Malaysia’s retail industry may grow by 6% this year

Malaysia’s retail industry is expected to grow by 5.9% in the third quarter of this year, boosted by the timing of the Hari Raya holidays, according to Retail Group Malaysia (RGM) in the latest Malaysia Retail Industry Report. (

RGM said the projected growth would also be spurred by the Minimum Wages Order 2016 that was implemented on July 1. “For civil servants in Malaysia, the minimum wage increased to RM1,200 per month. This has raised the average purchasing power of the Malaysian working population to some extent,” RGM said.

It added that the Pokemon Go app launched in Malaysia this month had also attracted more visitors to shopping centres and retail outlets throughout the country. “Nevertheless, it is not expected to contribute significantly to retail sales. Food and beverage outlets and grocery stores located near to Pokestops will benefit the most from this craze.” Mall operator Sunway Malls, in a recent statement, said Pokemon Go had resulted in a surge in traffic and sales numbers at its shopping centres locally. 

“To date, we have seen traffic increase by an average of 10% for Sunway Pyramid (pic), 8% for Sunway Giza, 6% for Sunway Putra Mall, and 4% for Sunway Carnival Mall,” said Sunway Malls chief operating officer Kevin Tan. “It is widely known that malls in general have high traffic during the festive period and school holidays, but the introduction of Pokémon Go has certainly spiked up the footfall for the non-peak season.”

Meanwhile, RGM said retailers in the fashion and fashion accessories sector expected their business to slow down again, with a positive growth of only 0.2% during the third quarter of this year. “Retailers in the pharmacy and personal care sub-sector are expecting to maintain their recovery with a growth of 11.4% during the third quarter of 2016.” MIDF Research, in a report earlier this month, said it was optimistic that the launch of the new Perodua Bezza and Proton’s new batch of models, combined with the launching of new smart devices, will boost retail sales in the second half of 2016.

Moving forward, RGM said the Malaysian retail industry’s fourth-quarter growth rate estimate remained at 5.5%, taking into consideration the growth of 1.3% achieved during the same period a year ago. “The projected retail sales growth rate of Malaysia’s retail industry in 2016 by RGM stays at 3.5% or RM99.5bil in values.” The Malaysian retail industry reported a lower-than-expected growth rate of 7.5% in the second quarter of this year compared with the same period last year.