those (local business) people because it’s quite obvious,” Lautafi said.
“It doesn’t take long for a Chinese shop to come in then (local) business goes out.
“I’ll be meeting with the Commerce sector to ensure there is a level playing field for our people. The Chinese or Asians come with the philosophy to sell at the lowest price and sell a lot of them so they make up for that profit margin.
“I’m seriously looking into the issue. The government wants to attract foreign investors to provide services and employment but at the same time we don’t want to develop an environment where local business or entrepreneurs just cannot compete.”
And the Minister said was honest enough to say he does not have the answers right now.
“This is something I’m hoping to discuss with our M.C.I.L. team during our inspection in Savai’i this week,” he said.
“This is what I mean there is always a catch somewhere and it’s never a clear cut win – win all the time. But we try to minimize that negative (effect) on our people.” From observation, Lautafi described Asian retailers as “ruthless in business.
“They are aggressive. They sell quite a lot and that is their philosophy. It always about looking for the next customer to come in and they work for 24 hours.”
The Minister said local businesses don’t operate on that model. They have set times and the latest they will open is 8pm.
“But there is got to be a balancing act somewhere,” he said.
“I was reading the paper (Samoa Observer) and was just thinking of our meeting with the Price Control division. I’m going to throw them a challenge to come up with a suggestion on ways that we can continue to promote people from investing but not at the expense of our people who also want to run their businesses.”
Lautafi also believes that the locals can never compete with the foreign businesses because of financial backings.
“One thing I’m very sure about is the finance backing of our people is not much,” he said.
“But I don’t know about the Asians whether there are bigger companies behind them and that is why I have asked the Ministry to ensure they scrutinize the permits and stick to what’s in it.”
With such financial backing, Lautafi said the locals could never compete.
“Our people can’t compete with those bigger shops,” he explained.
“An example is a shop in Savai’i that used to be run by a Samoan. It’s never packed, there’s hardly any customer. The next time I went to Salelologa I saw that a lot of people going in and out of that shop and inside was a totally different person running it.” According to Lautafi it was an Asian that was then running the shop and they were enthusiastic to sell things.
“They are in your face suggesting things you should buy,” he said. “They are business orientated people. They make sure you will not go out of the shop without buying something and its part of their business ethics that draws people to their shops.
“That is the philosophy that has not clicked on our people. As opposed to our shops you go inside and they look at you as if they don’t want you there.
So what is your advice to local business people? “This is the modern world. We have moved to trade services,” said Lautafi. “We need to look at ways we can improve our service, presentation and make people feel welcome to the shops.
“Service can turn one person from another shop seeing that you are happy. The other thing is profit. Chinese go for the marginal profit but if you sell thousands of those goods, your profit becomes very big but our people want to sell one thing and get that much profit from it.”
Lautafi added that the Asians are gifted business people and they have been doing this for thousands of years.
“But our people are still learning to grow,” he said.
“It doesn’t mean that our people should be disadvantaged because personally I still want to see more of our businesses up there.”