Malaysian retailers urged to go digital

KUALA LUMPUR: The Malaysia Retail Chain Association (MRCA) wants to drive the retail industry to go into the online arena, in line with the government’s aspirations, for better opportunities and to compete better.

President Datuk Garry Chua said online adoption among Malaysian retailers is still relatively low, but the initiative to start thinking and adopting digital strategies is there. He said members are putting their products for sale online and gauging feedback from online channels.

“Some of our members have started adopting online initiatives but it takes time to pick up. But it’s a good start. Since the government is bringing in Alibaba, we have to rely on that wave to benefit the retailers and SMEs to the maximum,” he told reporters after opening the MRCA Retail Conference 2017 yesterday.

He said online sales contribution is growing, but on a gradual mode.

“This depends on the Digital Free Trade Zone (DFTZ). If it kicks off faster, the process (online sales) will be faster. We’re looking at the next three years (for a pick-up in online sales). Definitely a double-digit growth for online after this,” said Chua.

Despite the growing importance of e-commerce, he said brick-and-mortar stores will not totally lose its presence.

“You have to fine tune the balancing game. Countries like the US, Singapore and Malaysia always have a supply of malls, so some have to be wiped out. It’s like a rationalisation process. You can’t have too many, so there’s a balancing of online and offline,” he said.

He reiterated MRCA’s expectation of a 4.5% growth in retail sales this year, driven by tourism.

Themed “Retail Innovation: The Future is Now”, the MRCA Retail Conference 2017 discussed shifting retail landscapes, disruptive technology, digital economy, DFTZ and understanding Gen Y, in line with the government’s aspirations of spurring Malaysia’s economic growth by providing cross-border e-trade facilities for SMEs.

The conference was officiated by International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

In his speech, Mustapa said the government launched the Productivity Blueprint a couple of months ago and has set up three groups of Productivity Nexus, in which one is a Productivity Nexus for retail and food & beverage (F&B) to be led by the private sector. The Nexus also comprises of organisations such as MRCA, Bumiputra Retail Organisation, Malaysia Franchise Association among others, in partnership with the government.

“We recognise the importance of the retail and F&B sectors, which employ no less than 2.5 billion people and contribute 8.3% to GDP. Having said that, labour productivity in many of the sectors in the country is one of the lowest, therefore we formed the Productivity Nexus, which is about sharing of best practices,” Mustapa said.

He added that innovation is important for retailers to move with the times and to be ahead of the curve, with digital being the way forward.

The MRCA Retail Conference 2017 was held in conjunction with MRCA’s Malaysia International Retail Franchise & Licensing Fair 2017, which starts today.