Wholesale & Retail

The EPP calls for the setting up of 61 hyperstores (i.e. stores of 5,000 square metres and larger), 163 superstores (i.e. stores of 3,000 to 5,000 square metres) and 356 supermarkets within departmental stores (i.e. supermarkets of 2,000 to 3,000 square metres) within the next 10 years. These numbers will result in 50% more floor space than that of today’s current base of 1.4 million square metres. This expansion will be implemented by both local and foreign retailers.

The development of new large format outlets will be monitored carefully by federal and local authorities to achieve a balance between modernity and convenience and the sustainability of the small retailers. Decisions shall be made on the basis of demand assessments that look into the needs, economic capability and population base of the residents against the assessment of retail space supply and the store size.

To mitigate any potential effects on small retailers, we will support the modernisation of the small retailers as a separate EPP (EPP 2 – Program Tukar).

Investments to date:

Mydin Mohamed Holdings Berhad In a bid to build a more dynamic retail market, Mydin Mohamed Holdings Bhd plans to open 14 more branches nationwide within two years. The company's immediate plan is to add 20 mini-market branches this year and another 50 by 2011 as part of the Program Transformasi Kedai Runcit (TUKAR) within the Retail NKEA. Investment: RM1 billion (USD286 million).

Selected large-format retailers will support small retailers by helping them to improve their appearance and layout, including more attractive product racks, enhanced lighting and a point-of-sales system (POS) that manages product inflows and outflows.

Further, store owners will receive retail management training in their own stores and receive on-going guidance from large retailers. We are targeting 2,000 stores for full deployment and another 5,000 for selective partial deployment to suit commercial requirements and viability.

In return, participating major retailers will benefit either from charging a consultancy fee or by developing a relationship with the small store, which could potentially lead to wholesale supply arrangements between the two parties.

Investments to date:

Small Retailer Transformation Programme (TUKAR) The transformation of small retailer shops (TUKAR) is a project which aims to modernise these shops to increase their level of competitiveness. To date, three major retail chains namely Mydin, Tesco and Carrefour have signed up to participate in the TUKAR project. Investment: RM5.43 billion or USD1.6 billion (by 2020).

We will place various markets under one roof – a Pasar Komuniti – that has proper amenities and is monitored by relevant government agencies. The Federal Agriculture Marketing Authority (FAMA) is leading the setting up of the Pasar Komuniti with regards to site identification, refurbishment, discussions with market traders, etc.

The industry will improve the standards of its members through self-regulation. The Federation of Automotive Workshop Owners Association of Malaysia (FAWOAM) and/or any equivalent party(s) will maintain a centralised database and website, categorising and grading workshops according to service levels and licensing the industry workforce (mechanics and technicians) through continuous competency development programmes. Workshops will be classified into platinum, gold and silver grades according to a set of criteria.

The EPP aims to create iconic food outlets that combine the best street hawkers at one large premium food centre supported by other established food outlets such as family restaurants, quick-service restaurants, cafes, bars and fine dining restaurants.

The food centre will also provide attractions like sensory gardens, games and events arena and playgrounds, as well as having retail outlets like convenience stores and newsagents.

Each Makan Bazaar will be approximately 9,000 square metres in size, with a seating capacity of around 3,500 people.

A total of 10 Makan Bazaar outlets will be built within the next 10 years in major cities in Malaysia. The venture will be privately managed.

The proposed projects would see the development of more than 20 shopping malls similar to Sunway Pyramid, 1 Utama, or Mid Valley Megamall at selected locations in Vietnam and China. These malls will be populated by at least 50% Malaysian retailers who are already doing business in Malaysia giving Malaysian retailers an excellent opportunity to expand their brands and capitalise on the emerging markets of Vietnam and China.

In Vietnam, we will develop five malls in Ho Chi Minh, three in Hanoi, one in Hai Pong and one in Can Tho. In China, we will develop 11 malls in cities like Harbin and Shenyang.

Potential champions (e.g. Sunway Group, KLCC Holdings Bhd, Desa Park City, SP Setia, Ireka) have expressed interest and discussions are on-going to finalise their requirements.

A local information communications technology company, Teras Teknologi and/ or any equivalent party(s), will commence development of an e-platform on an open concept basis, allowing any retail operator to join.

A new company will then be set up to facilitate and manage the operation of the virtual mall. The nature of business for the proposed new company will include the sourcing of IT services and infrastructure as well as other relevant applications covering human resources and payroll, inventory management and enterprise resource planning.

The new company will recruit around 500 staff and train them in IT, online marketing and logistics management. Processes and systems related to online ordering and order fulfilment will be developed to manage the expected high trading volume.

The virtual mall is expected to be fully implemented in 2012. Recruitment of participating SMEs and retailers will commence in 2011.

Investments to date:

Small Retailer Transformation Programme (TUKAR) Doorstep Retails Sdn Bhd will provide a platform of convenience to SMEs in terms of technical support and facilities. This initiative is a move forward from Doorstep’s current successful e-commerce model. Investment: RM35 million (USD10 million) by 2020. Koperasi Jiwa Malaysia Bhd will lead an initiative to provide a virtual mall platform for SMEs to enter the online sphere. This will be achieved via its online portal, VPayCash. By leveraging on an established portal, Koperasi Jiwa will allow local SMEs to expand their target market to a much larger audience. Encouraging the use of e-commerce creates economies of scale, reducing overhead costs and maximizing revenue. Investment: RM15 million (USD4.3 million).

Interested parties are already speaking to funds and banks on the next steps. As part of the overall plan to have a balance between foreign and local retailers, the local retailers will be provided with facilitation and funding options to execute the purchases. One model being studied is where GLICs and local retailers become equity partners in a new holding company that would purchase shares in the foreign retailers.

Government will remove selected import duties by the end of 2010. MDTCC and the Ministry of Tourism, together with trade associations, will create awareness of this policy change locally and internationally.

Wellness resorts will be established in strategic locations, currently identified to be Penang (leveraging its already vibrant health tourism market), Banjaran Spa in Ipoh and Bandar Utama (where a developer already has a lifestyle retirement village in its plans). Wellness centres would enhance these existing locations and markets by incorporating full-featured retail outlets.

Investments in wellness resorts will be borne by these same developers. Selected high brand-value retailers from the Malaysian retail industry would be invited to set up shop at these locations. Along with these, the resort would offer accommodation in the form of hotels, low-density apartments, etc.

The marketing effort by the developers is expected to deliver 500,000 foreign tourists annually. In addition to this, they aim to attract about 30,000 Malaysian customers per year as well.

Investments to date:

Mines Wellness City The Country Heights Group of Companies is developing the Mines Wellness City as an integrated health and wellness resort, which will serve as a one-stop destination for both modern and complementary medicine. Investment: RM3 billion or USD 857 million by 2020.

Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC) and Tourism Malaysia will coordinate retailers from all sectors of the economy in annual unified Malaysia sales.

MAHB will create a retail hub as a spin-off from the development of KLIA2, with 55,000 square metres of additional retail space in addition to the new retail space of 43,000 square metres in the new KLIA2. This could contribute to making KLIA an attractive shopping destination not only to airline passengers but also to residents within the vicinity of the airport.

Investments to date:

MAHB MAHB has invested in a new Low-Cost Carrier Terminal (LCCT) in Sepang which will feature a landside shopping mall. Investment: RM486 million (USD139 million).

BBBs will be developed comprising an integrated retail experience, anchored by several category stores, e.g. hypermarkets, furniture superstores, digital products and electronics equipment malls as well as toy and sporting goods stores, large automotive showrooms, textile centres, garden and hardware superstores. The total built-up retail space will be around 26 hectares. The BBB will be supported by food and beverage outlets, convenience stores, liquor and tobacco retailers.

BBBs will be presented as a single, unified development project to the various Ministries and regulatory bodies for approvals to reduce duplication and avoid unnecessary delays. MDTCC will champion and facilitate approvals across agencies, ministries and local authorities.

A special purpose delivery vehicle (SPDV) will be established to support the MDTCC and land developer to coordinate developments and act as an interface with the various BBB retailers. Essentially, this SPDV is the heart of a public-private partnership that will coordinate all integrated infrastructure developments and facilitate regulatory approvals, marketing and other enabling activities. The SPDV will do this through a project management office that interfaces between the various parties; its performance will be measured by specific KPIs and timelines.

Nusajaya has been chosen to be the location of the first project because of:

• An enthusiastic master developer (UEM Land) with aligned commercial goals;
• A suitable site of 400 acres with appropriate zoning and planning permission, and reasonably mature infrastructure such as roads, power and connectivity;
• A sizeable potential market of around 7 million people (including Singapore); and
• A significant amount of interest expressed by retailers to participate

Other BBB locations (e.g. Nilai or Penang) are identified as business opportunities at this stage as they are subject to further assessment with relevant third parties.