MALAYSIAN malls are investing in mixed-use spaces and visitor experiences, amid a retail slump and a turn to e-commerce, according to a review of Kuala Lumpur’s shopping scene.
Anticipating that the market will stay cautious on growing supply, analysts from real estate consultancy Nawawi Tie Leung said: “Retailers will be selective and shopping mall developers will have to work harder to create unique products.”
The retail industry has jumped on the online-to-offline (O2O) commerce bandwagon, such as the opening of an Alibaba-backed Taobao Store at MyTown Shopping Centre and JDX Presto Concept Store, which taps Chinese e-tail giant JD.com, at Quill City Mall, the report noted.
That’s even as bricks-and-mortar casualties included the Parkson department store at MyTown Shopping Centre, and the Cold Storage supermarket branch at Jaya Shopping Centre.
After all, Malaysia’s e-commerce market has been tipped to grow by 16 per cent a year to hit US$11.2 billion in value in 2023, according to industry analytics firm GlobalData.
GlobalData banking and payments senior analyst Sowmya Kulkarni attributed the growth to a rise in the population that shops online, as well as the government’s National eCommerce Strategic Roadmap, is promoting e-commerce to small and medium-sized enterprises.
Citing the expansion of co-working spaces such as WeWork at Mercu 2 in KL EcoCity, Spaces at Menara Prestige, and the entry of Vietnam’s UpGen into the Kuala Lumpur office market, the Nawawi Tie Leung report noted that “malls have turned into multi-functional mixed-use spaces”.
Still, the report added more dourly: “The integration, however, is more of a reaction after retail spaces have remained vacant for a long time.”
Another risk to the retail outlook is the global spread of the Wuhan virus: United Overseas Bank economists Julia Goh and Jasrine Loke warned on Jan 31 that the outbreak could take up to one percentage point Malaysia’s growth in 2020 if tourism revenue falls over two quarters, since Chinese visitors made up nearly 15 per cent of Malaysia’s tourism receipts in 2018.