Signature Market, a Malaysian healthy snacks e-commerce retail platform, has raised MYR 4 million (USD 1 million) of capital from private investment firm RHL Ventures, Axiata Digital Innovation Fund and other investors. Signature Market was founded in 2014 with the aim to provide better access for consumers to healthy and nutritious food.
By selling all natural and organic products directly to consumers on its website, the company has the flexibility to bypass costlier distribution channels, thus allowing them to sell products of high quality and freshness at a competitive cost.
Signature Market’s revenue grew from USD 243,723 (MYR 1 million) to USD 3.29 million (MYR 13.5 million) in 2018, and staff strength increased from five to 50 people. Malaysia remains as its current market focus and it aspires to scale up regionally by leveraging on RHL Ventures’ regional network expertise.
(Sources: Digital News Asia; Deal Street Asia; e27)
Swiss company, DKSH signed an agreement in December 2018 to acquire the consumer goods distribution business of Auric Pacific in Singapore and Malaysia for an initial price of USD 160 million, to complement its existing fast-moving consumer goods (FMCG) market expansion services.
DKSH helps business partners grow by providing a complete range of specialized services along the value chain: from sourcing, market analysis and research, marketing and sales to distribution and logistics and after-sales services. Auric Pacific also operates as Market Expansion Services provider of fast moving consumer goods in Singapore and Malaysia. Auric's product portfolio includes more than 150 brands. The company also serves the food service channel for hotels, restaurants and cafés and owns two consumer brands (SCS and Buttercup) including production. With around 420 specialists, the Market Expansion Services provider distributes products to some 4,400 customers in Singapore and Malaysia.
The consumer goods distribution business of Auric Pacific generates net sales of around USD 185 million with an operating profit (EBIT) of approximately USD 14 million. The acquisition is supposed to create enhanced scale and synergies and DKSH expects the acquisition to be immediately earnings accretive. The existing management team of the business and employees will join DKSH and will be part of DKSH's Business Unit Consumer Goods.
(Source: The Edge; News Beezer)
Malaysian retailers of all categories are fast embracing cashless transactions at their outlets, with convenient stores being the latest to join the bandwagon. For instance, Shell Malaysia opened its first unmanned convenient store at Shell Select Jalan Tun Razak, Kuala Lumpur which provides services for 24/7 to patrons, in October 2018.
The patrons visiting the store can just put items they have picked up from the shelves on the store counter, which is able to automatically calculate the prices of the items. Payments can be made using debit or credit cards, as well as China-based BingoBox’s mobile app. BingoBox has been working on a joint venture with a local company ,Scientific Retail, to provide its services in the country. By providing unmanned services Shell Malaysia believes it will be able to improve customer service, as site employees will now have more time to address patrons’ needs elsewhere at the said fuel station.
Another local convenience store, Twenty4 has also opened its first cashless outlet in Ipoh, Perak. Operating round-the-clock using self-service machines, customers visiting the outlet can purchase a variety of items including local and international brands of foods and personal care items and make payment using only cashless transactions. Customers have the option of paying via credit or debit cards, payWaves, Samsung Pay, Apple Pay and various other e-Wallet options.
(Sources: Inside FMCG; Retail News Asia)
LG Electronics Malaysia has announced its plans to open at least 20 more LG stores nationwide by the year 2020. The company, which has existing 27 stores in Malaysia, expects to open seven new stores by end of 2018. It is aggressively promoting the sales of its premium and innovative products, such as TVs, audio-visual home entertainment products and washing machines, and is aiming for a double-digit percentage growth in sales in Malaysia this year.
LG is leveraging on its store-in-store (SIS) concept, which allows its customers to experience its products first-hand, and interact with its products. According to the company, its most popular products in Malaysia currently are its TVs. It is positive on Malaysian consumers' acceptance on its recently launched artificial intelligence (AI) enabled appliances, thus significantly boosting sales in the next one to three years. While LG considers it will be a long journey to get Malaysian consumers to fully adopt AI enabled electronics and appliances - called LG ThinQ, it is optimistic on long-term prospects in Malaysia. It hopes to become the leader in smart life innovator in Malaysia within one to three years.
(Sources: LG; Marketing-Interactive.com; New Straits Times)
Tbacco and alcohol will be subject to a higher tax rate of 10% under Malaysia's new Sales and Service Tax (SST) regime, compared to 6% under the previous Goods and Services Tax (GST) regime. Under the new SST regime, there will be no tax imposed on value-added activities along the supply chain. The GST was imposed on each intermediary of the entire supply chain up to thelevel of the retailers.
However, the SST implementation is expected to impact consumers as they will also be charged an additional 6 per cent of service tax at the retail level. For example, they will have to pay more for food and beverages in bars and restaurants with yearly revenue above MYR 1.5 million (USD 361,320) which will be subject to SST.
The excise duty for locally produced hard liquor increased from MYR 24 per litre to MYR 60 per litre (USD 5.78 per litre to USD 14.45 per litre), effective Dec 15, 2016. The excise duty structure for beers saw an increase from MYR 7.40 per litre (USD 1.78 per litre) and 15 per cent ad valorem tax to MYR 175 per 100 per cent volume per litre (USD 42.15 per 100 per cent volume per litre), effective March 1, 2016. In response, Heineken Malaysia Bhd and Carlsberg Brewery Malaysia Bhd have announced that they are raising the prices of their products.
Other items subject to the 10 per cent sales tax under the new SST regime include chocolate malt drinks (including the three-in-one variety) and oats containing cocoa.
(Sources: The Edge Markets, The Malaysian Insight)
Siemens Malaysia and the Malaysian Investment Development Authority (MIDA) have signed a memorandum of understanding (MoU) for promoting the digitisation of the Malaysian Food and Beverage manufacturing industry.
This MoU was signed on the 19th of July, 2018 during the seminar on ‘Digital Transformation in Food & Beverage Manufacturing – Recipe for the Future 2018’, at the MIDA headquarters at KL Sentral. This is in response to the growth of opportunities in the food & beverage industry, specifically in certain high growth areas such as customised formulations required by food manufacturers, functional ingredients, natural food additives and flavouring. F&B manufacturers have to meet demands of a consistently high level of product quality, maximum plant availability, optimum resource efficiency, while offering the greatest possible flexibility in developing products for their end customers. At the same time, they are facing the challenges of a fragmented manufacturing environment with incompatible equipment by the different vendors across different generations and mismatched proprietary interfaces and standards, and aging infrastructure.
The proposed single solution of a Plant Wide Automation (PWA) concept from Siemens would offer features like a plant data interface for fast and standardized integration of machines, as well as line monitoring and controlling system to offer real-time acquisition and analysis of production relevant data for the customer to continuous supervise over the plant performance and its optimization. Additionally, the PWA will help to address significant improvements in speed, flexibility and efficiency – serving to reduce time-to-market with shorter innovation cycles to beat volatile markets, generating individualized mass production with greater transparency, as well as optimizing energy and resource efficiency.
In addition, the Optimized Packaging Line by Siemens, comprising coordinated range of hardware and software that can communicate with each other, will enable for a modern filling and packaging solution through the integration of a Totally Integrated Automation concept, encompassing the entire production line, inclusing the goods receiving area, the processing and production aspects to the finished goods warehousee.
MIDA encourages the adoption of digital solutions in the Malaysia food and beverage manufacturing sector in improving the competitiveness and capacity of the Malaysian food and beverage manufacturing market. This will in turn increase domestic investments as well as foreign investments into Malaysia in this sector.
(Sources: Malaysian Investment Development Authority; Bernama MREM; New Straits Times)
Munchy Food Industry Sdn Bhd (MFI) together with its subsidiary Munchworld Marketing has been fully acquired by CVC Capital Partners, a private equity (PE) firm headquartered in Luxembourg through its London-based CVC Asia Fund IV. MFI is a home-grown snack food manufacturer with distribution reach in over 45 countries worldwide.
Based in Johor, the southern state of West Malaysia neighboring Singapore, MFI has more than 20 years of history in producing confectioneries and biscuits with brands including Lexus, Oat Krunch and Muzic. According to data from Euromonitor International, Munchy had a market share of around 14% share of Malaysia’s USD 112 million sweet biscuit market in 2017.
The acquisition puts to end rumors of MFI being an acquisition target by another Malaysian-based special-purpose acquisition company (SPAC) Red Sena Berhad since last March. Despite the acquisition by CVC Asia Fund IV, the management team, personnel and business operation system of MFI have been fully retained. While the final value of the acquisition was not officially disclosed, a person with the knowledge on the matter revealed that CVC Asia Fund IV paid about USD 250 million for a 100% stake in MFI, which was completed on June 8. Previously, emerging Asia PE firm, Tremendous Asia Partners Group and civil servant pension fund KWAP jointly held a 30% stake in MFI, which they acquired in 2014.
CVC Capital Partners has a history of buying assets in Malaysia and Asia. It has a 24 % stake in QSR Brands (M) Holdings Sdn Bhd which operates over 750 KFC restaurants in Malaysia, Singapore, Brunei and Cambodia, and over 450 Pizza Hut restaurants in Malaysia and Singapore. It has also invested another USD 150 million in Pt. GarudaFood Putra Putri Jaya, Indonesia’s top snack-food maker in the week of June 11.
Investors have been betting on the growing demand for high-end consumer products fueled by economic growth in South East Asia. According to the Asian Development Bank, the region’s economy recorded a 5.2% growth in 2017, up from 4.7% in preceding year. The growth rate is forecasted to remain the same for 2018 and 2019.
(Sources: Bloomberg; The Star; The Edge Markets; Marketing Interactive)
Loob Holding Sdn Bhd (Loob Holding), the owner of Malaysia’s Tealive bubble tea brand has formed a joint venture (JV) with two Chinese companies to open 500 Tealive stores in China within three years.
The Malaysian company signed an agreement with Zhejiang Boduo International Trade Co Ltd (Boduo) and Shanghai Panfei International Trade Co Ltd (Panfei) on 12 June. Loob Holding will own a majority stake of 51% in the JV, while Boudo and Panfei will hold 43% and 6% of the equity respectively. The partnership will leverage Boduo's strengths in supplying raw materials, warehousing, network, and real estate, while Panfei will supply equipments.
The first Tealive outlet will be opened in Shanghai in September 2018, foolowed by more stores in other selected cities. China, the world's largest tea market, will be the fourth overseas market for the bubble tea brand, which already has a presence in Vietnam, India and Australia. Loob Holding appointed a master franchisee in India recently and is targeting 140 Tealive outlets within five years.
(Sources: The Star Online, The Sun Daily)
The Malaysian Investment Development Authority (MIDA) has signed a memorandum of understanding (MoU) with Cosmetic Valley France (CVF) for the development of a sustainable cosmetics and personal care industry in Malaysia, with a focus on the halal segment. According to a release published by Malaysia’s national news service Bernama, the decision follows recent growth and rising demand for natural and organic products developed according to the Malaysian halal system.
CVF is world-leading centre of resources in cosmetics and perfumery. It came into existence in 1994 as a professional association, the Cosmetic Valley association. In 2005, it was designated a "competitiveness cluster" and its activities expanded to three regions, Centre, Ile-de-France, and Upper Normandy. Today its activities include facilitation of contacts between perfumery cosmetics industrials, supporting research and innovation projects, supporting businesses on an international level and improving employees' qualifications.
The MoU covers sharing of information, mutual promotional initiatives and R&D efforts. Malaysian players in the industry are expected to benefit from the exchange of expertise and access to international platforms and initiatives leveraging France’s position as a leader in the cosmetic industry with a 14.8% market share and home to a host of renowned brands.
For instance, the Malaysian companies can participate in promotional platforms such as Cosmetic 360, an international event which showcases creativity and innovation in the cosmetic industry supply chain.
The initiative is to leverage the promotional platforms such as Cosmetic 360, an international event that will showcase the creativity and innovation in the cosmetic industry supply chain and facilitating business matching sessions with the local cosmetic companies. Furthermore, research and innovation among all stakeholders can be promoted through projects such as Cosmetopeia (refers to using botanical resources for cosmetic use, relying on ancestral and traditional practices and knowledge).
(Sources: Bernama, The Star Online, The Sun Daily)
According to Transparency Market Research, the halal cosmetics market in Malaysia is expected to see robust growth in the coming years due to the increasing number of Muslim population, as well as a rising demand of cosmetics and toiletries products. Growing consciousness among the consumers regarding the usage of ingredients in cosmetic products is resulting in the increasing demand for halal cosmetic products.
The Malaysian government identifies halal cosmetics as certified products by the Islamic Religious Department of Malaysia if they contain no use of animal fat, gelatin or other chemicals. According to Abdulaziz Goni, Senior Research Analyst at Islamic Finance,Malaysia is now ranked as third best developed Islamic economy for halal pharmaceuticals and cosmetics, behind Singapore (2nd) and the United Arab Emirates (1st).
The global Muslim market spending on personal care and cosmetics amounted to USD 57 billion in 2016 and is expected to increase to USD 82 billion by 2022.
Some of the key global players in the halal cosmetics industry include Darling MMA Bio Lab Sdn Bhd, Ivy Beauty Corporation Sdn Bhd, Talent Cosmetic Co., Limited, The Halal Cosmetics Company, PHB Ethical Beauty, Sampure Minerals Amara Cosmetics Inc., Inika, Maratha Tilaar Group, Clara International, Saaf Skin Care, Prolab Cosmetics, IBA Halal Care, NUTRALab, Zelcos, Nozona Corporation and Croda, among others.
(Source: Transparency Market Research; Halal Focus)
Local cashless grab-and-go convenience store Funmaii has recently launched its second outlet at Bandar Puteri, Puchong, in a bid to become a major player in the cashless retail ecosystem. Funmaii-branded stores offer daily necessities coupled with the convenience of electronic payment, allowing consumers to make payment via the Funmaii e-wallet app service or by credit card. The Funmaii e-wallet app service also allows consumers to track their expenses and redeem rewards in the form of discount vouchers, extra credit and rebates.
The Funmaii stores sell imported snack food and beverages from Japan, Korea, Taiwan, and Thailand, as well as local food products. The company plans to have three types of Funmaii stores to cater to its diverse audience: Basic, Signature and Concept. The Basic stores will be cashless convenience stores with themed interiors and small seating areas, while Signature stores will have bigger chill-out areas for mini celebrations and events. Concept stores, on the other hand, will feature an array of services such as dessert bars, coffee bars, and more. The Funmaii Concept stores will be launched in partnership with various brands.
Funmaii is planning to open around 30 outlets over the next 12 months, with a target of 100 outlets by 2019. Additionally, the company plans to install 10,000 vending machines in major shopping malls throughout Malaysia in the next three years. It is also looking to grow its network of Funmaii-branded stores and kiosks in South East Asia, expanding into countries such as Singapore and Indonesia.
(Sources: Funmaii; Marketing Interactive)
Airports managed by Malaysia Airports Holdings (MAHB) nationwide saw a traveller spend of approximately MYR 1 billion (USD 255.6 million) on fashion, food and apparel in 2017. According to the Datuk Badlisham Ghazali, the Managing Director of MAHB, some retail outlets at the airports managed by MAHB reported an increase in sales by 24% last year compared to 2016. MAHB also notes that passenger traffic at its 39 airports in 2017 increased to 96.54 million from 88.98 million in 2016. Of the total, international passengers came in at 49.4 million while domestic passengers came in at 47.14 million. MAHB is planning to continue its efforts to promote various events as well as Malaysian food at the airports by cooperating with different entities to entice passenger spend.
(Sources: New Straits Times; Marketing Interactive; The Borneo Post)
OldTown Berhad, Malaysia’s coffee manufacturer and café operator, has received a notice of takeover offer worth MYR 1.47 billion (USD 369.7 million) from Dutch beverage company Jacobs Douwe Egberts BV (JDE). The offer has OldTown’s share valued at MYR 3.18 (USD 0.8) per unit, with majority of analysts viewed the offer as favorable for the home grown café chain. OldTown is not expected to decide on the offer until all the pre-conditions of the deal are met before or by August 2018.
The proposed takeover signifies the interest of European companies to enter the multibillion beverage and cafe industry in South East Asia. In June 2017, JDE acquired Singapore-listed Super Group Ltd, a pan-Asian instant F&B brand with a stronghold in the FMCG sector for USD 1.05 billion. Coffee drinking has been huge in Malaysia with Malaysians drinking an average of 3.9 kg of coffee per capita per year.
Halal-certified OldTown owns 189 franchise outlets in Malaysia. It operates another nine in Singapore and three in China. Affin Hwang Investment Bank Berhad asserted that the company’s F&B business has been slowing down over the last three years, with only its FMCG segment remains growing fast and has been the main motivation for JDE to take over the company. OldTown markets its products in 17 countries across Asia and North America.
(Sources: The Malaysian Reserve; The Star; The Edge Markets)
S P Setia Bhd the property development company has disclosed a joint urban grocery experience to be called the Bangsar Market by Jaya Grocery and which has been scheduled for operation by first quarter of 2018. According to S P Setia, this will be the biggest grocery market in the city once it starts operations. Bangsar Market will be located at Level 2 and utilizes the entire floor of 54,000 sq ft which will a 5 stories mall and offers 250,000 sq ft of the retail space. The 25-acre KL Eco City, designed by the well-known architectural company Jerde International, will be one of the biggest mixed commercial and residential areas in Malaysia.
The ideology of the urban grocery shopping definitely represents the transformation from traditional market into one that provides the capacity to cater the modern needs of Malaysian customers. Camden Market and Borough Market in London and the Queen Victoria Market in Melbourne are the inspiration for its concept.
(Sources: The Edge Markets; The Star Online)
High-end Japanese departmental store Seibu will open in Kuala Lumpur in 2019, following its entry into other South East Asian countries, such as Singapore and Indonesia. Seibu will open a four-storey store in Tun Razak Exchange, a 28.3ha development in the heart of Kuala Lumpur, and will target high-income clientele at the financial hub. The Malaysian store will offer items ranging from food to clothing and will be run by Malaysian retailer Sogo (KL) Department Store. It will be run by Malaysian retailer Sogo (K.L.) Department Store, which has operated a Sogo shop in the city since 1994, mainly catering to the middle class. The company does not share financial ties with Sogo & Seibu; it pays loyalties to the Japanese company for the use of the department store brands.
(Source: Nikkei Asian Review)
Thai business tycoon, Charoen Sirivadhanabhakdi, is seeking acquisition of the KFC franchise in Malaysia. The owner of Malaysia largest beverage and distilleries company, Thai Beverage (ThaiBev) is in talks to pursue the acquisition. Sirivadhanabhakdi is in the final process of acquiring the franchise of the same fast food brand in Thailand, which is scheduled to be taken over formally by end-2017, and has considered expanding its franchise coverage by also obtaining the Malaysian franchise of KFC, which is presently owned by QSR Brands (M) Holdings Sdn Bhd. The latter also owns two other popular Malaysian food franchise - Pizza Hut and Ayamas.
Apart from the Thai and Malaysian fast food franchise acquisitions, the Thai business mogul has also acquired Fraser and Neave, a Singaporean beverage company.
(Sources: The Star Online; The Malaysian Insight)
AT Kearney's 2017 Global Retail Development Index (GRDI) has placed Malaysia in third position for retail investment worldwide, behind China and India. Growth in the retail sector is driven by an influx of tourists, higher disposable income and government investments in infrastructure. Long-term prospects of the sector continue to remain strong, as foreign retailers are showing increased interest in this market, in both traditional and online channels. For example, Japanese retailer Aeon which is set to triple its number of stores in Malaysia to 150 within the next three years, while Ikea is planning to launch an e-commerce store in Malaysia and Alibaba has plans to set up its regional distribution hub in Kuala Lumpur (which will be a boost for Malaysia's SMEs to sell online with transactions fulfilled through Alibaba).
It is expected that retail sales will remain strong, supported by (1) tourism; (2) government investments; (3) better consumer sentiments; (4) online sales where many international retailers operate apart from shops; and (5) increased adoption of mobile wallets.
(Sources: AT Kearney; Ambank; Borneopost Online; The Star)
The Department of Islamic Development Malaysia (Jakim) and Serunai Commerce Sdn Bhd have developed a mobile app called “Verify Halal” that is designed to allow consumers and suppliers to instantly verify the halal status of a product by scanning the barcode using smartphones. The application allows consumers to verify halal products by product name, brand, company, and country, and allows all the processes and ingredients used in making them to be traced.
While the app can help Muslims verify the halal integrity of food products when travelling overseas, another interesting application is that it also encourages businesses that provide halal products to adopt barcode systems, which will help them in their bid to penetrate the international markets such as Europe.
Foreign companies manufacturing halal products and targetting the Malaysian market can also benefit from the app. Global snacking powerhouse Mondelez International has come on board to be part of the Verify Halal app, a move that the company hopes will help it gain share in the Malaysian market.
(Sources: New Straits Times; Serunai)
Guardian Health and Beauty, one of Malaysia’s leading pharmacy, health and beauty retailer, has shown confidence in the growth of its e-store division this year, with this year’s sales projected to rise more than 50% thanks to the online shopping habits among the millennials. The online store, launched in 2014, offers thousands of products ranging from health supplements, beauty products, skin care to general merchandise. According to Guardian Malaysia, its revenues had risen in tandem with the country’s gross domestic product growth. Since 2016, it has been serving an average of three million customers per month, and employed around 3,300 Malaysians. The company has 421 Guardian stores in Malaysia nationwide, with several new ones to open by year-end.
(Source: MJN e-news)
Red Wing Shoe Company announced on Tuesday the grand opening of its first retail location in Kuala Lumpur. The store opening expands the footwear company’s retail footprint in South East Asia. The new store is a result of Red Wing’s partnership with Leeden National Oxygen (Leeden NOX), a distributor partner for over four decades. Prior to opening the new store in Kuala Lumpur, the two companies opened stores in Singapore.
The Kuala Lumpur store, which is located in the Avenue K Shopping Mall, features an industrial work-themed interior with leather chairs, brick walls, and custom fixtures. In addition to offering the brand’s full product offering, including its namesake line, Vasque, the performance hiking boots and shoes collection, the Heritage collection that launched in 2008 and personal protective equipment and accessories, Red Wing Kuala Lumpur offers foot-scanning technology that identifies arch type, foot type and pressure points.
(Source: Retail News Asia)
7-Eleven Malaysia Bhd is the first retailer in Malaysia to accept the Alipay mobile wallet payment, and looks to attract more Chinese tourists to shop at the convenience store chain. 7-Eleven began accepting Alipay from May 2017, with 94% of the 2,100 stores nationwide going online with the system.
The event was launched by Tan Sri Vincent Tan, the founder of Berjaya Corp and majority shareholder of 7-Eleven Malaysia. According to the 7-eleven management, installing the system did not require a huge capital outlay as it can operate with the existing MOL terminal, made possible by 7-Eleven's strategic partnership with MOL Global Inc, a leading technology provider for in-store payment services.
Chinese tourists ware already familiar with the payment system's mechanism and Alipay allows them to connect with retailers here with information on what was being sold, store promotions and locations.
MOL will be an important partner for Alipay to recruit merchants both within and outside the Berjaya Group to widen the payment gateway's acceptance here. Berjaya Corp is a leading consumer group, with over 5,000 outlets nationwide and also including Starbucks, Wendy's, Kenny Rogers, Radioshack and Krispy Kreme.
(Source: Reuters, Bernama)
Luxury Parisian couture brand Yves Saint Laurent Beaute is preparing to open its doors in May this year to its Malaysian market with a standalone flagship boutique in Pavilion KL. Spanning over 1057 sq ft, with glossy sleek black panelling and the signature YSL gold embellishment, the modern and opulent new store will be the brand’s biggest boutique in Asia. The store will be featuiring their makeup, skincare and fragrances. It will also offer a first of its kind in Asia, a Gifting & Engraving station where customers will be able to engrave their name on your YSL Beauté products, for a personal touch.
According to Euromonitor International, luxury goods in Malaysia remained highly fragmented in 2015. International luxury houses such as LVMH, Prada, Kering, PVH, Luxottica and Burberry led the industry through offering brands like Louis Vuitton, Gucci, Prada, Calvin Klein, Burberry and Emporio Armani. Various luxury players in Malaysia in 2016 teamed up with non-luxury brands due to the slowing economic environment and consumers’ weakening purchasing power.
(Sources: Female, Euromonitor International)
Chinese e-commerce giant Alibaba Group Holding Limited plans to set up a regional distribution hub in Malaysia to cater to its fast-growing business in the region, two sources aware of the discussions said. The hub would be sited within KLIA Aeropolis, a 24,700-acre development led by airport operator Malaysia Airports Holdings Bhd (MAHB) that is expected to generate more than USD 1.5 billion worth of domestic and foreign investments. The hub will be set up with the help of Malaysian state-linked agencies. This would mark Alibaba's first investment in Malaysia. The company invested USD 1 billion last year to control Singapore-based e-commerce platform Lazada, South East Asia's largest online shopping platform. It also increased its shareholding in Singapore Post to 14.5% from the 10.5% acquired in 2014 and bought a 22% stake in Thai e-payment service, Ascend Money.
(Sources: Reuters, ET Retails)
Coach, Inc. a leading New York design house of modern luxury accessories and lifestyle brands, has announced the opening of its new Malaysian flagship in Kuala Lumpur. The store, which launched in January 2017, at new retail landmark Pavilion Elite, showcases the brand’s distinctive modern luxury concept and will be the largest Coach store in South East Asia. The new store includes a Craftsmanship Bar offering leather care, cleaning and monogramming available exclusively for Coach customers. The store is also fully equipped with a ready-to-wear fitting room and will carry a wide assortment of Coach merchandise for women and men, including handbags, small leather goods, footwear, scarves and jewelry, as well as the Coach 1941 ready-to-wear collection.
Samsung Malaysia has this month launched its first ever Samsung Experience Store (SES) in Genting Highlands at the Sky Avenue mall. The expansion is a step closer to achieving Samsung’s vision of providing products and service catering to local consumers. The SES retails a wide range of the Samsung Galaxy mobile phones as well as the brand’s variety of innovative wearables. The SES aims to serve as a one-stop shop for all Samsung customers by providing customer satisfaction with the best products and services. The opening of the SES is another step forward in the company's expansion plans to different regions of Malaysia. Its aim is to continuously expand our channel coverage providing consumers a revolutionary digital convergence experience. With this expansion to Genting Highlands, it is looking to bring its innovations closer to local Malaysians as well as to tourists.
(Source: Samsung Malaysia)
McDonald’s Corp has sold its franchise rights for its restaurants in Malaysia and Singapore to Lionhorn Pte Ltd from Saudi Arabia in its move to retreat from direct ownership in Asia. This involves an ownership transfer of 390 restaurants in the two countries, of which 80% were owned by the company. Lionhorn is readily a franchisee of nearly 100 McDonald’s restaurants in the western and southern region of Saudi Arabia. The move is part of McDonald’s plan to turn to a less capital-intensive franchise model in Asia by bringing in partners from the region. It has franchised about 1,300 outlets in its effort to become 95% franchised by the end of 2018.
(Source: The Star)
According to the Retail Group Malaysia (RGM), the retail sector in Malaysia recorded a 1.9% growth for the period of July to September 2016, much lower than 5.9% expected by the retailers in August. The previous quarter recorded a growth of 7.5% for the period of April to June, which is a rebound from -4.4% recorded for January to March. For the period between January and September 2016 the retail sales recorded a slow 1.6% growth.
The worst performing sub-sector was departmental store cum supermarket, which recorded a decline of 1.5% from the same period of last year. The department store sector also recorded a declining sales of 6.3% on-year, while supermarket and hypermarket recorded a growth of 0.7%. The best performing retail sub-sector for the period assessed was pharmacy and personal care with 10.2% growth rate compared to a year before. Fashion and fashion accessories on the other hand also recorded a strong growth rate of 7.6% within the same period. Other retail sub-sectors which include sporting goods stores, optical shops, photo shops, children-related stores and restaurants expected their businesses to be in black in the incoming few months to come.
The retail sector in Malaysia is still reeling from the impact of the Goods and Services Tax (GST) implemented in April 2015 which resulted in price-sensitive Malaysian consumers becoming reluctant to spend as much as they used to. On the basis of the poor performance displayed in Q3, the RGM has revised its forecast of the Malaysian retail industry’s sales growth rate downwards, from 3.5% to 3% for the entire 2016. Total retail sales value for 2016 is estimated at MYR 99.1 billion (USD 23.09 billion).
(Source: The Star)
E-commerce in Malaysia is developing well with its growth rate currently reported to be 10.8%. By 2020 the growth rate is expected to double to 20.8% with GDP contribution amounting to MYR 211 billion (USD 49.16 billion). The contribution by digital economy to GDP is measured at 17.8%, with e-commerce contributing 5.8% of the share. The Malaysian Ministry of International Trade and Industry is confident that the target is reachable with the measures outlined in the National eCommerce Strategic Roadmap involving planned interventions in six thrust areas; to accelerate adoption of e-commerce by sellers; to increase the adoption of e-procurement by businesses; to lift non-tariff barriers; to realign existing economic incentives; to make strategic investments in selected e-commerce players, and; to promote national brand to boost cross border e-commerce. There are also eleven programs defined in the roadmap supported by various other ministries and agencies.
As the government believes that the e-commerce sector is an important sub-set of the digital economy masterplan, the National e-Commerce Council (NeCC) has been set up as an avenue to bring the government and private sector together to discuss the agenda for e-Commerce sector. In the past meetings the NeCC has discussed about regulations, end-to-end solutions, and ease of doing business in e-commerce landscape. There is a possibility that monetary incentives will be in place to facilitate the growth of e-commerce in the country in the future.
(Source: The Edge Financial Daily)
Pos Malaysia Berhad, the country’s largest postal company, is keen to work directly with Alibaba Group in its effort to sidestep the middlemen when delivering goods sold on e-commerce platforms. According to Pos Malaysia, marketplace owners want to deal with logistic players directly, hence it welcomes the opportunity to work with Alibaba in this area. The company is seeing a 40% surge in profit driven by increasing parcel deliveries for online shopping in the fiscal Q1 and expects that the full-year earnings will be higher than recorded last year. Logistic services for e-commerce is the next focus for the company in growing its business.
Pos Malaysia is one of the top performers among 14 global couriers stocks which carry a market value of at least USD 500 million. With a total return of 49%, Pos Malaysia is performing better than United Parcel Services Inc. (UPS) and FedEx Corp. The company is valued at 25 times its 12-month projected earnings compared to 18 of UPS, the world’s most valuable courier company. It has just completed the purchase of KL Airport Services Sdn Bhd from DRB-Hicom Bhd, enabling the courier to extend its services beyond the shore. With two aircrafts, KL Airport is capable of picking up cargo from across the region including Hong Kong. In line with its projected business growth, it iexpects to expand the fleet by one plane per year in the next five years.
(Source: The Star)
The Malaysia Retail Chain Association (MRCA) has recently asked the government to freeze issuing new licence for shopping malls on the grounds that there is oversupply of retail space in the country. MRCA is an association of over 300 retailers in Malaysia with over 20,000 outlets and employs over 100,000 workers across Malaysia. According to MRCA, the number of shopping malls is expected to increase in 2017 and 2018, leading to an addition of over 50% of shopping mall space once the new ones are completed. The increase will likely lead to restraining retailers’ margins who are already battling the weakened ringgit due to their over-reliance on imported goods and the slowing economy. Citing that Indonesia has already taken steps to freeze shopping malls development in the country, MRCA has also called for the government to take action to stimulate the tourism industry to help boost sales in shopping malls.
(Sources: Bernama; The Straits Times)