Malaysia third most attractive for retail investment

PETALING JAYA: Malaysia is the third best country in the world for retail investment for the second year in a row, according to management consulting firm A.T. Kearney’s 2017 Global Retail Development Index (GRDI).

A.T. Kearney said Malaysia’s attractiveness was in the influx of tourists, higher disposable income and government investment in infrastructure.

Malaysia is behind India and China in the ranking of the top 30 developing countries.

“Malaysia’s successful performance in this year’s Index is consistent with the increased interest foreign retailers are showing in this market, in both traditional and online channels. Aggressive moves are being made into the convenience segment by companies such as Japanese retailer Aeon who is set to triple its number of stores in Malaysia to 150 within the next three years,” its partner and head of Southeast Asia Soon Ghee Chua said in a statement yesterday.

The GRDI, now in its 16th edition, ranks the top 30 developing countries for retail investment worldwide.

The Index analyses 25 macroeconomic and retail-specific variables. The study not only identifies the markets that are most attractive today, but also those that offer future potential.

The consulting firm said Malaysia’s retail market continued to grow despite a slight dip in overall gross domestic product (GDP) growth and short-term pressures of currency fluctuation and inflation, adding the longterm prospects of the sector continue to remain strong.

It said Malaysia’s retail sales in 2016 grew 3.8%, largely driven by a 6.1% increase in private consumption, despite headwinds of a depreciating currency and the 2015 rollout of the Goods and Services Tax (GST).

Meanwhile, Soon said online retail is expected to grow at 23% per year through 2021, driven by electronics and media.

He said the growth in online retail, along with the rise in mobile phone adoption across the nation, will continue to provide momentum to the sector’s growth and attract further investment.

“The government’s continued efforts to position Malaysia as a hub for cross-border e-commerce is another factor that is playing an important part in Malaysia’s retail growth story,” he added.