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Consumer goods and retail report
(Forecast closing date: May 20th 2010)
Retail sales, international comparison
(US$ bn) Malaysia US Japan China Germany
Source: Economist Intelligence Unit.
2005 a 33 3,193 1,216 820 414
2006 a 37 3,395 1,163 958 421
2007 a 45 3,528 1,147 1,173 460
2008 a 51 3,614 1,316 1,561 502
2009 a 49 b 3,440 b 1,425 b 1,835 471 b
2010 c 54 3,571 1,461 2,173 459
2011 c 58 3,659 1,488 2,664 474
2012 c 64 3,786 1,549 3,210 494
2013 c 69 3,988 1,598 3,847 514
2014 c 76 4,211 1,644 4,608 536
a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.
Malaysia is considered to be among the most developed of the world's emerging markets. The Economist Intelligence Unit estimates annual private consumption per head to have increased by 43.4% between 2005 and 2009, to US$3,395. Despite a contraction in real GDP growth, the unemployment rate remained below 4% in 2009. However, substantial regional variations in income and employment levels exist. Consumer lifestyles are evolving, owing in part to rising affluence and improving education. Around 60% of the population lives in urban areas. Although Malaysia boasts relatively high private consumption, the level is low compared with that of the country's closest neighbour, Singapore, where consumption per head stood at an estimated US$14,711 in 2009. Moreover, market opportunities are constrained by the small size of Malaysia's population. At just over 28m in 2009, Malaysia’s population is just one-third that of Thailand and is dwarfed by the population of India, which exceeds 1bn.
Income and demographics
Nominal GDP (US$ bn) Population (m) GDP per head (US$ at PPP) Private consumption per head (US$) No. of households ('000) No. of households with annual earnings above US$5,000 ('000) No. of households with annual earnings above US$10,000 ('000) No. of households with annual earnings above US$50,000 ('000) No. of households with net wealth over US$1m ('000)
Source: Economist Intelligence Unit.
2005 a 2006 b 2007 b 2008 b 2009 b 2010 c 2011 c 2012 c 2013 c 2014 c 138.0 156.6 a 186.1 a 221.6 a 191.3 a 229.8 245.2 268.4 290.1 320.2 26.1 26.6 a 27.2 a 27.7 a 28.3 a 28.8 29.4 29.9 30.5 31.0 11,531 12,362 a 13,238 a 13,862 13,503 14,358 14,826 15,410 16,260 17,377 2,367 2,643 a 3,134 a 3,615 a 3,395 3,807 4,021 4,378 4,723 5,145 b 5,678 5,570 5,775 5,870 5,956 6,044 6,133 6,223 6,315 6,408 3,967 b 2,227 b 124 b 10 4,184 2,452 146 17 4,499 2,839 191 29 4,745 3,151 235 22 4,673 2,977 204 16 4,961 3,367 264 22 5,109 3,540 293 23 5,295 3,781 340 26 5,457 3,986 385 28 5,643 4,237 449 31
a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.
Industry Report: Consumer goods and retail June 2010
© The Economist Intelligence Unit Limited 2010
but the government hopes to see a rapid increase in e-commerce.9% in 2010.4 6.0 2.2 22. 2005 a 125. boosted by a strong rebound in the domestic economy and rising tourist arrivals.8% of GDP to an estimated 7% in 2009.4 -5.0 5. particularly in peninsular Malaysia. Real GDP contracted by 1.9 12. Demand.2bn in 2010.0 2006 a 136.6 2013 c 219. However.5 48.4 33.2 31.1 44. Retailing The profile of the retail sector has changed markedly in recent years.7 4.5 2. The total value of retail sales is expected to increase to US$54.5 68.2 4.4 15. slightly below the average rate of around 10.3 37.5 2014 c 236.6 a 2010 c 178.9 4.6 10.1 2.6 7.5 75. Malaysia's economy did not perform as badly as was originally feared.4 2009 b 171.1 2. This time. There has been a corresponding decline in the number of smaller.7 3.7 -0.1 7.eiu. Driven by consumer demand.7 29. The trend has been less apparent in the eastern states of Sarawak and Sabah. a Actual.7bn in 2009.0 2008 a 171.1 54.2 17.9 33.7% a year.7% a year in the historical period.9 20.5 1. Shopping complexes have also increased in popularity. The number of hypermarkets in Malaysia has grown from fewer than 20 at the start of the decade to more than 80 by the end of 2008. %) Source: Economist Intelligence Unit.7 2. the government is under pressure to widen the tax base as it tries to reduce the budget deficit.0 3.3 24.0 35.Malaysia 10 The outlook for the consumer-goods market is positive.6 2012 c 204.9 29. a government sales tax (GST) of 5% is levied on hotel. locally owned shops.8 11.6 30.2% a year in 2010-14.5 10. this is likely to change in 2011 when the government hopes to introduce a new GST. but was withdrawn owing to objections from businesses. with more than 550 currently in existence.7 Retail sales Retail sales (M$ bn) Retail sales (US$ bn) Retail sales. Improving consumer confidence and a sustained economic recovery is expected to underpin growth in the remainder of the forecast period when growth in retail sales is expected to average 8.6 42.0 15. from US$48.7 2011 c 189. restaurant and professional bills. We forecast that Malaysia's economy will grow by 6.com/consumergoods © The Economist Intelligence Unit Limited 2010 . The government will continue to focus on promoting Industry Report: Consumer goods and retail June 2010 www.9 38.3 26.7% in 2009. a trend towards bigger stores has been evident. c Economist Intelligence Unit forecasts.2 b 51.1 19. Owing to a number of stimulus measures adopted by the government in 2009 and a modest economic rebound in the global economy in the second half of that year. which rose from 4. Instead.1 5. Retail sales in US dollar terms are forecast to grow by an average of 9. There is no value-added tax (VAT) in Malaysia.9 9.3 6.3 0. b Economist Intelligence Unit estimates. Average annual GDP growth in 2011-14 will also be faster than the that recorded in 2005-09.4 24.0 57. a shallower contraction that that of 4-5% that was estimated by the government. Online retailing remains in its infancy.2 2.2 18.4 26. The modest slowdown partly reflects the impact of a new goods and services (GST) that is expected to be implemented in 2011. volume growth (%) Retail sales.6 2007 a 153. US$ value growth (%) Non-food retail sales (US$ bn) Food retail sales (US$ bn) Consumer price inflation (av.1 11.2 27.7% in 2009.2 20.8 64. The new tax was originally scheduled for 2007.8 23.0 3. following a contraction of 1.
but the distributive trades sector was not one of the sectors on the government's list. as well as to reduce the incidence of online fraud.11 Malaysia e-commerce in the 10th Malaysia Plan (a medium-term spending plan covering 2006-10). Najib Razak. The food retail sector is fragmented in Malaysia. but computer ownership remains low. The government also hopes to enact legislation in the forecast period to help to strengthen the legal framework and increase public confidence in e-commerce transactions. In 2004 the government raised the foreign-ownership limit on retailers to 70%. lifted the local equity rule in eight services sectors. Food. Access to the Internet is not a huge problem in the major cities where internet cafes are widely available. supermarkets and department stores are prohibited from 24-hour trading. Firms interested in opening new hypermarkets must have paid-up capital of at least M$50m (US$15m) and must be able to show that each new outlet will serve at least 350. which has 25. Parkson (the retailing arm of a Malaysian conglomerate. hypermarkets. Foreign companies need approval from the Committee on Wholesale and Retail Trade to launch operations or relocate branches.000 residents. from 51% previously. The government has relaxed various restrictions over the years. Furthermore. In 2009 the prime minister. The regulations applying to the construction of shopping malls are less restrictive. with 33 stores. particularly among low-income groups and in rural areas. if Malaysia is used as a regional distribution centre. In recent years the government has passed legislation limiting the expansion of hypermarkets. Moreover. The second-largest chain is another local retailer. Food. In rural areas the sector is still dominated by traditional stores and markets. beverage and tobacco output accounted for around 12. which has seven stores located on peninsular Malaysia and plans to develop two new stores in Sabah and Sarawak. and the Economist Intelligence Unit does not expect these restrictions to be lifted in the forecast period. and more malls are likely to be built in 2010-14. Two Japanese retailers. and AEON of Japan. which is expected to be unveiled later in June. Sogo and Justco. with 32 outlets across Malaysia. which has more than 440 stores across the country. but a local equity rule that requires private companies to offer 30% of their equity to bumiputera (ethnic Malays and other indigenous peoples) is likely to remain in place in the forecast period. Dairy Farm Giant Retail.eiu. foreign firms can own 100% of local retail subsidiaries. In the grocery retail sector the leading player is a domestic firm. the Lion Group) has the largest presence in the department-store sector. beverages and tobacco Malaysia has a small food-processing industry that serves both the domestic and regional markets (the bulk of food exports from Malaysia are to Asia). Supply. also operate in Malaysia. unlike in a number of Western countries.6% of total manufacturing Industry Report: Consumer goods and retail June 2010 www. The main obstacle to faster growth in this area is the low rate of broadband subscriptions. while in urban areas supermarkets and hypermarkets have grown in popularity.com/consumergoods © The Economist Intelligence Unit Limited 2010 . Metrojaya. A UK-based retailer. on condition that the remaining 30% stake is held by members of the bumiputera. are also important players. Tesco.
9 48. Expenditure on food.2 0.7 Vegetable consumption (kg per head) 48.4 62. lower import tariffs and rising standards of living will bolster consumption of fruit and vegetables in the forecast period.7 0.1 0.6 57. Food.2 Tea consumption (kg per head) 0.0 62.7 Meat consumption (kg per head) 47. Chicken is the Industry Report: Consumer goods and retail June 2010 www.044 26.9 52.4 23.199 63. However.0 50.084 b 40.8 64.793 33.9 54.1 49.5 49.3 68.0 67. Source: Economist Intelligence Unit. The agricultural sector accounted for around 8% of GDP at factor cost in 2009 and employs about 15% of the labour force.7 54.0 23.371 55.4 52. such as meat. lamb and poultry. and also in halal products.1 49. There are likely to be large differences in the rates of growth within the various spending categories. 38. However. growth in consumption of basic foods.6 60.9 24. Cocoa is another important export product. Malaysia produces considerable amounts of beef. beverages and tobacco will account for a relatively small proportion of total household income in 2010-14 as standards of living continue to improve.6 49.7 0.5 51.2 0.0 Milk consumption (litres per head) 45. Other significant agricultural exports include pineapples and a number of spices.2 0.8 b 46.2 49.7 0. milk and fruit.842 49.1 0.8 61.6 3. The popularity of supermarkets. in line with increasing household income.7 66. Food demand.9 66. beverages and tobacco consumption 2005 a 2006 b 2007 b 2008 b 2009 b 2010 c 2011 c 2012 c 2013 c 2014 c Food. which must conform to strict Islamic dietary and slaughter rules.7 0.184 52.5 23.982 73.7 63. Demand for meat and vegetable oil has increased in recent years.1 62. is likely to be slow.518 Food.815 a 22. b Economist Intelligence Unit estimates.7 0. meat. beverages & tobacco (market demand. beverages and tobacco as a percentage of total consumer spending stood at an estimated 24% in 2009. beverages & tobacco (market demand. beverages & tobacco (consumer expenditure.2 0. Household spending on food.3 22.5 Food.2 0. and has among the world's highest consumption rates per head of chicken and eggs. % real growth) 1.733 a 19.2 23. Malaysia is one of the world's largest producers and exporters of palm oil.4 50.6 52.com/consumergoods © The Economist Intelligence Unit Limited 2010 .7 0.5 63.3 Fish consumption (kg per head) 56.4 -1.9 51.9 23.2 49.7 0.2 0.7 a Actual. and this is expected to remain the case in 2010-14.6 62.8 Coffee consumption (kg per head) 0.0 b 0. US$ m) 14.205 67.7 0.8 23.6 3. beverages & tobacco (% of household spending) 24.9 51.7 53.8 59.7 0. c Economist Intelligence Unit forecasts.9 3.Malaysia 12 production in 2006.1 51.7 49. Malaysia's consumption of seafood is high compared with its meat consumption.9 50. specialising in fish.4 61.973 30. producing more than 15m tonnes every year—around 50% of world production. Much of Malaysia's cocoa is exported in processed form: the country is the sixth-largest cocoa-grinding centre in the world.7 50. Malaysia also has a substantial food-processing sector.eiu. Consumption volumes of canned food and confectionery are likely to rise.1 2.1 48.2 58.216 27.996 23.2 3. there will be periodic concerns about the health implications of eating large amounts of farmed fish or shellfish.8 64. fruit and vegetables.2 0.781 US$ m) Food.8 4.0 Fruit consumption (kg per head) 57.6 50.997 16.2 5.3 50.739 37.848 46.202 58.7 23.5 50.
but imports are taking an increasing share of the consumer market.com/consumergoods © The Economist Intelligence Unit Limited 2010 . 1 kg (supermarket) 1. McDonald's and KFC. Malaysia imports over 90% of the milk products that it consumes.16 0.eiu.13 Malaysia cheapest source of meat protein in the country and is the most popular meat among Malaysians. top quality. pasteurised.55 Two-course meal for two people (average) 135 % of monthly personal disposable income 0.44 0. Growing concerns regarding the impact of fast food on the future health of the nation are likely to dampen demand for such foods.45 Milk. All of the leading companies in the sector. 1 litre (supermarket) 0. common table. Foods can be deemed to be halal only if they adhere to strict rules laid down in Islamic law. 330 ml (supermarket) 1. Imports of beef and mutton are expected to increase in order to meet demand from the growing Muslim population as well as the rising requirements of the food-processing industry.58 Affordability rank 34 out of 58 34 out of 58 38 out of 57 37 out of 57 28 out of 58 43 out of 58 31 out of 57 43 out of 56 45 out of 56 43 out of 58 41 out of 58 Note.16 0. Accordingly.33 Coca-Cola. Malaysia is unlikely to achieve self-sufficiency in rice by the end of the forecast period.25 Potatoes. primarily because the country's climate is not conducive to milk production. white. fresh. which specifies the calorie content of all products. the authorities believe that one way of addressing the problem is to tighten the regulations applying to fast-food chains. have already agreed to nutritional labelling.99 Cigarettes. Despite government efforts to encourage greater cultivation of the crop. largely because there are no dietary prohibitions or religious restrictions on its consumption. Affordability rank: for each country the price of an item as a percentage of monthly personal disposable income is calculated.16 4.78 Sugar. Malaysia will continue to rely on imports to meet the bulk of its food needs. 1 kg (supermarket) 2. including the local operations of two US fast-food giants. 750 ml (supermarket) 11. is also expected to rise in 2010-14. Demand for meat and meat-based products is likely to remain firm in the forecast period. resulting in greater variety Industry Report: Consumer goods and retail June 2010 www. such as snacks and confectionery. 1 kg (supermarket) 1. pack of 20 (supermarket) 2.45 Wine.53 0. The most affordable country will have the lowest percentage and be ranked first. As in other countries suffering from high levels of obesity (a condition that is estimated to affect 40% of the population in Malaysia).70 0. Demand for processed halal foods. 1 kg (supermarket) 0.47 Chicken. Food supply. Marlboro.47 0. 1 litre (supermarket) 1. Malaysia is a major producer of tropical fruit and vegetables.49 White rice. which produces goods for both the domestic and export markets. the main food crop.52 0. Local production of rice.90 47. 2 kg (supermarket) 1. meets around 70% of domestic demand. and this is expected to remain the case.98 0. Countries are ranked according to these percentages. the government has imposed a ban on televised advertising of fast food targeted at children.76 Beer. Pricing Item Price (US$) White bread. in line with much faster growth in the Muslim population than in the ethnic-Chinese population.
Brandy has traditionally been the most popular alcoholic drink after beer. coastal fishing and aquaculture. which are easily available from neighbouring countries. in part because of its perceived health benefits. as more than one-half of the population is currently under 25 years old. which is being made good by imports and the expansion of deep-sea fishing. The dominant food-processing company in Asia. This trend is expected to continue in the forecast period. Beer is consumed widely. Malaysia is currently the largest cocoa-processing country in Asia and is a major net exporter of cocoa products. High import duties on wine and whisky constrain demand for these products. Some companies have moved into the production of higher value added goods. The food-processing sector is large: processed food worth around M$6bn (US$1. Malaysia has traditionally had a liberal attitude towards alcohol consumption. while Friesland Coberco of Denmark and two local companies. Demand for soft drinks will continue to be underpinned by favourable demographics. fruits. has packaging operations in Malaysia and is looking to build a larger presence there. Industry Report: Consumer goods and retail June 2010 www. Ace Canning. which prohibits the drinking of alcohol. The fish-processing industry engages in the canning of fish and the production of surimi (minced processed fish) products. There is a growing shortfall in seafood supply locally. The industry is dominated by small and medium-sized firms. owing to sluggish population growth among the main consumers of alcoholic beverages in Malaysia. including breaded and battered products and food supplements. Manufacturers have already adapted their packaging to try to increase their share of the market by highlighting the vitamin content of their products. as the majority of the population adheres to Islam. specialising in fish. vegetables and cocoa.eiu. sales of beer and spirits will be slow. Although it is a largely Islamic country. Total sales of wine and spirits (off-trade only) are estimated at around 50m litres in 2008.com/consumergoods © The Economist Intelligence Unit Limited 2010 . the ethnic-Chinese and Indian communities. and fruit and vegetable drinks). while more than 100m litres of beer are sold each year. and a local firm. having increased only slightly in the past five years. livestock. Other players include a Singapore-based palm oil processing company. Beverage demand. This shift is likely to continue in the forecast period. Alcohol consumption is most common among the Chinese section of the population. Domestic operators in the sector are facing competition from imports. Alcohol consumption is low.7bn) was exported in 2006. San Miguel of the Philippines. although consumption of red wine has increased sharply in recent years from a low base.Malaysia 14 as well as the availability of out-of-season produce. and consumption is likely to rise modestly from 2010 as income levels increase. including China. are also important. Cheap imports are available from neighbouring countries. Jasmine Food and Yeo Hiap Seng. Lam Soon. but it has declined in popularity relative to whisky and wine in recent years. Although beverage demand will continue to rise. Rising health awareness will result in a shift away from soft drinks perceived to be less healthy (such as carbonates) towards supposedly healthier ones (such as bottled water. Nestlé of Switzerland is the main foreign player in the Malaysian processedfood sector. including chocolates.
are also important. tobacco consumption levels in Malaysia are probably understated. Nestlé is the leading player. France and Australia. with numerous brands and companies currently operating. a subsidiary of Carlsberg of Denmark. Beverage supply. which is the largest in Malaysia. In addition. which now has more than 80 outlets across peninsular Malaysia. brands from Association of South-East Asian Nations (ASEAN) countries. whose core brands in Malaysia are Guinness and Anchor. The company's output is around 4m kg a year. The soft-drinks market is highly fragmented. Demand for cigarettes has grown rapidly in recent years. such as Starbucks of the US. However.eiu. which it hopes will be ready before the end of that year. appears to be growing. More than 20bn cigarettes were sold in 2009. and may prove effective in reducing tobacco consumption. An Anglo-Dutch conglomerate. although the sector is essentially a duopoly of two foreign players. which comes mainly from the US. Fraser & Neave of Singapore has been the licensed bottler of Coca-Cola since 1936. but increases in sales taxes and growing health concerns are expected to slow the trend. and we expect this trend to continue in 2010-14. High import duties relative to product value protect the domestic market and push up prices for imported alcoholic beverages. The introduction of a minimum price of M$6 (US$1. and Diageo of the UK. the popularity of cigarettes among young Malaysians. accounting for 70% of local output and 50% of local consumption. given the wide prevalence of contraband and counterfeit tobacco products. In an effort to reduce smoking levels. the government is likely to maintain strict controls on tobacco advertising and to broaden its ban on smoking in public places. Boh. Moderate growth in consumption of tobacco products is expected in the forecast period. An import licence issued by the Customs and Excise Department is required in order to import wine. However. However. the US-based Coca Cola Company has recently decided to allow its decades-long contract with Fraser & Neave to expire in 2011 and plans to build a new bottling plant. Despite concerns about the effects of smoking on health. Unilever. In the coffee market.com/consumergoods © The Economist Intelligence Unit Limited 2010 . Tobacco demand. notably women. Drinks produced locally dominate the beer sector in both volume and value terms. As a result of changes in cultural restrictions and norms. which is offsetting a decline in the proportion of males who smoke. Boh owns the Sungai Palas tea plantation. it could Industry Report: Consumer goods and retail June 2010 www. notably San Miguel lager from the Philippines. these duties will continue to apply to alcohol imports from outside of the ASEAN Free-Trade Area (AFTA). are the top companies in the tea market. Coffee demand has been driven to a certain extent by aspirational factors and by the expansion of foreign chains. and a domestic firm.15 Malaysia Coffee and tea consumption is growing but is still minimal. Excise taxes on cigarettes and tobacco products have increased in recent years. Carlsberg Malaysia.70) for a packet of cigarettes has helped to narrow the price differential between branded products and low-priced local cigarettes. Malaysia imports all of its wine. developing nations such as Malaysia are seeing an increase in smoking among females.
000 in 2000. However. Other consumer products The electronic and electrical goods sector is considered to be the backbone of Malaysian manufacturing. and according to the Confederation of Malaysian Tobacco Manufacturers their products account for 8% of total cigarette sales. owned by a US firm.com/consumergoods © The Economist Intelligence Unit Limited 2010 .Malaysia 16 also lead to an increase in demand for counterfeit cigarettes.eiu. Dunhill and Benson & Hedges.000 in 2006. making it more difficult for leading companies to maintain market share. Marlboro. compared with around 12. British American Tobacco. Tobacco supply. Industry Report: Consumer goods and retail June 2010 www. The US is the leading exporter of tobacco leaf to Malaysia. US and the euro area. which has altered consumers' tastes and lifestyles. and Japan Tobacco International. there is now considerable price pressure to relocate many facilities to China. China. Contraband and counterfeit cigarettes are thought to account for around 25% of the total cigarette market. and many multinational companies either have their own local production facilities or have outsourced production to Malaysian manufacturers. Counterfeit cigarettes are expected to remain a feature of the market in the forecast period. owing to the large number of Indonesian migrant workers in Malaysia. Popular tobacco brands include Kent. which accounted for around one-third of the total market in 2009. Tobacco production is shrinking: the number of active tobacco growers in Malaysia dropped to 4. the bulk of which are imported. all of which are distributed by British American Tobacco. but will face intense competition from imports following the country's decision to cut tariffs to comply with a regional agreement that created AFTA. supplying goods to the domestic market as well as to Singapore. Altria. have helped to drive demand for cosmetics and toiletries in recent years. The personal computer (PC) manufacturing industry is well developed. Local brands are also gaining in popularity. Peter Stuyvesant. are also popular. Indonesian clove cigarettes are the most common type of illegally imported cigarette. Most tobacco consumers exhibit brand loyalty. Leading players in the cigarette market include a UK-based firm. while Brazil and Thailand are the main suppliers of low-priced tobacco leaf. and Winston. The domestic tobacco industry is heavily protected. owned by Japan Tobacco. Rising rates of urbanisation. Cigarette smuggling is on the rise.
7 2.com/consumergoods © The Economist Intelligence Unit Limited 2010 . sales of consumer electronics are expected to be driven by demand for replacements or new purchases as prices of these goods decline and incomes rise.643 8.9 2.3 295 6. In recent years sales have been buoyed by direct sales.9 909 14. However. Demand for exports of such products picked up significantly in the first quarter of this year as Malaysia's leading export markets began to recover from recession.594 8.044 8. such as sun protection.291 7.585 13.463 -3.645 7.405 3.eiu. In the forecast period.2 1. a subsidiary of a US-based firm.2 394 10.2 1.8 438 12.046 8.4 1. are generally no longer perceived as being luxury goods.553 1.735 0. partly as a result of government policies designed to increase affordability.179 2.1 2.4 3.6 261 -0. economic prospects have improved significantly in recent months amid a strong rebound in the domestic economy and a gradual recovery in global demand.0 416 11.982 2010 b 2.7 334 8.987 6.3 1.861 -2.181 9.9 2.517 0. Amway Malaysia. Sales of domestic appliances will be underpinned by an increase in home ownership.209 -7.17 Malaysia Consumer products: market demand Clothing (US$ m) Clothing (% real change) Footwear (US$ m) Footwear (% real change) Household furniture (US$ m) Household furniture (% real change) Household textile products (US$ m) Household textile products (% real change) Soaps & cleaners (US$ m) Soaps & cleaners(% real change) Electrical appliances & houseware (US$ m) Electrical appliances & houseware (% real change) Household audio & video equipment (US$ m) Household audio & video equipment(% real change) Television sets (stock per 1. a feature that is expected to continue in the forecast period.9 5.6 3.8 3.750 2012 b 3. Toiletries and some beauty products.7 2.7 1. Spending on non-food retail items is likely to have been hit by weak consumer confidence in 2009.0 2.832 8.233 8.040 18.0 2.2 3.0 1.9 213 -6. Malaysia is one of the leading exporters of electronic and electrical goods in the Association of South-East Asian Nations (ASEAN). c Actual.6 3.4 2.899 2011 b 3.567 14.870 7.489 8.947 7.588 2013 b 3. sales of which have proved resilient in the past year or so.0 2.0 460 13.939 6. 2005 a 1.7 6.529 3.000 0.2 345 4.169 a Economist Intelligence Unit estimates.3 1.746 9. but sales will largely be limited to the major urban areas.077 c 2009 a 2.2 4. particularly among low-income groups and a government campaign to attract foreign investors to buy second homes in the country. skincare and colour cosmetics.968 9.468 7.3 2.098 8.394 5.9 2.356 7.7 353 8.8 3.7 2.4 3.988 5.000 people) PCs (units) Source: Economist Intelligence Unit.600 c 2006 a 2.6 980 6.224 c 2008 a 2.655 5.366 2014 b 4. Amway will continue to dominate this particular market.972 9.5 238 2.091 4.2 1.708 2.4 314 3.203 8. The stock of more affordable housing is set to rise after the government approved a number of construction projects as part of a wider package of stimulus measures in 2009.424 11.397 c 2007 a 2.9 4.328 9.491 6.061 7.287 7.9 374 4.764 8.104 5. b Economist Intelligence Unit forecasts. Demand.2 4.829 9. Sales of cosmetics and toiletries are forecast to grow at a fairly brisk pace.9 2.097 12.590 7.290 8. the first since the 1997-98 Asian financial crisis.1 410 4.573 10.0 1.5 295 5.1 276 6.4 1.8 1.2 3.487 14.5 1.4 373 9.6 1.6 4.2 4. when the economy suffered a mild recession.4 2.9 214 -9.6 1.4 2.1 315 7.6 276 5.565 12.807 6.640 10.514 3.319 3.8 2.3 2.6 2.205 5.6 5. Sales of PCs are expected to grow steadily. Industry Report: Consumer goods and retail June 2010 www.
3 Affordability rank 38 out of 58 41 out of 58 37 out of 58 32 out of 58 31 out of 56 30 out of 57 34 out of 57 24 out of 56 32 out of 56 37 out of 58 Note. while hedging their bets by also launching operations in China. France. for two slices (supermarket) Shampoo & conditioner in one. Panasonic. and local production is largely limited to mixing and formulation processes using imported ingredients.98 5. Sony. Dell. Manufacturing of electrical and electronic goods is well developed.Malaysia 18 Pricing Item Soap. underpinned by a sustained recovery in the global economy. Export-orientated manufacturing is mainly located in Penang and the Klang valley in the state of Selangor. Some multinational firms that were already present in Malaysia have since invested in sophisticated manufacturing facilities. Sharp and Sony. NEC of Japan and Dell of the US are among the leading players in the PC market. ready to wear.48 8. deluxe type (chain store) Business suit. Affordability rank: for each country the price of an item as a percentage of monthly personal disposable income is calculated.44 810 % of monthly personal disposable income 0. The government views the sector as a vital part of its plans to make Malaysia the Industry Report: Consumer goods and retail June 2010 www. Supply.30 11. flatscreen 66 cm (av) Price (US$) 0. The Klang valley has the largest and longest-established concentration of general manufacturing operations.93 6. two piece. US-based electronics manufacturers such as IBM. Three Japanese electronics manufacturers. The country hopes to expand its halal industry to include non-food products such as pharmaceuticals.08 2.22 0. The most affordable country will have the lowest percentage and be ranked first. firms are building inventories in response to the modest recovery that is already under way in the global economy.41 4. Countries are ranked according to these percentages. Most imports come from the US.15 44.36 24. Many of these firms are contract manufacturers for haircare products. in addition to the Middle East and South-east Asia. Estée Lauder of the US. cosmetics and leather goods. according to the Federation of Malaysian Manufacturers.00 241 127 15. Following a period of destocking in 2009.63 17. Around 50 small and medium-sized companies produce cosmetics locally. Shiseido of Japan and Lancôme and Chanel (both of France) are the leading brands. daytime (chain store) Child's shoes.eiu. Japan and China.01 85. medium weight (chain store) Dress. 60 watts (supermarket) Electric toaster. as well as hotel and catering services.05 286. two. 100 g (supermarket) Light bulbs. Intel and Advanced Micro Devices have continued to invest in the country.com/consumergoods © The Economist Intelligence Unit Limited 2010 . perfumes and cosmetics. and is also export-oriented. Sharp and Panasonic have shifted core activities to Malaysia. It also hopes to become the leading halal supplier to China and North Africa. Penang’s customs-free industrial zones have been the focus of investment by international electronics firms. In 2010-14 output is expected to grow at a steady pace. The cosmetics and toiletries market is import-oriented. sportswear (chain store) Compact disc album (av) Television.62 1. are the leading firms in the electronics sector.52 0. 400 ml (supermarket) Lipstick.
19 Malaysia largest halal hub in the region and is expected to unveil targets for the sector in the 10th Malaysia Plan (a medium-term spending plan covering 2006-10). US$) Terms of trade (1990=100) Exchange rate M$:US$ (end-period) Source: Economist Intelligence Unit.1 3.8 4.5 6. with tariffs for most products now standing at around 5% in the more developed ASEAN economies of Brunei. especially in relation to China.1 4.8 -12.com/consumergoods © The Economist Intelligence Unit Limited 2010 . the share of Malaysian exports going to these markets has diminished in recent years.6 8.4bn. However.2% year on year in 2009 owing to a contraction global trade.eiu. b Economist Intelligence Unit forecasts.5 c 2009 a 157.3 3. Malaysia expects to conclude bilateral trade agreements with the US. Further steps towards a more comprehensive AEC are likely to be taken in the forecast period.5 7. A single market.9 146.9 1.5 c 2007 a 176. Trade Malaysia is an open economy. However.1 118. Malaysia.3 9. while imports were equal to 75%.9 c 6.3 c 2008 a 199.4 8.4 157. Exports of minerals consist almost entirely of crude oil and liquefied natural gas (LNG). Indonesia. Australia. Malaysia’s economy has moved away from plantation and forestry products.6 4. A Common Effective Preferential Tariff scheme for ASEAN members has been established.1 -10. In 2009 exports of goods and services were equivalent to 96% of nominal GDP.2 2011 b 197.8 117. such as oil and rubber.0 114. which make up the bulk of agricultural exports.2 122.2 123.1 7. the Philippines.1 a Economist Intelligence Unit estimates.6% between 2004 and 2008. Industry Report: Consumer goods and retail June 2010 www.3 3.7 200.9 c 1.0 119.5 3.9 4. Malaysia is a member of the Association of South-East Asian Nations (ASEAN).2 c 8. US$) Total imports of goods cif (US$ bn) Import volume of goods (% change) Import prices (% change.6 c 8. Exports of manufactured goods made up 78% of total exports in 2009. exports plunged by 10.4 c 2010 b 180.8 170. Trade Total exports of goods fob (US$ bn) Export volume of goods (% change) Export prices (% change.5 7.5 3. Malaysia’s largest export category.7 c 6.2 11. With the exception of palm oil. according to Bank Negara Malaysia (the central bank).7 3.3 4.8 c 2006 a 160.1 113.7 3. The value of merchandise exports (also on a customs basis) has risen at a fairly brisk pace. with annual average growth of 6. In 2009 Malaysia recorded a merchandise trade surplus (on a customs basis) of US$40. while commodities accounted for around 19%.7 131.7 3.1 185.9 7.1 c 4. Although the US and the euro area remain the largest export destinations. were set up on the basis of low local content.6 118.0 c 8.3 9. many of the production lines used in the manufacture of electronics.0 117.4 -10. 2005 a 141.0 3.5 -7.7 3.0 7.5 c 1.6 5.7 4. with the result that the bill for imported goods tends to rise in line with revenue from exports.2 115.2 2013 b 231. Chile and India in the forecast period.8 3.5 145.6 118. In the forecast period export growth will be underpinned by strengthening global demand for Malaysia’s particular product mix of electrical and electronic goods and basic commodities.7 115.5 3. c Actual. Singapore and Thailand (the socalled ASEAN-6).3 10. is already in place for 11 priority sectors in ASEAN-6.2 3.2 156.0 7.2 2014 b 248.2 5.2 2012 b 213.2 4. The government is encouraging manufacturers and exporters to move up the value chain and improve product quality in order to maintain international competitiveness. the ASEAN Economic Community (AEC).1 5.6 3.
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