PETALING JAYA: Retailing has changed, affecting mall owners, mall managers and the retailers themselves. The situation is irretrievable, the change unavoidable, the strategy to invest is a must.
It seems to go against all logic and common sense, but Retail Group Malaysia managing director Tan Hai Hsin is making a passionate call to retailers.
“Invest in online shopping platform.
“Do not wait for the time when Covid-19 pandemic will end. Do not stop investing because we are in a partial lockdown at this moment.
“This current situation will most likely be the future as well. The world has changed in 2020, this change is most likely to stay this way, ” said Tan, who tabulates data for the Malaysia Retailers Association, which has about 150 members.
According to him, the future of retail must include multi-distribution channels with retailers needing to offer both physical and online stores.
Despite, however, or maybe because of the challenges, many are “still not willing to invest in online shopping platform.
“They believe the current situation is only temporary and things will return to the same old normal they are familiar with.”
“But in order for retailers to succeed in the near future, they need to fully embrace the current new norm because this situation may be with us for the next few years, ” he said. In many ways, the pandemic and the resulting movement control order (MCO) has become a sieve, separating the wheat from the chaff.
“Social distancing measures may be the new normal in the next few years and retailers need to accept this. Only then, can they start planning for the future based on the current scenario, ” he said.
Malaysia’s retail industry sales turnover amounted to RM513.2bil in 2019 with a total of 342,588 outlets, said Tan.
The industry contributed about 35% to GDP (gross domestic product).
The sales value of the industry includes the transactions of new and used goods to the general public for personal or household consumption. It includes goods sold via shops, stalls, mail order houses, hawkers and peddlers, co-operatives and online platforms.
The sector is multi-layered and diverse with various associations.
Besides the Malaysia Retailers Association, there is also the Malaysia Retail Chain Association, an umbrella for stores that belong to a chain. Then there is the Malaysia Shopping Malls Association, which mall owners and management belong to.
Essentially, MRA and MRCA members are the tenants of Malaysia Shopping Malls Association.
Not many retailers have a presence in malls.
In the earlier days when there were few malls, retailers tried to get into the mall environment because that is where the traffic was deemed to be. But of late, chain stores offering lower-priced goods have sprouted and are thriving, both Tan and an industry source said.
The proverbial retail therapy that so many Malaysians used to enjoy – spending half a day at the mall – have become a pastime of the past.
An industry source who declined to be named said the number of shoppers – footfall in retail parlance – have rose to 70% to 80% in July and August 2020 compared with earlier months of about 40% to 50%.
The recovery MCO started on June 10.
“Visitors are returning but they are not buying. They come for services or essential goods like pharmacies and supermarkets.
“They are not buying clothes, ” the industry source said. According to him, the pattern of shopping has also changed and visitors do not spend the average half the day in malls like before the MCO.
Today, the maximum time they spend in the mall is about two hours, the industry source added.
But for many young Malaysians, they are still brand conscious. Tan said they queued up to buy when some renowned brands had sales.
He added that retailers are trying to generate as much cash as possible in order to make good their business loans come October 2020.
“Those who fail to get sufficient business during this period will close down after the loan moratorium ends on Sept 30.
The government announced a three-month moratorium on loans at the end of July to help borrowers tie over the period.
This will be extended to the end of the year for targeted groups.
Tan said the closures involved both chain and independent retailers in and around city centres to residential townships, large commercial centres to high- and low-income areas.
“Retailers who were struggling before will most likely shut down permanently. Retailers who are highly geared due to aggressive expansion during the last few years will have to stop their plan and restructure their businesses, ” he said.
