Reimagine The Modern Retail Experience in Malaysia
As technology rapidly advances throughout the decade, people invest most of their time in novel technology. Starting from the retail and financial industries, dating back to 1950, when Ralph Schneider and Frank McNamara extended the use of an air travel card. American Express soon followed and entered this market to create a worldwide credit card network in 1958. It successfully disrupted the retail industry and forced retailers to implement payment systems soon rather than later.
A robust, quick, and highly-secured payment is the answer to untapped retail potential worldwide. According to the research by Global Data in the Malaysian market, There were an estimated MYR$156.8 billion credit card purchase transactions in 2020, meaning that roughly MYR$429.6 million transactions daily occur. (Figure 1).
Figure 1: Credit Cards Transactions in Malaysia. (Source: Global Data)
The expansion of eCommerce, penetration rate at 89%, and the emergence of new retail models have depended heavily on credit card and other fintech transactions over the past couple of decades. As the internet became more accessible and hardware became cheaper and affordable to people, retailers were trying to exploit the untapped potential. (Figure 2). The evolution of eCommerce displayed the highly-competitiveness of this industry to adapt to the latest technology. eCommerce solved the site restriction issue that enabled merchants to open a store without owning one (on-site) to sell their products/services worldwide at a minimal cost.
This article examines how technology is revolutionizing the Malaysian retail sector. It is possible to comprehend the future unrealized potential by first considering how it has altered consumer behavior, market trends, and company strategies over time.
Nowadays (The rise of e-commerce):
According to a new Statista analysis, Malaysians are substituting wallets and credit cards for cash at physical establishments; as a result, the cash market share continues to fall. (Table 1). Despite this, approximately 40% of all in-store purchases use coins or paper money, making it the most common payment option at the POS. Malaysia is seen as a quickly growing market for mobile payments as it begins to catch up to other Southeast Asian countries in terms of mobile commerce. Between 2020 and 2025, experts predict the number of users of two of the most popular mobile wallets will double.
According to the study, the percentage of retail eCommerce sales is still below 30%. In 2020, the UK had one of the largest online retail buyers accounting for 27.5% market share (Figure 3). Similarly, Senwave reported that Malaysia had 22% of online retail sales in early 2020, but due to COVID-19, that number increased to 33%.
What is more, not only online but also in offline stores, merchants have started to use advanced technologies. Retailers may acquire informative data like the Hitachi Automated Shop, which combines video cameras, 3D lidar (light detection and range), IoT sensors, and analytics. As a result, it assists them in making better decisions about stock placement and facility usage, improving the consumer shopping experience, and using systems.
Additionally, merchants have started to digitize their business, like self-checkout, payment with contactless cards (Apple Pay and Fintech), and QR codes. The QR Code is one of the latest innovations to achieve automated stores. Consumers enter, scan the QR code, choose what they desire, and go outside. The store instantly added the products selected to a virtual basket and deducted the balance once clients left the store. Under the MasterCard Impact Study, Malaysia is the fastest eWallet in Southeast Asia.
Policies (Taiwan-Malaysia)
Malaysia is one of Taiwan’s essential partners when it comes to international trade in Taiwan. The total trade between Taiwan and Malaysia is about nineteen billion, three hundred and forty-two million USD. Malaysia is the second largest of our partners among ASEAN members and the seventh of Taiwan’s trade partners around the globe, with approximately 3.45% in total. The amount that Taiwan exported to Malaysia in 2020 was about nine billion, four hundred and fifty-three million, which was the eighth biggest country of all. As for the import amount, it reached nine billion eight hundred and eighty-nine million in 2020, which meant that Malaysia was the sixth biggest country that imported its products to Taiwan.
Besides the trade amount, There were 20 cases that Taiwanese people invested in Malaysia. The total investment amount was about one hundred and eighty-nine million USD. The result showed that Taiwan was ranked 13th among Malaysia’s Foreign Investments.
Taipei Mayor Wen Je Ko and the First Minister of Selangor, Dato’ Seri Mohamed Azmin Bin Ali, signed three Memorandum of understanding. City transportation, Startup innovation, and smart city industry communication are the three major topics inside the agreement. Mayor Ko also mentioned a cooperation plan between Taipei and Malaysia. The Taipei government can introduce a startup to Malaysia, and the Malaysian government can also bring one team to Taipei to start their own business. They will help finance the team that is selected to assist entrepreneurs.
Case Study
The launch of the Malaysia Select Campaign (through a Malaysia-Taiwan shopping platform), which aims to help Malaysian firms expand to Taiwan, was announced by the Malaysia Digital Economy Corporation (MDEC), Malaysia’s leading agency in the digital economy, in collaboration with EasyStore.
In line with the National eCommerce Strategic Roadmap (NESR) 2.0, which seeks to make Malaysia the largest eCommerce market in the ASEAN-6 region by 2025, public-private initiatives like this are crucial as we work to develop Malaysia as an eCommerce producer rather than just a consumer. In addition to accelerating the eCommerce development in Malaysia, our goal is to sustain jobs and a way of life.
Exabytes, EasyParcel, Janio, and the Taiwanese Commerce Development Research Institute sponsored the event, which was held from October 1 to October 10, 2021.
Moreover, this online sales campaign aims to promote at least 800 local companies in Taiwan by helping them boost sales by at least 30% and achieve considerable brand awareness.
In close collaboration with the Commerce Development Research Institute of Taiwan, MDEC and EasyStore will provide participating local internet businesses with a Kickstarter program to help them sell their products and build their brands in Taiwan.
Future (potential of retail 2.0 and other development):
In the future, we might see many new technologies to improve the retail industry. Starting from drone deliveries, which can make people get their orders faster and cheaper; until the implementation of the VR/MR/AR that we never imagined before, especially in fashion. One of the Malaysian fastest-growing retail sectors, it consistently invests in research and development to provide the best customer service. In addition, we might be seeing more futuristic convenient stores like Amazon Go and Amazon Fresh worldwide.
Amazon Go is a cashier-less, highly-automated, and cashless convenience store in the United States and the United Kingdom. Kick-off late in 2016 for its beta version only available to its employees; it opened its first store in January 2018. As of 2021, it expanded its stores and launched in 42 locations. Their success is mainly due to their futuristic concept that enables customers to walk into the store, grab products, and leave. The minimal need to enter is an Amazon account; once things are selected, they are instantly placed in a virtual shopping cart and paid for when users leave the store. They constructed it with the help of deep learning algorithms, computer vision, and sensor fusion. In short, customers do not need to wait long and waste time for the customer check-out.
