Local retailers face stiff competition from abroad

PETALING JAYA: The influx of foreign retailers have brought it more choice for consumers and more competition for the local retail scene, according to independent retail research firm Retail Group Malaysia managing director Tan Hai Hsin.
“For example, the arrival and expansion of the likes of Zara and Cotton On have affected sales of local national chain fashion retailers such as Padini, Voir, Nichii, YFS. The expansion of these foreign retailers has also affected sales of other foreign retailers who have established themselves in Malaysia since the 1990s, including Giordano, Hang Ten, G2000,” he told SunBiz recently.
He said buying fashion items from local and overseas online stores are also becoming popular and this has affected brick-and-mortar fashion stores as well.
“The liberalisation of the Malaysian retail sector in recent years continues to encourage more foreign retailers to invest and set-up their retail stores within shopping malls in Malaysia.”
New fashion retailers opened first outlets in Malaysia during the last two years include Blackbarrett, Desigual, MCM, Tory Burch, Halston, Pisidia, Under Armour, Piquadro, Palladium, SPAO, MIXXO, WHO.A.U.
New food and beverage outlets that opened first outlets in Malaysia in the last two years include Nana’s Green Tea, Johnny Rockets, Red Lobster, Fatburger, Quiznos, Jamaica Blue, Longhorn Steakhouse, Olive Garden, Coco Ichibanya, t-Lounge, Ilao Ilao, 4Fingers.
Other overseas retailers that opened their first store in this country include Spotlight, Hamley’s, innisfree, Kare, Index Furniture Mall, HomePro, Tony Moly, Yubiso and several others.
“Competition among retailers is very fierce. Many retailers need to use heavy price discounts and aggressive promotions in order to attract Malaysian consumers to buy. As a result, they suffered from poor profit margin.”
He said national chain retailers need to expand and open more outlets in order to grow their companies, while same-store sales have been declining.
Tan pointed out that food and beverage outlets have been one of the most vibrant trades during Malaysia’s economic uncertainty for the last one year.
“The rapid growth of coffee cafes, bakery cafes, fine-dining restaurants, overseas chain restaurants and food trucks have proven that urban Malaysians are still willing to spend on good foods or dine in a nice environment despite the increasing cost of living.”
Since three years ago, he said there has been an explosion of independent coffee cafes in Malaysia. New coffee cafes are opened almost every week in Klang Valley. They are also new trends in Penang, Johor Baru, Ipoh, Malacca, Kuantan, Kota Kinabalu and Kuching.
“Nice bakery cafes are still growing and spreading throughout the country. In Klang Valley, more people are willing to pay more than RM10 for a loaf of gourmet bread,” quipped Tan.