KUALA LUMPUR, April 8 — The first Madani Mart was launched in Pahang this month as part of wider efforts to keep the cost of living affordable amid a worsening war in the Middle East that is disrupting global energy and fertiliser supply.

The programme’s announcement immediately drew comparisons to the now-defunct Kedai Rakyat 1Malaysia (KR1M). An initiative of the administration under former prime minister Datuk Seri Najib Seri, KR1M ultimately failed to take off for a multitude of reasons.

KR1M’s main operator, Mydin Holdings Berhad, said losses reached RM100 million by the time the last shop was shuttered in 2017.

So how will Madani Mart be different? Below is a breakdown of how the new model might differ from its predecessors.

Funding: ‘Capital-light’ vs. government-funded

The most significant departure from the KR1M model is the financial structure. KR1M relied heavily on government capital for renovations, equipment, and stock purchases. When those stores failed to turn a profit, the government and the operator (Mydin) absorbed the losses.

In contrast, Madani Mart operates on a private licensing model, according to Yayasan Madani, the programme’s backer.

Deputy Domestic Trade and Cost of Living Minister Datuk Fuziah Salleh said the government will not provide direct capital or pay for renovations, and each outlet is owned and operated by local entrepreneurs who bear most of the business risk.

Fuziah is also one of the board members of Yayasan Madani. She said the foundation will act as the brand owner and ecosystem manager rather than a financier.

Decentralised vs centralised

KR1M followed a centralised “mega-operator” model that led to high logistical costs and a “one-size-fits-all” approach that struggled in rural areas.

Yayasan Madani said the Madani Mart will use a “decentralised ecosystem”. What that simply means is that each outlet would be run by local entrepreneurs as opposed to a single giant operator.

Fuziah said the goal is to have 640 outlets (at least one per state constituency) managed by local small-business owners. The rationale is that this approach optimises locality as an advantage since local entrepreneurs understand their community’s specific needs better.

The Ministry of Domestic Trade and Cost of Living (KPDN) will provide regulatory support while Yayasan Madani provides the operational blueprint.

AI and data-driven?

Analysts said one of the major weaknesses of previous models was the “pricing paradox,” where state-backed “discount” shops like KR1M were sometimes more expensive than traditional hypermarkets due to supply chain inefficiencies.

Yayasan Madani said the Madani Mart model will integrate so-called artificial intelligence to solve this problem. Licensees can then use AI provided by the foundation as a tool to monitor inventory levels and consumer trends in real time to prevent overstocking or shortages.

To succeed where KR1M failed, Madani Marts will need to keep the price of their goods lower.

Fuziah again said the foundation will look to AI to provide “dynamic pricing support” by helping Madani Mart operators analyse competitor pricing in nearby areas. The deputy minister said this would inform licensees with recommended price points that remain competitive yet sustainable.

Then there is scale. By running all 640 planned outlets under a single ecosystem, Yayasan Madani believes it could leverage scale to negotiate better rates with manufacturers and wholesalers than a single small “mom-and-pop” shop could.

The goal is to bypass several layers of middlemen by linking local entrepreneurs directly to larger distribution networks supported by the Ministry of Domestic Trade and Cost of Living (KPDN).