KUALA LUMPUR (March 21): While logistics costs have been the main concern for the previous 1Malaysia People's Shops (KR1M 1.0), the government will help reduce transportation costs for the new KR1M 2.0, said Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi.

Speaking to reporters at a press conference here today, Ahmad Zahid said the government will be absorbing the transportation costs to help synchronise the prices of goods in Peninsular Malaysia as well as Sabah and Sarawak.

"Definitely, it (KR1M 2.0) will have a very sustainable price," he said, explaining that the government will be negotiating with manufacturers and producers to bring down prices of the goods to below market prices.

He highlighted that there are no direct investments from the government; however, in the effort to synchronise the prices for the whole nation, the government will not only be reducing the cost of transportation but also the cost of distribution.

However, he did not disclose how much the government will be absorbing.

"Their cost of transportation is one of the elements of escalation of price. Hence, the government is taking special effort to not only maintain the offered price below market price; we do not compromise on the quality and branding of the product," said Ahmad Zahid, adding that the abolished cabotage policy in June last year will help reduce cost.

He also added that the government will be setting some allocation for transport companies to transport all the products.

The second-generation KR1M, spearheaded by Perbadanan Nasional Bhd, was launched today with new strategic partner KK Super Mart.

Currently, there are 52 KR1M 2.0 outlets and the ministry has targeted to have 3,000 KR1M outlets by 2020. Out of the 52 outlets, 31 outlets are with KK Super Mart, while 21 are from Tunas Manja Group.