Challenges Faced by Malaysian Consumer Cooperatives in Pursuit of Survival and Sustainability During Covid-19 Pandemic

Indeed, consumer cooperatives worldwide have relentlessly faced tremendous challenges and predicaments. Entangled with economic turbulence, political instability, and even worse, the lockdown due to Covid-19 have left them struggling for survival and sustainability. Triggered by the issues above, the study is motivated to explore the challenges consumer cooperatives face during the Covid-19 pandemic in Malaysian context. The study also elicited how they mitigate those challenges in pursuit of survival and sustainability. The researchers interviewed 19 consumer cooperatives' managers and analysed the data using a phenomenography approach and NVivo 12 software. Results revealed that they faced several challenges: reduction in revenues, insufficient cash flow, strict adherence to standard operating procedures, shortage of supplies, and shrinking business contracts. They mitigated those challenges through business innovation, government assistance, technology adoption, and obtaining credit from financial institutions. The discoveries provide beneficial insights to policymakers, consumer cooperatives, members, academia, and the like on the challenges faced by consumer cooperatives and how they mitigate them in pursuit of survival and sustainability. For future research, it is suggested to explore the challenges in different contexts and regions. Hence, the results can help many parties to identify the appropriate assistance specific for each context, region, location, and country.


Introduction
A cooperative is a non-profit and people-centered enterprise possessed, operated, and managed by members. It brings communities collectively in a representative and equivalent manner to realize a common economic, community, and cultural need and desire (ICA, 2019). The cooperatives take part in a significant role in elevating the socio-economic and well-being of members of communities. They also substantially contribute to the nation's Gross Domestic Product (GDP). Indeed, the government has recognized the cooperatives as one of the potential sectors to achieve the aspiration of Sustainable Development Goals (SDG) of the United Nations, building resilient infrastructure, promoting sustainable industrialization, and reducing income inequalities by 2030 (Aris et al., 2018;Esim, 2017;UN, 2017).
Cooperatives symbolize a powerful, feasible and vibrant economy, which suits those who feel powerless and find it difficult to work alone. Most importantly, they take the opportunity to address people's common interests. The reason is based on the strong belief that by working together, a group of people may accomplish goals, which may not be able to succeed if working individually. For more than a century, almost all nations have established cooperatives (Dogarawa, 2010). Since then, they have become effective agents in enhancing the economy, not only for members but also for communities and nations. As of 2019, there were approximately 3 million cooperatives worldwide, representing 12 percent of the world's institutions, providing more than 100 million jobs or 10 percent of the employed population globally (ICA, 2019).
However, cooperatives have faced many challenges since their inception. Covid-19 pandemic has severely deteriorated most cooperatives worldwide, including Malaysia. Indeed, Malaysian cooperatives suffered losses of more than RM10 billion (equivalent to USD2.5 billion) (Carvalho & Tang, 2021). The losses have severely impacted many parties, specifically their members which are mainly from the low-income groups. In mitigating the losses, the government has initiated the Malaysian Cooperative Transformation Plan 2021-2025. Several economic stimulus packages were offered in the five-year transformation plan to assist the affected industries. The assistance of revolving fund of the Cooperative Commission was RM50 million (USD12.5 million). More than 14,000 cooperatives received financing from the funds, which offered incentives of up to RM100,000 (USD25,000) without requiring any deposit.
Pursuant to this, many researchers have conducted studies to explore issues and challenges faced by various types of cooperatives. Among others were consumer cooperatives (Hasbullah, 2015), rural cooperatives (Hussain, 2014;Lawangen, 2022;Mhembwe & Dube, 2017), farmer cooperatives (Grashuis & Su, 2019;Gray & Kraenzle, 2002;Nosov et al., 2020;Yang et al., 2014), cooperatives in all sectors (Azhari et al., 2017;Dongre & Paranjothi, 2020;Mohamad et al., 2013;Sugardo, 2016) and agricultural cooperatives (Ahsan & Nurmayanti, 2016;Bernard & Abate, 2013;Francesconi et al., 2020;Kenkel, 2019). Hasbullah (2015) claimed that of many cooperatives, consumer cooperatives are the most vulnerable. The establishment of consumer cooperative is to provide the daily needs of goods and services at competitive prices to members and societies. Members and societies can purchase food, clothes, and other consumer products without financial burden. Despite being very significant in elevating the social, economic, and well-being of members and societies, many consumer cooperatives are phasing out (Hasbullah, 2015) due to abundances of unresolved issues.
Because of this, the present study is motivated to explore the phenomenon faced by consumer cooperatives in Malaysia. The researchers chose consumer cooperatives due to the fact that they are more likely susceptible to economic uncertainties and turbulence. Thus, the present study aims to answer the following research questions.
1. Why do Malaysian consumer cooperatives face challenges during Covid-19 pandemic? 2. How do Malaysian consumer cooperatives mitigate the challenges in pursuit of survival and sustainability? The paper starts with introduction followed by reviewing the literature. Next, it explains the methodology adopted before trailing with data analysis and discussions on the results. Finally, it ends with conclusion, implications and limitations before suggesting for future research.

Literature Review Cooperatives Movements
Cooperatives operate ethically and communally which differ from any other economic institutions. They are not established merely for profit-making (Sugardo, 2016). Indeed, their business models centered along with the values of self-help, self-responsibility, democracy, equality, and solidarity. The International Cooperative Alliance (ICA, 2019) articulated those values in its statement, stressing the kind of cooperators strive to be and the traits they hope to teach. Members can develop these traits through working together and incorporating positive values like integrity, transparency, social responsibility, and compassion for others (Dogarawa, 2010).
Indeed, the modus operandi of cooperatives is similar to other businesses. They do not only serve a market efficiently and effectively, but they must also be professionally managed and financially viable. Three main groups of people manifest the difference between cooperatives and other businesses. They are the owners, the persons who manage them (the manager), and the persons who use them (the customer). In a cooperative, all three groups form a unity: those who own, control, and use. These three groups are the members who bring cooperatives into existence, keeping them in operation and ensuring their sustainability.

Cooperatives Movement in Malaysia
Cooperatives have also gained much acceptance and growth in Malaysia. Since their inception in the 1920s, people have recognized cooperatives for their social and economic contribution to the national economy. The purpose of their establishment is to encourage savings, offer loans to farmers and government servants, and reduce the deficit in spending (Fredericks, 1974). Cooperatives that engage in high economic value, particularly in valueadded activities, can generate income for themselves, benefiting members and aiding to national development goals (SKM, 2010). However, despite the outstanding performance, Malaysian cooperatives have once entangled with the scandalous history of mismanagement, criminal breach of trust, and fraud which forced the government to bail out them that incurred a massive cost and losses to the nation .
The Malaysia Cooperative Societies Commission had 14,668 cooperatives registered as of 2020. From this amount, 9,397 are active, 2,134 are inactive, and the remaining 3,094 are dormant. The statistics further indicated that the cooperatives have about 6.1 million members nationwide. Most of them are in the lower-income group (Carvalho & Tang, 2021), representing nearly 20 percent of the country's population.
To date, there are nine types of cooperatives operating in Malaysia, namely banking, credit/finance, agriculture, housing, industrial, consumer, construction, transportation, and services. In terms of membership, consumer cooperatives are the largest represented by 2.03 million members, equivalent to 33.60% of total cooperatives membership. However, their turnover and contribution to the nation's economy are fourth after banking, credit, and services cooperatives.

Issues and Challenges Faced by Cooperatives in Various Nations
Although profit is not the ultimate concern, making a profit is essential to maintain business sustainability. However, in running the businesses, all cooperatives in every nation cannot escape from facing issues and challenges, especially during the global economic crisis. Prior studies have indicated that most cooperatives worldwide face myriad challenges in pursuit of survival and sustainability (Ahsan & Nurmayanti, 2016;Billiet et al., 2021;Hasbullah, 2015;Francesconi et al., 2021;Fairlie & Fossen, 2021;Kenkel, 2019;Khumalo, 2014;Meniga, 2015;Mhembwe & Dube, 2017;Mohamad et al., 2013;Nkoki-Mandleni & Anim, 2014;Thomas & Hangula, 2014;Tambunan, 2021). Ahsan and Nurmayanti (2016) conducted a study to explore the challenges faced by Indonesian cooperatives. They found that most cooperatives in Indonesia were small and slow-growing businesses, and therefore, high-skill laborers did not prefer to work with the institutions. Another issue encountered was lack of networking and connectivity between cooperatives. For example, an agricultural cooperative can supply agricultural products to consumer cooperatives, but the supply chain fails to occur because of no linkage. If they could overcome the issues, cooperatives could be pillars of the nation's economy as envisioned by their establishment.
On the contrary, Billiet et al (2021) found that the cooperatives showed their resilience in times of Covid-19 crisis. They believed that the user-members concept in cooperatives and cooperatives' linkage to their community and global network enhance their resilience.
Meanwhile, Hasbullah (2015) indicated that consumer cooperatives face many challenges. He distributed questionnaire at random to 300 cooperatives in Peninsular Malaysia. Results revealed that cooperatives' utmost issues and challenges are inadequate working capital, followed by poor governance, lack of members' involvement, poor marketing strategy, supplier relations, competitions, and lack of employees' motivation.
In view of the current Covid-19 crisis, cooperatives are not spared from the devastating economic disruption caused by the pandemic. Francesconi et al (2021) reported that many agricultural cooperatives from Southeast Africa could not offset marketdisruptions and became dormant during the pandemic. Among the factors that contributed to the vulnerability of the cooperatives are organizational immaturity, large membership size, elite capture, and limited business-orientation.
On the other hand, a study conducted by Fairlie and Fossen (2021) analysed the effect of sales losses on cooperatives in California, the United States, during the early COVID-19 outbreak. They used administrative data from the California Department of Tax and Fee Administration. Results indicated that many cooperatives close their operations due to decreased sales. In contrast, they found that there is an increase in online sales. Therefore, the researchers proposed that the government encourages cooperatives to conduct online business transactions.
Kenkel (2019) explored the external challenges faced by agricultural cooperatives in the United States. The researchers highlighted that the cooperatives faced volatility of commodity prices in international markets. Indeed, the cooperative members wanted the highest market prices for the commodity but with the lowest input costs. The cooperatives also faced intense competition, whereby they could not compete in global markets. Additionally, other challenges encountered are competition from non-cooperatives, environmental regulations, and policy changes on farms and energy. Khumalo (2014) highlighted some of the challenges that cooperatives face in South Africa: high attrition rate, leadership, and management challenges, interference by government officials, and lack of stability. Meanwhile, Meniga (2015) found that the significant challenges faced by cooperatives in Ethiopia are functional weakness and absence of good governance. He also stressed the lack of capital, cooperation between cooperatives, training, managerial talent, and integrity among the management.
Mhembwe and Dube (2017) explored the challenges faced by rural cooperatives in Shurugwi District, Zimbabwe. They discovered that the cooperatives encountered several challenges: lack of financial support, poor management, lack of management skills, and lack of competitive market to sell their products. They recommended the government and banking to provide financial support training on leadership and management skills for the members.
Meanwhile, a study conducted in Malaysia performed by Mohamad et al (2013) elicited that the challenges faced by Malaysian cooperatives are accountability and regulation systems. For many years, they also found that Malaysian cooperative movements are entangled with lack of capital, weak governance, lack of management talent, and integrity among the management and members. Intertwined by an abundance of challenges, the survival of the cooperatives would be at stake if the authorities take no action.
The failure of cooperatives in South Africa, according to Nkoki-Mandleni and Anim (2014), is due to disagreements among members, conflicts of interests, lack of members' commitment, and difficulty in managing members. Additionally, according to Thomas and Hangula (2014), cooperatives in Namibia have a number of obstacles, including lack of knowledge in cooperative concept and principles among the members and general public.
Tambunan (2021) explored the challenges faced by cooperatives during Covid-19 pandemic crisis in Indonesia. He examined 66 KSPs (Kantor Staff Presidential) in various cities across the country from September to November 2020. He identified five types of challenges; decreased turnover, decreased total saving, additionally, number of loan applications, decreased activities, and decreased a number of members. Out of five, the first three challenges are the most prevalent.

Study Design
The researchers conducted this study qualitatively by employing a phenomenological approach. The researchers interviewed 19 informants who were managers of consumer cooperatives management in Kelantan. Kelantan is one of the states situated at the East Coast of Peninsular Malaysia. A minimum sample size of at least 12 has been recommended to reach data saturation that qualitative studies require (Fugard & Potts, 2015). Therefore, 19 informants were deemed sufficient for the qualitative analysis. Samples in qualitative research tend to be small to support the depth of case-oriented analysis that is fundamental to this mode of inquiry (Sandelowski, 1996). Also, qualitative samples are purposive, that is, selected under their capacity to provide richly textured information relevant to the phenomenon under investigation (Vasileiou et al., 2018).
The researchers asked every informant to answer two questions. The first question was why consumer cooperatives faced challenges during Covid-19 pandemic. The second question was how the consumer cooperatives mitigate those challenges in pursuit of survival and sustainability. The researchers encouraged the informant to respond without imposing any restrictions. Applying the grounded theory approach, the researchers did not anticipate any response pattern, whereby they were free to express their views. However, the researchers provided them with careful and detailed clarification. They would probe further for any ambiguity that arises and facilitates wherever necessary, leading to an in-depth analysis. Every interview session took between 15 to 20 minutes. The justification for conducting the phenomenological study was to explore the experienced phenomenon (the challenges faced by Malaysian consumer cooperatives and how they mitigate them).
The first researcher audio and video recorded the interviews. After every interview, the second researcher would immediately transcribe the conservations verbatim. Then, she would immerse the informants' experience with their facial expression and gesture movements to assure that she has accurately written those experiences. Finally, the third researcher would read the transcriptions before showing them to the informants. The informants would confirm the accuracy of the transcriptions. After clarification, the researchers would amend accordingly before proceeding with data analysis.

Data Analysis
The researchers employed SPSS version 26 for descriptive and frequency analysis. Also, the researchers used NVivo (Version 12) in analysing the transcriptions. This software can analyse the unstructured text, such as participant interviews, to find connections by generating code and themes. The software developed themes after identifying commonalities and dissimilarities of the data. The researchers would then categorize and label participants' explanations. In addition, NVivo can diagrammatically map out how the themes connect (Welsh, 2002). Hence, the emerging themes derived from the responses provided by the informants would facilitate the researchers in answering research questions 1 and 2.
Before disclosing in narrative reports, the researchers analysed and interpreted the NVivo results in conjunction with other primary sources of evidence such as informal discussions, supporting documents, and behavioral observations, enabling for a quick view of the large picture and the inter-relationships of the codes. Following that, the researchers gathered the data under descriptive codes and thematic ideas emerged to ensure that the theoretical concepts could be evidenced in the data, thereby addressing the validity of the research results, and making it easier to see if all data were suitable.

Results and Discussions Demographic profile of Informants
Initially, the researchers analysed the demographic profile of the respondents. Results indicated that the informants consisted of 15 females and four males. In terms of age, majority of them were above 51 years (8 people), followed by 41 years to 50 years (7 people) and 31 years to 40 years (4 people). The results further indicated that all informants were Malays. Furthermore, 14 people had bachelor's degree, followed by two people who had master's degree, and the remaining three had diploma or matriculation certificate. Finally, 12 people have worked more than 21 years, followed by 16 to 20 years (4 people), 11 to 15 years (2 people), and 6 to 10 years (1 person). Table 1 depicts the demographic profile of the informants. Next, the researcher analysed the data according to the research questions.

Challenges Faced by Consumer Cooperatives during Covid-19 Pandemic
The first research question is why consumer cooperatives face challenges during the Covid-19 pandemic. Based on the informants' responses, the researchers identified five emerging themes: decrease in revenue, strict standard operating procedure, shortage of supplies, shrinking business contracts, and insufficient cash flow. The themes are detailed out as below.

Theme 1: Decrease in Revenue
During Covid-19 pandemic, the most significant challenge for consumer cooperatives was sales. Unfortunately, sales were declining, resulting in no profit, making it difficult for the cooperatives to increase sales turnover and thus the revenue.
"As a result of the drop in sales, no profit was made." (Manager 5) "The purchasing power is reduced, resulting in a decrease in sales and no profit." (Manager 10) "The inability of the business to operate as usual has resulted in a decline in sales." (Manager 8)

Theme 3: Shortage of Supplies
The third sub-theme that emerged from the theme of challenges was the shortage of suppliers. "Stocks were difficult to obtain because the supplier did not fully operate." (Manager 19) "The price of goods increased slightly due to shortage of supplies." (Manager 4) "Supplier shortages are having a significant impact on consumer prices." (Manager 11)

Theme 4: Shrinking Business Contracts and Projects
The fourth sub-theme highlighted by informants was shrinking business contracts and projects. "Many projects are disrupted because the general meeting cannot be held." (Manager 17) "Business contracts are diminishing, and some are cancelled." (Manager 15) "Many projects that were previously planned have to be rescheduled." (Manager 4)

Theme 5: Insufficient Cash Flow
"It is difficult to pay the suppliers because there was no cash." (Manager 12) "The most significant issue has been insufficient cash flow." (Manager 8) Based on the responses given by the informants, five themes emerged for the challenges faced by consumer cooperatives. The themes were decreased revenue, strict Standard Operating Procedure (SOP), shortage of supplies, insufficient cash flow, and shrinking business contracts.
The first theme was decrease in sales. Thus, informants stated that they made no profit because of declining sales. Consumers were less inclined to spend more as they reduced spending on all non-essential products and services. The results are consistent with previous studies on the impact of COVID-19 on cooperatives (Fairlie & Fossen, 2021;Tambunan, 2021). Hence, the most prominent challenge Malaysian consumer cooperatives faced was reduced sales which affected their sustainability.
The second theme was the need to follow the SOP. The outcome is similar to Fairlie (2020); Boyd et al (2020), where employees agree to follow the SOP for their own safety despite the fact that many businesses are closed, and operating hours must be changed. Moreover, cooperatives are not listed as "essential services," as such, they are prohibited from operating during the lockdown.
The result also indicated that shortage of supplies was the third theme. Supply disruptions have worsened due to the coronavirus outbreak, as logistical lockdowns impede business operations during pandemic (Butt, 2021;Ferreira et al., 2021;Juergensen et al., 2020;Mashud, 2021). As cooperatives' businesses relied on continuous supply of goods and services, the disruption would severely affect the cooperatives.
The fourth emerging theme was shrinking business contracts and projects. Indeed, many business projects were postponed or abandoned due to Covid-19 crisis. Moreover, as the problem deteriorated, many tend to avoid initiating a new project or contract, posing a real challenge to cooperatives.
Finally, the last theme was insufficient cash flow. Because of reduction in sales and could not operate during regular working hours, many cooperatives could not maintain sufficient cash to settle their short-term obligations when they were due. The results concurred with Hasbullah's (2015); Meniga's (2015) studies, indicating that consumer cooperatives faced liquidity issues.

How do Consumer Cooperatives Mitigate the Challenges Faced by them During Covid-19 in Pursuit of Survival and Sustainability?
Based on the responses given, the researchers discovered the emergence of 4 themes. The themes were innovations, government assistance, technology adoption and obtaining credit from financial institutions.
The researchers further discussed the themes in the following sections.

Theme 1: Innovation
The informants described the innovation they took for them to survive during COVID-19.
" Take  "Bank can provide us with fast cash to settle short-term obligations." (Manager 11) The researchers described the four themes in the following sections. The first theme was innovation. The informants highlighted the innovations taken by the cooperatives to ensure their survival, such as resorting to making masks and other personal protective equipment that was in high demand during Covid-19 outbreak. They also intensified the effort to increase sales by offering discounts and vouchers to customers.
Another theme was government assistance. Many of them were aware of the funds provided by the government specifically to aid cooperatives in facing the economic crisis during Covid-19 pandemic. The funds would help them face difficult situations, especially settling their immediate expenses. They also sought government contracts and tenders besides management assistance. Hence, the cooperatives also had to rely on government intervention to ensure the sustainability of the cooperatives sector in particular and the country as a whole. The result resonated with the works of (Chandra et al., 2020;Mhembwe, 2017;Juergensen et al., 2020;Tambunan, 2021).
The third theme was technology adoption. The lockdown deterred the cooperative from operating under usual conditions. Because of this, many of them chose online platforms to promote and sell their products. For example, they switched their focus to online sales. The result was consistent with previous research by Fairlie and Fossen (2021) that agreed on the role of digital technologies in promoting cooperative sustainability.
The fourth and last theme was obtaining credit. Many cooperatives received loans from financial institutions to help them settle their immediate expenses. In addition, the financial institutions could provide them quick cash instead of other government agencies. Thus, they could pay water and electricity bills, rental, and employees' salaries while waiting for the economy to recover.

Conclusion
Understanding the issues and challenges faced by the cooperatives is vital for their survival and sustainability. The first discovery indicated that during Covid-19 pandemic, the consumer cooperatives faced five challenges: decrease in revenue, strict standard operating procedure, shortage of supplies, shrinking business contracts, and insufficient cash flow. The second discovery indicated that the consumer cooperatives mitigate the challenges by innovations, government assistance, technology adoption, and obtaining credit from financial institutions. This research provides valuable insights to many parties namely authorities, policy makers, cooperatives and the likes on the challenges faced by cooperatives in pursuit of survival and sustainability, specifically when facing catastrophic events like Covid-19 pandemic. The sustainability of the cooperatives in the future is crucial, especially in promoting social well-being and uplifting the economics, not only for members but also for the entire nation's development as envisioned on the agenda of cooperatives establishments. Hence, all parties should act in concert to assure that the consumer cooperatives can further thrive and flourish despite various challenges ahead.

Practical Implication
The research offers practical implications to the government to identify the specific sector of the cooperative before providing them with appropriate stimulus packages. Besides providing the cooperative with funding, the government can equip them with high-skilled and digital training. This can make them competitive; thus, enabling the cooperative to compete in local and international markets.
The research also offers implications to many stakeholders, such as cooperative management, regulatory bodies, and policymakers to deploy possible assistance and interventions for the survival and sustainability of the cooperatives. Hence, the success of cooperative can elevate the economic development of the nation.

Academic Implication
The research contributes to the body of knowledge on the challenges faced by consumer cooperatives during Covid-19 pandemic. Also, the study provides valuable insights to the policymakers and authorities on how the consumer cooperatives mitigate those challenges in pursuit of their survival and sustainability.

Limitation of the Research and Suggestions for Further Research
Although the study contributes many important discoveries, it has several limitations. First, the research focuses only on Malaysian consumer cooperatives situated in Kelantan. Therefore, their challenges may differ from those in other locations, regions, or countries. To overcome this issue, future research is suggested to explore the challenges in different contexts and regions. Hence, the results can help many parties to identify the appropriate assistance specific for each context, region, location, and country.
The current research uses a qualitative approach. As such, the results cannot be generalized to the entire population. To overcome the methodological limitation, the researchers recommend future studies to conduct a quantitative approach. Thus, the results can enhance the generalizability of the consumer cooperatives' challenges and how they overcome and mitigate the issues in pursuit of survival and sustainability.