Retailing maintains its momentum in 2013
Retailing sustained its current value growth in 2013 versus 2012 despite the soft economic conditions during the year. While the economic conditions reduced many consumers’ confidence to spend, some were still willing to trade up to premium goods to enhance their lifestyle. Retailers were also more aggressive in offering promotions, such as members’ day, that further stimulated demand and willingness to spend. Malaysia’s relentless efforts to drive tourism also benefited the performance of retailing during 2013.
Consumers’ growing sophistication spurs retailing
During 2013, consumers continued to gain exposure to international beauty and fashion trends as well as brands via the internet and overseas travel. With this, their acceptance level of new products and brands increased compared with the early part of the review period. Retailers were therefore eager to import brands from various countries to better meet consumers’ demands. The high internet penetration rate among consumers in Malaysia further enhanced consumers’ ability to access overseas sites and purchase products or brands that are unavailable in Malaysia.
Grocery retailing edges upwards in 2013
The weak economic conditions of Malaysia in 2013 due to the general elections adversely impacted consumers’ confidence to spend. However, this was more pronounced in non-grocery products, with consumers fearful of overspending. Non-grocery retailing thus fell in value share versus grocery retailing in 2013, although maintaining a positive current value growth. Grocery retailing witnessed stronger current value growth than non-grocery as grocery products remained basic essentials. Aggressive promotions by grocery retailers in 2013 further sustained consumer spending.
Competition intensifies in retailing
The retailing scene in Malaysia saw intensified competition during 2013, with store-based retailers engaging in more aggressive price promotions to stimulate consumer demand. Store-based players also focused on improving their product portfolios to ensure better alignment with consumers’ changing needs, while slowing down their expansion pace in 2013. Consumers’ increased acceptance of internet retailing due to the ability to purchase brands and products that are not available in Malaysia also intensified competition within retailing for 2013. In order to drive new revenue sources, store-based retailers also started to offer internet retailing platforms. While internet retailing contributes a minute portion of sales, store-based retailers still viewed this as being able to help them better align themselves with consumers’ needs.
A positive performance is expected for retailing
Retailing is projected to record positive constant value growth over the forecast period, although at a slower pace versus the review period. Malaysia’s economic conditions are expected to improve in the forecast period, which will boost consumer demand. Rising disposable incomes of consumers will also increase their willingness to trade up to premium products that can improve their lifestyle quality. With this, more international brands are likely to enter Malaysia to tap into this opportunity. The Malaysian government will also continue to launch various campaigns to attract tourists, which will further benefit retailing in the forecast period. Internet retailing will also grow in prominence as consumers continue to use this channel to achieve exclusivity. However, this will heighten competition in the retailing environment during the forecast period and will drive an impending need for store-based retailers to seek new growth channels.
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Discover the latest market trends and uncover sources of future market growth for the Retailing industry in Malaysia with research from Euromonitor's team of in-country analysts.
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The Retailing in Malaysia market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic number of stores, selling space and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- How big is the grocery/non-grocery/non-store channel in Malaysia?
- Who are the leading retailers in Malaysia?
- How is retailing performing in Malaysia?
- What is the retailing environment like in Malaysia?
- Which channels are winning or losing in the fight for consumers’ money?
Why buy this report?
- Gain competitive intelligence about market leaders
- Track key industry trends, opportunities and threats
- Inform your marketing, brand, strategy and market development, sales and supply functions
This industry report originates from Passport, our Retailing market research database.