SALES LIKELY TO SEE
Private consumption continues to drive businesses in Malaysia
KUALA LUMPUR firstname.lastname@example.org
RETAIL sales are likely to grow by 3.9 per cent this year from 1.7 per cent last year, in tandem with the projected growth in the economy as well as a more stable ringgit.
Retail Group Malaysia managing director Tan Hai Hsin said a weaker ringgit had resulted in about 20 to 30 per cent rise in prices, which had driven down consumer sentiment last year.
The retail industry turnover last year totalled RM97.8 billion.
Tan said the worse-hit were the Tier-One department storescum-supermarkets.
“Private consumption continues to contribute a strong growth because spending patterns of Malaysian consumers have shifted more to travel and food and beverage,” he said at a briefing during the Bursa-HLIB Stratum Focus Series, here, yesterday.
Jointly organised by Hong Leong Investment Bank and Bursa Malaysia, the conference discussed the impact of the rapidly growing e-commerce sector on Malaysia’s retail industry and the economy.
Since the Goods and Services Tax was introduced two years ago, retail sales have been growing at below market expectations, even during the major festivals.
Tan said despite an online explosion in recent years, online retail sales accounted for about two per cent of total retail sales although it had room to grow up to 15 per cent.
“In recent years, both sides of the retailing formats are crossing, over with traditional stores taking on new technology and online stores setting up brick-andmortar stores.”
Malaysia Digital Economy Corp Sdn Bhd director Wee Huay Neo said e-commerce in Malaysia was at a nascent stage at 10.8 per cent growth. It was at an inflection point and for it to grow by 20 to 25 per cent to join the ranks of countries like India, Singapore, Taiwan and China, there must be focused interventions.
The national e-commerce strategic roadmap will ensure that growth more than doubles to between RM114 billion and RM170 billion in 2020.
Marc Woo, from Google Malaysia, said the penetration of e-commerce was weak in the retail industry although there had been a shift in consumer and shopping behaviour.
“Google’s consumer barometer found that over 70 per cent of Malaysians shopped offline after doing research online.”
The growing e-commerce segments are home appliances (63 per cent), hair care (58 per cent), do-it-yourself (55 per cent) and home furnishings and groceries (both 56 per cent).
Retail Group Malaysia managing director Tan Hai Hsin says both sides of the retailing formats are crossing over, with traditional stores taking on new technology and online stores setting up brickand-mortar stores.