Market Trends of Malaysia Retail Sector
This section covers the major market trends shaping the Malaysia Retail Market according to our research experts:
Food and Beverages Segment has been Contributing a Major Share to the Market Revenue
Malaysia's most significant F&B exports are in the oils and fats category, particularly palm oil-based products, for which the country is one of the largest exporters in the world. The country is also heavily dependent on imports of many staples, including rice, most meat, and seafood, for domestic consumption. The Malaysian food industry is as diverse as the cultures in Malaysia, with a wide range of processed food as per the Asian taste. This industry is predominantly Malaysian-owned, dominated by small and medium-scale companies (SMEs). Besides the SMEs, there are notable foreign companies and MNCs producing processed food products in Malaysia. Despite the challenges due to the ongoing pandemic, the segment recorded growth in transactions due to its contact demand, and the players expanded their online distribution to cope with the demand.
Revenues from Physical Retail Distribution Channels Dropped During 2020 Due to COVID-19
Owing to the lockdown measures and physical distancing norms, the physical retailing in Malaysia contracted largely and recorded a drop in revenue quarter by quarter in 2020. Physical retailing recorded a sudden dip during the late first quarter of 2020. The Malaysian retail sector recorded the largest dip in sales during the second quarter of 2020, with a negative growth rate of 30.9% in retail sales when compared to the same period in 2019. Retail Group Malaysia (RGM) announced several retail outlets have been facing severe revenue drop, which led to the closure of the stores. As of March 2021, the closure of around 15% stores of the total retail stores nationwide. However, the online channel of distribution is strengthening in the country. The dip in various forms of physical retailing, including hypermarkets, supermarkets, convenience stores, specialty stores, franchise, branded, and multi-brand stores, is restricting the market to record growth in revenue transactions.
