Aemillyawaty Abas et al., The Challenges Faced By Traditional Food Entrepreneurs In Business Sustainability (2023)

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A journal article by Aemillyawaty Abas, Soo Yew Phong and colleagues at the University of Technology MARA, Melaka Branch, The Challenges Faced By Traditional Food Entrepreneurs In Business Sustainability, published 05 December 2023 in the International Journal of Academic Research in Business and Social Sciences, Vol 13, Issue 11. The study draws on a sample of 10 small rural entrepreneurs producing traditional food products around Bukit Senggeh, Selandar, in Melaka, Malaysia. It reports that their main problems were a lack of awareness of registering with The Companies Commission of Malaysia (SSM) and The Inland Revenue Board (LHDN), reliance on direct-selling rather than social media, and disorganised financial management. It suggests future studies develop models for business stability.

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Vol 13, Issue 11, (2023) E-ISSN: 2222-6990

The Challenges Faced By Traditional Food
Entrepreneurs In Business Sustainability
Aemillyawaty Abas1, Soo Yew Phong2 , Suhailah Kassim3,
Amirah Hazimah Borhanordin4, Ijlal Saja5, Nur Aqilah Norwahi6,
Nur Hayati Abd Rahman7
Faculty of Business and Management, University of Technology MARA, Melaka Branch,
Bandaraya Campus1,3,4,7, Academy of Language Studies, University of Technology MARA,
Melaka Branch, Jasin Campus2,6, Academy of Language Studies, University of Technology
MARA, Melaka Branch, Alor Gajah Campus5
Corresponding Author Email: sooyewphong@uitm.edu.my

To Link this Article: http://dx.doi.org/10.6007/IJARBSS/v13-i11/19765 DOI:10.6007/IJARBSS/v13-i11/19765
Published Date: 05 December 2023

Abstract
Malaysia is currently facing high living cost issue since COVID-19 pandemic in 2020. Many
entrepreneurs are poorly affected as they depend on irregular income, especially the small
entrepreneurs that reside out of the city area. Therefore, this study explores the issues and
challenges faced by the traditional food product operators for their business stability. This
study was conducted around Bukit Senggeh, Selandar, a rural area in Melaka, Malaysia. A total
of 10 entrepreneurs were selected as the study sample. They consisted of small rural
entrepreneurs who produced and cultivated traditional food products. Traditional food
products were often seen to have a great potential in attracting tourists to experience local
food. Therefore, this study is a preliminary study to assist the Malaysian Government’s notion
in restoring the economy post-pandemic. The results of the study showed that the problem
faced by entrepreneurs was mainly the lack of awareness to register business companies with
The Companies Commission of Malaysia (SSM) and The Inland Revenue Board (LHDN). In
addition, there was also a lack of resources to assist the development of the small business
where traditional methods such as direct-selling was still used as well as not utilising social
media platforms to market or sell the products. In fact, financial management was also
reported to be disorganised and non-systematic. Based on the findings, future studies can
look into developing models for business stability for both short- and long-term plans. In
conclusion, traditional food businesses had a huge impact in improving the economic state of
rural communities as it could also commercialise the products internationally through the
tourism industry.
Keywords: Challenges, Traditional Food, Entrepreneurs, Business Sustainability

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Introduction
Melaka, a small state in the southern region of Malaysia, is one of the states that has become
a famous tourist attraction due to the number of interesting places it has. A total of 79.3%
tourists visited Melaka because it is a heritage city and a historical site (Er Ah Cho, 2013). In
addition, Melaka is also well-known for its traditional food. Traditional food is the food and
drinks that are regularly eaten by a community with certain tastes. Besides being nourishing,
nutrient-dense and having fibres, traditional food is also cheap and obtainable (Shuhairi,
2019). Some examples of traditional foods are Nasi Lemak, Roti Canai and a variety of kuih,
or delicacies.
The business of traditional food in Melaka is also closely related to the history of foreigners
coming to Melaka. Since the 15th century, the influence of culture and customs from Arab,
Chinese and Indian traders directly spread widely when they did their trading activities. The
glory of Melaka is undeniable due to this trading factor and the great impact it has contributed
to the sustainable economic growth. This practice happened for centuries until traded goods
were able to be exported and imported abroad such as to China, Saudi Arabia, Iran and India
(Syaffiq, 2016). Some examples of the traded goods were spices, pepper, cloves and corn.
Meanwhile, the area that widely produces traditional foods is in Selandar, Jasin. The
settlements of the residents are located in Kampung Hilir, Kampung Cembung, Kampung
Rencang, Kampung Ayer Keroh and Kampung Lanjut. Selandar was originally a control point
for warships during the Malay Sultanate of Malacca (Peei, 2022). Hence, this place is so
popular for its traditional food and it becomes one of the main attractions among tourists
when they visit Melaka (Rahmat & Mat Isa, 2019). Besides, in the same locality, tourists can
also enjoy nature by trying out hill climbing activities at Bukit Batu Lebah (Peei, 2022).
No doubt that small and medium enterprises (SMEs) play a significant role to drive the
economy. However, unexpected circumstances like COVID-19 pandemic gave greater
challenges for the SMEs to sustain their businesses. Entrepreneurs need to be mentally and
physically prepared (Popkova et al., 2022), especially in innovating and enhancing existing
strategies to adapt with market changes (Arif, 2009). For instance, a large numbers of SMEs
faced losses during COVID-19 pandemic and it adversely affected their source of income
(Gaban, 2022; Popkova et al., 2022; Ariffin, 2022). Without strong mental, physical and
financial preparation, many of the SMEs had to shut down their business operations (Emami
et al., 2022). Even though there were authorities who offered help, this issue could not be
overcome in the long term because there was this perception and stigma that entrepreneurs
want to do business only on a small scale and as a hobby (Sakdiah, 2022; Abu, 2022).
Unexpected circumstances that happened around the world recently should open up
opportunities for respective authorities and entrepreneurs to re-evaluate their business
sustainability in the long run. This is to ensure that their SMEs are still able to standstill even
though economic turmoil happens and affects economic and businesses worldwide. With
that, this research is specifically designed to investigate the issues and challenges faced by
SMEs in Bukit Senggeh, Selandar, Melaka that are particularly involved in businesses selling
traditional foods.
The significance of this research is as follows. Firstly, this study is important in supporting the
government’s notion to help dealing with the current economic challenges faced by
entrepreneurs in rural areas. Among the assistance provided included the capital in the form
of equipment or monetary. Another approach was by increasing foreign tourists visiting
Melaka by making traditional foods the attraction. Therefore, the stability for traditional food
businesses needs to be strengthened although it may cause less physical aid resources such

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as the equipment and monetary assistance. Other than that, these entrepreneurs also need
to generate and strive independently to develop their business in the long term without
expecting much of government assistance. It is worth noting that when businesses in rural
areas expand, the job opportunities for the residents are also expanding which will resolve
unemployment issues and eventually reduce the number of young people that leave their
small hometowns to search for jobs in the city. Hence, this paper is unique in the sense that
it explores the issues and challenges faced by SMEs that sell traditional foods in Melaka,
Malaysia. To our knowledge, no research has been made to address this issue, specifically
when dealing with SMEs in the rural area of Selandar, Melaka.

Literature Review
A pandemic is not a new phenomenon in society as it has happened multiple times according
to history. Unfortunately, COVID-19 happened where many of us were experiencing a
pandemic for the first time. Based on a study conducted, it was revealed that 82% of the small
businesses had faced the negative impacts of the pandemic. A hefty 70% needed a minimum
of twelve months to start their recovery process (Pathak, 2021).

SME
Entrepreneurship refers to a practice of venturing into a business when an opportunity is
given. 90% of the agricultural establishment in Malaysia belong to micro, small and medium
entrepreneurs (MSMEs) (Mafi, 2020). SMEs in Malaysia account for a large proportion of the
total number of businesses in many sectors, and contribute a considerable share in terms of
Gross Domestic Product (GDP). As in many other countries, SMEs in Malaysia are also involved
in various industries. In determining the importance of SMEs in the country, especially in
terms of their economic contribution, it is important to classify or categorise them.
SME Corp has defined SME in two categories which are the sales and number of full time
employees. For the manufacturing sector, SMEs are defined as firms with sales turnover not
exceeding RM50 million or number of full time employees not exceeding 200. For the services
and other sectors, SMEs are defined as firms with sales turnover not exceeding RM20 million
or number of full time employees not exceeding 75. According to the latest statistics in the
Malaysia Statistical Business Register (MSBR), Department of Statistics (DOSM), Malaysia,
estimates that there were 1,151,3389 or 97% SMEs in Malaysia in 2022. In Melaka, directory
data as in December 2022 from IKS.my showed there were 1005 establishments of SME. A
total of 79.2% of SME in Melaka are from food and beverage industry. It shows that this
industry has gained a strong market share in the local community. SMEs have become
increasingly aware of opportunities in the convenience and ‘halal’ food market and strong
growth in the sector reflects this trend.
Based on the field research, which aimed to identify the issues for small rural entrepreneurs,
it was found that there was a lack of awareness in registering business companies with
Suruhanjaya Syarikat Malaysia or The Companies Commission of Malaysia (SSM) and Lembaga
Hasil Dalam Negeri or The Inland Revenue Board (LHDN). In addition, the entrepreneurs also
faced short-staffed issues that supposedly assisted business expansion. It was also reported
that the traditional method of direct selling was still widely used and social media platforms
were hardly utilised to market their products (Gaban, 2022; Ariffin, 2022; Sakdiah, 2022; Abu,
2022). Thus, these issues need to be addressed based on the Sustainable Development Goals
(SDG).

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SDG 8 Good Job & Economy Growth
Sustainable Development Goals or SDG 8 recognises the importance of sustainable economic
growth and high levels of economic productivity for the creation of well-paid quality jobs, as
well as resource efficiency in consumption and production, according to the United Nation
(UN). One of the targets in SDG 8 which is 8.9 is where the objective is to devise and
implement policies to promote sustainable tourism that creates jobs as well as to promote
local culture and products. The area of interest that this research has focused complement
SDG 8.9 where Felda Bukit Senggeh is a rural community and it promotes local cultures,
delicacies and products. According to the UN Report on SDG Good Practices Publication 2020,
Yemen has developed a project to enhance rural resilience. The objectives of this project
included provision of emergency employment opportunities, capacity building for
employability skill set and the support in the establishment of solar micro-businesses.

SDG 11 Sustainability City Growth
Achieving goals in poverty eradication, equality, climate change reduction and living healthily
is crucial for city folks. One of the objectives is also to determine inclusive economic growth
or yield to greater equality. According to the UN, most people will seek opportunities for
higher education and employment in the cities that steadily increase the usage of world
resources for a more sustainable path. The ultimate aim for the sustainable development goal
(SDG) is to make cities and human settlements inclusive, safe, resilient and sustainable. There
are many challenges in achieving SDG 11. For instance, cities need to have implementation
plans and support in order to achieve the objectives. Innovative solutions from the
community are much needed to help people-centred cities where citizens are involved in
influencing how they live and interact with their community. An example from the UN report
in 2014, HealthBridge’s partner in Hoi An, Viet Nam has developed a community engagement
process to design and build parks and playgrounds, which resulted in both community fund-
raising events and participation in building new playgrounds for children in the
neighbourhood.

Marketing Network
Dzuljastri Abdul Razak, Moha Asri Abdullah and Arif Ersoy (2018 ) have reported that SMEs in
Malaysia lack information about the marketing channels and fail to develop marketing
networks. They also identified the main challenges faced by Malaysian SMEs in penetrating
the external market which included the lack of knowledge about marketing techniques,
exporting, branding, customer loyalty and also poor networking system with the local and
international enterprises. The researchers also reported that the losses of SMEs were also
due to poor design, poor quality of finished products due to the use of raw materials of poor
quality as well as lack of quality control, skills in labour and after-sales service. In addition, the
difficulties of seeking an export market were also due to a number of external factors such as
exporting countries, raw price increases.

Methodology
This qualitative study was conducted to investigate in a more in depth manner on the
phenomenon that has occurred. Salim (2018) explained that qualitative research enables an
exploration of an issue. Purposive sampling was chosen in this study because it could provide
the answers to the research questions. In addition, purposive sampling was chosen because
the criteria needed to fulfil the research has been set. Salim (2018) also highlighted that this

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sampling method requires no specific number of respondents to determine the minimum
level required as long as the saturation level of the data obtained is prioritised. Thus, for this
research, a total of 10 traditional food entrepreneurs were identified to assist the study by
providing the requested data. Traditional food enterprises around Kampung Bukit Senggeh
area were selected as it was home to many business owners and workers which several issues
had been identified compared to other areas. In short, the selected interviewees were
determined according to the criteria of the challenges faced in their business. Next, an
interview protocol was constructed to collect data individually. This method was done to
ensure each informant felt comfortable with the researcher and was ready to be involved in
this study. In addition, it also made it easier for the researchers to obtain the data as they
were able to focus on the research objectives and questions. At the same time, they were
also able to work with time efficiently. The protocol began with the introduction of the study,
obtaining consent to collect and record data and distributing five unstructured questions to
the interviewees before finalising the session. The data collected was then analysed
descriptively and presented thematically in tables.

Result And Discussion
Demografi
The selected entrepreneurs or interviewees were of age between 35 and 50 years old. Most
of them were small traders who produced food products such as dodol (sweet and chewy
candy made of glutinous rice flour, sugar and coconut milk), honey, baked delicacies, quail
breeding and smoked meat. Most of the products were manufactured at home since the
entrepreneurs focused on marketing their products at a small scale even though some of
them have managed to export their goods abroad.

Issue and Challenges
This section discussed the qualitative findings focused on issues and challenges for the
traditional food industry in Bukit Senggeh, Selandar, Melaka. In order to understand the issues
and challenges faced in the traditional food industry, interview sessions were conducted to
explore the current major challenges, which included post Covid-19 related marketing
practices and brand management challenges. Lack and limited knowledge and skill in brand
management and social media strategies were mentioned most, while challenges in the raw
material supply chain were reported as the least challenging.
The major specific challenges identified were on fast-paced marketing digital technology and
drastic customer preferences change related to customer engagement in promotional
activities, which highlighted the businesses’ weaknesses and limitations in these areas. The
results are summarised in Table 1.
1. Limited skill and knowledge in brand management and strategies to which some
duplicate other SMEs strategies without considering type of product or own resources
during execution.
2. Poor packaging selections and strategies.
3. Disengage with customer preferences with no or minimal brand audit.
4. Covid-19 forced entrepreneurs to implement social media platforms, specifically
Facebook. This requirement was implemented without proper guidance which resulted
in a waste in resources and time as it failed to create high traffic for customer
engagement. The finding showed only 3 out of 10 interviewees have active social media

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platforms that were related to the promotional strategies while more than 50% were
still practising traditional offline marketing strategies.
5. Those interviewees reported to have active social media platforms which reply on
Facebook, admitted their social media contents were minimal and focused on
promoting the new batch products produced for delivery. These findings indicated that
interviewees’ inability to create high traffic or high customer engagement due to no or
minimal contents were created that aimed to trigger sales.

Table 1.
Challenges of traditional food small scale producers related to brand management and social
media strategies.
Challenges Explanation

Brand name and brand Finding showed all interviewees adopted obsolete
elements brand logos with poor brand design. This was expected
due conventional practices among Malay entrepreneurs
who had been involved in businesses for more than 3
decades. It is commonly found that they named their
products using their own name with the faces as brand
logos. It was an ineffective strategy as compared to
when it was 30 years ago. All interviewees agreed that
their brand names need to be updated and refreshed.
However, lack of confidence and skill forced them to
remain using the same outdated brand strategies.
The interviewees had been in the traditional food
industry for more than 3 decades, yet they failed to
strategize the niche product feature as their brand
leverage and association. For products with high market
entry and high point-of-parity (POD) like the food
industry, it is significant to leverage product features
and/or ingredients as point-of-difference (POD) to
create high distinction for its target segments. Finding
from Hien, Phuong, Tran and Thang (202) a well-
developed brand associations and linkage contributes to
favourable brand image which include product quality,
logos and brand purchase experiences. Similar findings
from Purwanto, Haque, Sunarsi and Asbari (2021)
indicated that high brand image by consumers have a
strong impact on purchase intention for the food
industry as it increases customer’s perception of food
quality.

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Challenges Explanation

Brand evaluation and None of the interviewees had conducted any brand
monitoring evaluation and monitoring as it is unknown to them it is
important. Brand audit and tracking is crucial as it
provides insights of how consumers perceive one’s
brand name and equity. Keller (2020) suggested
effective consumer-based brand audit assist for future
strategic brand management direction by evaluating
brand equity satisfactory, which brand association
should be strengthened and which brand opportunity
can be utilized. As proposed by Brandão, Sousa and
Rodrigues (2020) framework of brand audit should be
designed by taking consideration of different cultural
settings as it can result in increasing brand performance,
such as type of product or services in different industry
and country development settings. Consumer
perceived-brand evaluation is crucial as it provides
direction for brand portfolio development and overall
brand image will remain for long run in consumer’s mind
(Koschmann, 2019).

Social media and digital As mentioned above, implementation of social media
promotional platforms strategies among interviewees were concerning. Without
engaging in digital marketing tools and platforms, SMEs
will experience loss in sales and market share. For the past
5 years, social media has replaced the traditional
promotional tools for both individual and business target
segments. Creating social media with high engagement
with customers allows for high product acceptance and
satisfaction during the purchase experience. This
relationship can significantly increase consumers’’ trust
and loyalty level on the brand (and affect positively on
purchase intention and brand performance (Kırcova,
Yaman and Köse, 2021). The importance of social media
interaction also was found by a study from Moslehpour,
Dadvari,Nugroho and Do (2020) where it suggested that
marketers should acknowledge the need for more social
media role of interaction in their marketing strategies to
strengthen customer purchase experience and brand
preferences. As for culture-based industry, Bae et al.,
(2020) suggested marketers should creatively design
contents that produced enjoyable experiences by
including cultural and artistic features to produce high
engagement with customers.

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Conclusion
In conclusion, based on the findings of the research, the main challenge for traditional food
entrepreneurs is to ensure that product marketing sales are always marketable and
profitable. Thus, suggestion to overcome this is by referring to SWOT analysis, which is
planning the marketing strategies through e-commerce. Other than that, choosing neat, user-
friendly, fast, pretty and durable packaging may also help. Promoting customers with an
interesting package could also effectively improve sales. In relation to that, the effect can be
seen in the positive attitude of the entrepreneurs to continue doing business in a more
orderly and systematic way to market traditional food products even abroad. The
entrepreneurs’ optimism has made their efforts continuously implemented to generate
income. Hence, the impact can improve and stabilise the economy of Malaysia.
Recommendations for future research include building a model as a guideline for
entrepreneurs to market traditional food towards a more systematic, developed and
competitive planning up to international level. In short, the programme to impart knowledge
of post-COVID-19 can overcome the entrepreneurial challenges and maximise the potential
ability of entrepreneurs to continue to excel.
This study is unique in the sense that the scope of study is specific to the traditional food
entrepreneurs in Bukit Senggeh, Melaka. Even though it is assumed that all entrepreneurs
shall register their businesses with SSM, there were still cases whereby the entrepreneurs opt
not to register due to their perception of not getting any subsidies from the government once
they registered. Besides, as the world in 2023 is shifting towards digital era, there are still
cases whereby the rural entrepreneurs have lack of knowledge on how to penetrate their
products outside their rural areas via various online platforms. Thus, these findings give
alarming notice to the respective government authorities to enhance business education
among rural entrepreneurs. With continuous education and awareness, they might be able
to sustain their business in the long-run and compete in the local and global markets.

Acknowledgement
Thank you to the residents and entrepreneurs of Bukit Senggeh, Nyalas and the areas of
Selandar for cooperating and getting involved in this research. This project is funded under
the Teja Grant (GDT2023/1-2), Universiti Teknologi MARA (UiTM), Melaka Branch. Thanks also
to ICAN and PJI, UiTM Melaka branch for working hard to make it a success.

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