Going digital the next step for retailers

With the rise of the ecommerce trend, many agree that Malaysian retailers need to start offering online shopping facility for the convenience of their shoppers.

The research arm of Hong Leong Investment Bank Bhd (HLIB Research) highlighted that on the recent development of e-commerce, the rising implementation of e-payment gateways such as AliPay within the retail shops such as 7-Eleven and Genting-related merchants could open up a new way of spending behavior among consumers and materialise the e-commerce trend moving forward.

“Moreover, with the launch of Alibaba’s regional distribution hub in Malaysia by Jack Ma, coupled with increasing its stake of another US$1 billion in Lazada to expand its Southeast Asian journey, it may open up more opportunities within the SEA region,” HLIB Research said.

On the recently introduced Alipay in Malaysia, Tan noted that while this will become a new form of payment for consumers, it will not have major impact on the retail activities.

“It will be another form of payment for Malaysian consumers,” he said. “Instead of cash, cheque, credit card and debit card, you can now pay with your handphone.”

Tan went on to highlight that more retailers in Malaysia will accept mobile wallet payment in the near future.

With smartphone ownership in Malaysia accounting for 70 per cent of the total handphone ownership and the price of smartphones also getting cheaper, Tan thus believed that this new method of payment will be widely accepted by Malaysian consumers in the short term.

In fact, with the rise of Alipay services in Malaysia, Malaysia Retail Chain Association president Dato’ Garry Chua believes that this will encourage more tourists from China to visit Malaysia.

Chua emphasised that all retailers and small and medium enterprises (SMEs) will have to start using the digital platform as a balancing game as what is currently happening in the US and China.

“Many malls have closed or rebranded or been used for other related purposes due to malls glut and also the convenience of online (shopping),” he said. “For example, Amazon in Singapore introduced delivery within two hours to (compete with) Alibaba.”

As such, Chua encouraged all retailers and members of the association to ride on the government’s Digital Free Trade Zone (DFTZ) to avoid missing out on the rising trend of ecommerce.

Meanwhile, Plaza Merdeka Group managing director Datuk Steve Ng opined that e-commerce is an undeniable fact and everyone (not just retailers) need to adapt to the new reality.

“We should study ways to evolve to maximise our positioning and fit in the new digital economy,” Ng said. “Redesign of the jigsaw.”

Tan acknowledged that while the online retail market will continue to grow, it will not replace the brick-and-mortar retailers.

The reason being that as with pure-play online retailers, traditional retailers in Malaysia are also now embracing this modern technology.

“Many of them have introduced online facility as an alternative distribution channel to their customers. They are now competing head on with pureplay online retailers.

“The latest that did this is H&M. Malaysians can now shop online for H&M products. It delivers to Malaysia now,” Tan said.

Tan also explained that pure-play online retailers are now setting up physical stores because their loyal customers tell them they still want to feel and try their products.

“Christy Ng has five brick-andmortar stores, FashionValet has three physical stores, Twenty3 has five physical stores and Bawal Aidijuma has 22 retail outlets,” he said.

“XiaoMi handphone can now be purchased through their first physical store in Malaysia (Queensbay Mall in Penang).”

He added that successful retailers in the future are the ones who are able to sell their products though multiple channels, including through physical store, desktop, tablet and mobile phone.