Friday October 12, 2007


Economist: More operators good for hypermarket sector

By CHAN CHING THUT

PETALING JAYA: The entry of more foreign-based hypermarket operators into Malaysia will increase competition and benefit certain sectors.

“With competition, prices of goods can be brought down to a reasonable level. The Government is also indirectly helping the small and medium-scale enterprises by requesting hypermarkets to carry their products,” OSK Research economist Sia Ket Ee told StarBiz.

Domestic Trade and Consumer Affairs Minister Datuk Mohd Shafie Apdal said yesterday that US-based Wal-Mart Stores Inc and Germany's Metro AG had applied to open stores in the country and that the Government was still vetting the applications.

The ban on new foreign hypermarkets establishing a presence in Malaysia was lifted in May, with the ministry issuing permits on a case-by-case basis.

The reversal of the Government's decision was beneficial, Sia said.

An immediate concern was the survival of traditional retail outlets, such as sundry shops.

”I don't think it will change the situation if you add another one or two (hypermarket operators). It is also the current trend and in line with the changing lifestyle that people prefer to shop in a more comfortable environment,” he added.

In April 2002, former Domestic Trade and Consumer Affairs Minister Tan Sri Muhyiddin Yassin banned the setting up of new foreign hypermarkets and imposed restrictions on store sizes, opening hours and locations for those already operating in Malaysia to protect local retailers.

Quoting the ministry, Bloomberg said more than RM1.6bil was invested in the country's retail and wholesale industry last year. Hypermarket chains now operating in Malaysia are Carrefour, Tesco and Giant.

On whether Malaysia could accommodate more foreign players, Sia said the domestic market was not as big as those in other countries but the economy was slowly becoming more consumption driven.

“Asia is still the fastest growing region. If hypermarket groups want exposure to the fastest growing market, they will have to come to Asia, including Malaysia. Otherwise, they will lose out,” he added.

A growing middle-class and a new generation with higher propensity to consume was also an attractive proposition for new players to come to Malaysia.

Sia said such liberalisation by the Government would also draw foreign direct investments but the amount of inflows might not be as large as for projects in the manufacturing sector.

“The services sector is not capital intensive. However, it creates more job opportunities and also helps link the supply chain,” he said.

US retail giant Wal-Mart eyeing Malaysia: official

KUALA LUMPUR (AFP) - The US retail giant Wal-Mart is keen to open stores in Malaysia, a junior minister said Friday, amid a government drive to lure investment and boost economic growth.

"Wal-Mart has shown interest," deputy trade minister S. Veerasingam told AFP, but he declined to elaborate further amid reports the company had formally applied to enter the Malaysian market.

He added that German company Metro, one of Europe's largest retailers, had applied for permission to set up operations.

Another official said the entry of foreign retail giants would create jobs. "It will not only provide more jobs locally but will make the retail market more competitive besides injecting foreign investments in the country," consumer affairs minister Shafie Apdal told the New Straits Times.

He said foreign retailers were keen to invest in Malaysia due to the strong purchasing power of local consumers.

Malaysia has restricted the entry and expansion of supermarkets over recent years to protect smaller local businesses.


But major foreign retailers including France's Carrefour, Britain's Tesco, Japan's Isetan and IKEA of Sweden already operate in the country.

Malaysia, with a population of 27 million, expects to post strong economic growth of 6.0 percent this year, after its economy expanded by 5.9 percent in 2006.

It is Southeast Asia's third largest economy but has seen foreign direct investment steadily declining. In 2006 it amounted to an estimated 3.9 billion dollars, compared to 5.5 billion dollars in 2001.

Good. Looking forward to see nice looking home accessories like the ones at walmart US. If wal-mart pada nama only but stuffs like carrefour and tesco malaysia only..sigh..

Wal-Mart, Germany's Metro to enter Malaysia-paper
Fri Oct 12, 2007 2:22 AM BST
Reuters (http://investing.reuters.co.uk/news/articleinvesting.aspx?type=allBreakingNews&storyID=2007-10-12T012239Z_01_KLR208222_RTRIDST_0_MALAYSIA-WALMART.XML)


KUALA LUMPUR, Oct 12 (Reuters) - The world's largest retailer Wal-Mart Stores Inc and German retailer Metro have applied for state approval to open stores in Malaysia, the Edge Daily said on Friday, citing Domestic Trade Minister Shafie Apdal.

However, both Wal-Mart and Metro will have to "comply with local procedures in regard to the retail industry," Shafie was quoted as saying. Neither retailer would be allowed to open new stores at their discretion, he was quoted as saying.

The paper did not provide any further details.

Shafie said in May that Malaysia had lifted the ban on foreign retailers and they were now welcome to set up shop in the country, the Edge reported.

In March, local press said that Tesco Plc, Britain's biggest retailer, will invest almost 650 million ringgit ($185 million) and hire 3,200 people to expand its Malaysian business.

Tesco will open 12 new stores, bringing to a total of 23 the number of Tesco stores it has in Malaysia, he was reported as saying. Tesco Malaysia is 30 percent-owned by state-controlled local conglomerate Sime Darby Bhd.

13-11-2007: Wal-Mart may not be coming to Malaysia
by Lee Yu Tang
Email us your feedback at fd@bizedge.com


SERI KEMBANGAN: It looks like the US-based Wal-Mart Stores Inc, which was initially reported as planning to set up operations in Malaysia, may not be coming soon since there was no such application from the world’s largest retailer in the first place.

Speaking to reporters here yesterday after officiating the 2007-2008 Fair Price Shop Awards, Domestic Trade and Consumer Affairs Minister Datuk Mohd Shafie Apdal claimed that Wal-Mart had indicated some interest but the government had not received any application from the company to set up operations in Malaysia.

Shafie said his ministry encouraged hypermarkets to be set up but retailers needed to adhere to certain guidelines.

“To a certain extent, we need to protect our local businesses but of course, we do encourage investments from abroad. That is why we are laying out the guidelines,” he said, adding that the government only encouraged foreign retailers to set up stores in urban areas.

Among the guidelines are a population of at least 360,000 in a residential area for the setting up of a hypermarket store in Malaysia.

On the status of German-based Metro AG, which had also bid for Makro last year, he said: “Initially they were quite keen to bid for Makro but unfortunately, they could not get the right price.”

Makro was eventually acquired by Tesco Stores Malaysia Sdn Bhd at the end of last year. Metro was another company reported to be keen to operate in Malaysia.

Industry observers have pointed out that foreign investors would be thinking twice before starting a retail business in Malaysia due to certain restrictive guidelines that can affect their business development.

Asked about the impact from the current high crude oil prices on the prices of controlled items in the country, Shafie said the chain reaction on these items resulting from the fuel increases was enormous.

He said the government would engage the private sector to contain the price increases, and that his ministry would take serious action against businesses and traders who raised their prices excessively.

“We have informed them that there should be a reasonable adjustment to prices, particularly for imported goods with the increasing cost of raw materials,” he said.

Good. Looking forward to see nice looking home accessories like the ones at walmart US. If wal-mart pada nama only but stuffs like carrefour and tesco malaysia only..sigh..

Sorry to burst yer bubble there baq, Walmart has *no* nice looking home accessories :o (perhaps it did in the past). The States has a 'new WalMart' called Target. Much better quality goods, almost as cheap prices and more fairer wage policies for their employees.

good..at least

so when will these stores going to open??

i prefer target over wall mart.. wall mart is like big w here in aus..

I prefer Target too. They even carry lines by Isaac Mizrahi and Sarah Jessica Parker, not bad, huh? :lol:

^^ hehehe.. i go there to buy my undies and pyjamis! hav cheap dvdz and electronics thou! :cool:

whatever they are, if they are willing to market our local SME product, they are much welcome..