Retail Malaysia 2016 – Growing…very slowly…

Did I buy more stuffs in 2016 versus 2015? Let’s look at just two categories which I am a shopaholic for; shoes and clothes. I did not buy any new leather shoe in 2016 but I did buy two new sports shoes and one new hiking shoe (preparation for Mount KK climb in June 2017). I did not buy a single new T-shirt but I bought 5 new long sleeve shirts for work purpose. I think I spent slightly more in 2016 versus 2016 where clothes are concerned. I could however see that most of my colleagues are using newer smartphones. Okay, it includes my wife because her Samsung smartphone ‘died.’ So, my general conclusion is that retail scene in Malaysia should not be too bad, right? Let’s look at what The Retail Group Malaysia (RGM) is saying in their 2016 retail industry report. Brief conclusions below or you can read full article here.
Q3 2016 grew only by a pathetic 1.9 percent versus 2015. Main cause was due to department store sub-sector recording disappointing sales. The results were 68 percent lower than their members’ expectations. There was however a period of growth and it was between April and June where it grew 7.5 percent.
RGM then said the Goods and Services Tax (GST) is to be blamed as this came into effect in April 1 2015. It made the consumers become negative. Supermarket and hypermarket was still growing but only at 0.7 percent. (I personally disagree at such assumption, better look harder for other reasons including online sales as well which is growing by leaps and bounds. Look at departmental stores results in many other countries where online sales is growing and we would get the same idea…)   
The fashion and fashion accessories sub-sector grew by 7.6 percent versus a year ago. (Yes, I contributed here!) 
The pharmacy and personal care sub-sector enjoyed a double digit growth of 10.2% in Q3 from a year ago. In fact this was the best performing sector. (First of all, I am not so sure if I dare to buy medicine, cough syrup or even facial cream online. I am scared that it will destroy my face even make me sick. I think this sector will be safe for a long time more)
Q4 2016 is however expected to be much better. The members of Malaysia Retailers Association (MRA) are positive with their expectations for a recovering quarter. In fact, the department store operators forecast a growth rate of 5.4% in Q4 2016 while the supermarket and hypermarket operators expect a growth of 4.3 percent. For the entire 2016, RGM has forecasted that the Malaysian retail industry’s sales growth rate would be 3% which is down from their earlier estimated 3.5 percent.
This year, I have started to buy more large items from online, either Lazada or 11Street. They include Air-Fryer which was at least RM100 cheaper than the electronics store I went to. I bought a new baby car seat which was RM50 cheaper. More recently, I bought a new baby electronic cradle which was not only RM80 cheaper but they gave an extra slip on fan for free. However, I would not want to buy clothing online as I prefer to wear it to feel and see it first. I think this needs to also be taken into account if not now, beginning next year. Oh yeah, lots of people were still buying stuffs in 1 Utama today when I was there. Perhaps it’s the time to buy gifts have arrived. Cheers.
written on 10 Dec 2016
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