The e-commerce market is one. According to BMI Research, three specific areas: big-box boulevards, e-commerce, and duty-free shopping will be the key growth areas in Malaysia’s retail sector over the coming years. They are attracting significant investment initiatives that are in line with the government’s National Economic Transformation Program.
The government is currently stimulating public-private investment in modern ‘big-box boulevards’-large scale integrated shopping malls on the outskirts of urban centres. Multinational corporations are predicted to be attracted by Malaysia’s strong outlook for consumer spending.
“We forecast total household spending in Malaysia to expand at an annual growth rate of 7.5% between 2017 and 2021, rising from MYR774b ($250.12b) in 20 17 to MYR1t ($323.45b) in 2021,” BMI said.
Malaysia’s e-commerce sector is still noted to be nascent, with consumers generally preferring to shop using cash in local stores due to a lack of trust with regards to online payments. However BMI estimates that this will gradually change as consumer purchasing habits evolve, supported by the government’s National e-Commerce Strategic Roadmap.
“We forecast Malaysia’s e-commerce market to reach MYR21.04b ($6.81b) in sales in 2017, a 28.2% y-o-y increase,” BMI said.
Malaysia’s tourist industry is another key part of the government’s economic transformation strategy, and like retail, is one of the 12 designated areas for investment. The government’s aim is to position Malaysia as a duty-free shopping destination for the Asia-Pacific Region, centred upon Kuala Lumpur International Airport.
“Our forecasts for tourist arrivals into Malaysia will underpin growth in duty-free retail sales. 2017 will see 28.1m international tourists , rising at an average of 5.2% y-o-y to hit 34.3m by 2021. This will be driven by ongoing weakness in the Malaysian ringgit, making the country affordable for tourists,” BMI said.