BY LEE YAN LI
Tan advises newcomers to invest in both online and brick-and-mortar business.
It might be easy for startups to enter the retail industry in Malaysia, but it doesn’t mean newcomers can just dive in without a second thought.
The relatively low cost of rent, labour and renovation have made it easy for anyone to set up a retail business either physically or online, with costs ranging from RM1,000 to RM250,000, said Henry Butcher Malaysia managing director Tan Hai Hsin.
The presence of large players and the competitive market should not deter small retailers and start-ups as many success stories have emerged even during this economic slowdown.
Instead, the main challenges are weak consumer spending and a lack of understanding of the retail business.
“As the investment cost is not as high as starting a trading or manufacturing company, many just set up their new ‘baby’ without detailed research,” said Tan.
Most startups see the glamorous side of owning a retail business but fail to notice the high failure rate in this industry.
They forgot they need to commit a large amount of time and multi-task the roles of cashier, receptionist, accountant, salesperson, manager, cleaner, delivery boy, waiter, cook and many more.
He noted that the traditional brick-and-mortar element is still relevant despite online shopping being all the rage.
As such, he advised newcomers to invest in both to ensure maximum success.
Tan shared that online shopping transactions accounted for less than 2% of total retail sales in Malaysia and would not replace physical stores in the near future.
According to the Malaysia Retail Industry Report by Retail Group Malaysia, the goods and services tax (GST) has affected all retail sub-sectors since its introduction, and consumer spending has yet to recover to pre-GST level.
Despite the economic uncertainty for the last two years, the food and beverage business has been booming.
The rapid growth of coffee as well as bakery cafes, fine-dining restaurants, overseas chain restaurants and food trucks has proven that urban Malaysians are willing to spend on good food in a nice dining ambience despite the increasing cost of living.
Over the past three years, there has been an explosion of independent coffee cafes.
New coffee cafes are being opened almost every week in the Klang Valley, with new trends emerging in Penang, Johor Baru, Ipoh, Malacca, Kuantan, Kota Kinabalu and Kuching.
Tan will be sharing more insights at the StarProperty.my Fair 2016 i-City edition at i-City from April 22 to 24, from 11am to 9pm.
The fair will be presenting projects including i-Soho, i-Suite, Liberty Tower and Parisien Tower in i-City, and 8Kia Peng in Kuala Lumpur city centre.
Besides talks and fun activities, 1,000 visitors will receive complimentary theme park tickets daily.
Purchasers of Hyde Tower, Parisien Tower and Liberty Tower will stand a chance to win two return air tickets to London, Paris and New York respectively.
Participating global partners include Al-Rajhi Banking Group, Central Pattana Group Thailand, and Rozel, Hilton and Best Western.
For details, visit starproperty.my/icityedition.
