Digital transformation should not be temporary

Financial institutions, govt must play more active roles

“In the post-pandemic era, retailers need to continue to leverage the right technology to offer value-for-money products and services that can be purchased conveniently through multiple channels.” Tan Hai Hsin

PETALING JAYA: With the transition to endemic phase, retailers are set to improve the industry through the digitalisation of physical stores.

Retail Group Malaysia (RGM) managing director Tan Hai Hsin said Covid-19 has sped the retail digital transformation since early 2020 that has led to a new revolution in Malaysia.

He said retailers have increasingly proven to be sustainable with the current technologies and innovations.

“The pandemic has accelerated the digital transformation for retailers in Malaysia. Payment via e-wallets or orders through scanning of QR codes have become more widely adopted.

“In the post-pandemic era, retailers need to continue to leverage the right technology to offer value-for-money products and services that can be purchased conveniently through multiple channels,” he said at the Web Bytes launch yesterday.

RGM, which conducts research on the Malaysian retail sector, predicted the local retail industry would grow by 4.2% in the second quarter as shopping traffic has started to pick up before the Hari Raya period.

Meanwhile, retail sales in the first quarter recorded a strong growth of 16.5%, with interstate travel and most shops having opened during Chinese New Year celebration.

Tan said the weaker ringgit has not yet affected consumer spending.

“Retailers are enjoying better sales. Some even have better sales than before the pandemic. The trend says it is good now. My only concern is how long will it last?” he said.

“Looking at what happened last month, we may have to revise the projection for the second quarter upwards.

“There are a lot of external factors affecting consumers’ purchasing power such as inflation and high prices. The higher interest rate and the Ukraine-russia conflict are also affecting us,” he added.

Tan said consumers, financial institutions, technology companies and the government need to play more active roles to ensure the digital transformation is not temporary.

In its report, RGM has revised upward its retail sales growth forecast for Malaysia this year to 6.3%.

Tan said all retail trades were affected during the pandemic, and entertainment, recreational, event hall, night entertainment outlets and tourist-oriented stores were the worst affected.

“The weakening of the ringgit affects retailers that rely on imported goods as they need to spend more to bring the goods in, depending on which countries they are importing from,” he added.

He hopes traditional retailers will not rely solely on physical stores to grow as they need to provide multi-channel distribution to consumers in both physical and online stores.