Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
Malaysia (Wholesale and Retail for Selected Products)
MARKET REVIEW UNDER THE COMPETITION ACT 2010
FOR SERVICE SECTOR IN MALAYSIA
(WHOLESALE AND RETAIL FOR SELECTED PRODUCTS)
DRAFT FINAL REPORT
Prepared by:
Frost & Sullivan Perunding Strategi Sdn. Bhd.
27 February 2020
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
Malaysia (Wholesale and Retail for Selected Products)
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Table of Contents
LIST OF FIGURES................................................................................................................................. 5
LIST OF TABLES ................................................................................................................................. 11
LIST OF ABBREVIATIONS ................................................................................................................. 13
1 INTRODUCTION .......................................................................................................................... 15
1.1 Market Review Background .................................................................................................. 15
1.2 Market Review Objectives .................................................................................................... 16
1.3 Expected Outcomes ............................................................................................................. 16
1.4 Research Methodology ......................................................................................................... 17
1.5 Scope and Limitations .......................................................................................................... 19
1.5.1 Scope ............................................................................................................................ 19
1.5.2 Limitations ..................................................................................................................... 21
1.6 Focus of the Market Review ................................................................................................. 22
1.6.1 Quantitative Approach................................................................................................... 22
1.6.2 Qualitative Approach ..................................................................................................... 27
1.6.3 List of Selected Product Categories ............................................................................. 35
1.7 Report Outline ....................................................................................................................... 37
2 OVERVIEW OF THE MALAYSIAN ECONOMY AND SERVICES SECTOR .............................. 38
2.1 Overall Macroeconomic Trends ............................................................................................ 38
2.1.1 Gross Domestic Product ............................................................................................... 38
2.1.2 Labour Indicators .......................................................................................................... 39
2.1.3 Productivity .................................................................................................................... 40
2.1.4 Consumer Price Index................................................................................................... 42
2.1.5 Household Expenditure ................................................................................................. 43
2.2 Services Sector in Malaysia ................................................................................................. 48
2.2.1 GDP Contribution .......................................................................................................... 48
2.2.2 Labour Indicators .......................................................................................................... 50
2.2.3 Productivity Performance .............................................................................................. 51
2.2.4 Investment Performance ............................................................................................... 52
2.3 Overview of the Wholesale and Retail Trade Industry ......................................................... 54
2.3.1 Number of Establishments ............................................................................................ 54
2.3.2 Employment .................................................................................................................. 57
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2.3.3 Performance .................................................................................................................. 60
2.3.4 Wholesale Trade ........................................................................................................... 61
2.3.5 Retail Trade ................................................................................................................... 66
2.3.6 Supply Chain ................................................................................................................. 71
2.3.7 Rules and Regulations Governing Wholesale and Retail Trade .................................. 74
2.3.8 Pricing Trends ............................................................................................................... 88
2.3.9 Industry Trends ............................................................................................................. 92
2.3.10 Key Findings from Interviews with Industry Players outside Kuala Lumpur ................. 95
3 MARKET ASSESSMENT FOR FOOD & BEVERAGES .............................................................. 97
3.1 Market Definition and Product Segmentation ....................................................................... 97
3.2 Market Overview ................................................................................................................... 97
3.2.1 Key Players in the F&B Landscape .............................................................................. 98
3.3 Pricing Analysis and Margins ............................................................................................... 99
3.3.1 Pricing Trends ............................................................................................................... 99
3.3.2 Margins Analysis ......................................................................................................... 101
4 MARKET ASSESSMENT FOR HOUSEHOLD CLEANING PRODUCTS ................................. 103
4.1 Market Definition and Product Segmentation ..................................................................... 103
4.2 Market Overview ................................................................................................................. 103
4.2.1 Key Players in the Household Cleaning Products Landscape ................................... 103
4.3 Pricing Analysis and Margins ............................................................................................. 104
4.3.1 Pricing Trends ............................................................................................................. 104
4.3.2 Margins Analysis ......................................................................................................... 106
5 MARKET ASSESSMENT FOR PERSONAL CARE & TOILETRIES ......................................... 108
5.1 Market Definition and Product Segmentation ..................................................................... 108
5.2 Market Overview ................................................................................................................. 108
5.2.1 Key Players in the Personal Care & Toiletries Market Landscape ............................. 109
5.3 Pricing Analysis and Margins ............................................................................................. 110
5.3.1 Pricing Trends ............................................................................................................. 110
5.3.2 Margins Analysis ......................................................................................................... 112
6 MARKET ASSESSMENT FOR CLOTHING ............................................................................... 114
6.1 Market Definition and Product Segmentation ..................................................................... 114
6.2 Market Overview ................................................................................................................. 114
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6.2.1 Key Players in the Clothing Retailing Market Landscape ........................................... 114
6.3 Pricing Analysis and Margins ............................................................................................. 115
6.3.1 Pricing Trends ............................................................................................................. 115
6.3.2 Margins Analysis ......................................................................................................... 117
7 COMPETITION ASSESSMENT ................................................................................................. 119
7.1 Market Concentration ......................................................................................................... 119
7.1.1 Market Concentration in Wholesale Trade Industry ................................................... 119
7.1.2 Market Concentration in Retail Trade Industry ........................................................... 121
7.2 Competition Concerns in the Wholesale and Retail Trade Industry .................................. 123
7.2.1 Introduction .................................................................................................................. 123
8 PRELIMINARY RECOMMENDATIONS ..................................................................................... 143
8.1 Issues and Challenges ....................................................................................................... 143
8.1.1 Market Driven Issues .................................................................................................. 143
8.1.2 Regulatory Driven Issues ............................................................................................ 145
8.2 Preliminary Recommendations ........................................................................................... 147
8.2.1 Mapping of the Preliminary Recommendation to Issues/Challenges ......................... 150
9 APPENDICES ............................................................................................................................. 153
9.1 Findings from Industry Survey ............................................................................................ 153
9.1.1 Profile of Survey Participants ...................................................................................... 153
9.1.2 Business Operations ................................................................................................... 159
9.1.3 Pricing and Promotion ................................................................................................. 168
9.1.4 Level of Competition and Experience/Observation of Potential Anti-Competitive
Practices ..................................................................................................................................... 184
9.1.5 Industry Trends ........................................................................................................... 189
9.1.6 Awareness of MyCC ................................................................................................... 191
9.2 Findings from Consumer Survey ........................................................................................ 193
9.2.1 Profile of Survey Participants ...................................................................................... 193
9.2.2 Consumer Purchasing Behaviour ............................................................................... 194
9.2.3 Preferred Retail Channel ............................................................................................ 206
9.2.4 e-Commerce................................................................................................................ 212
9.2.5 Competitive Landscape and Product Offerings .......................................................... 216
9.2.6 Product Pricing ............................................................................................................ 218
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9.2.7 Product Bundling ......................................................................................................... 224
9.3 Price Trends Comparison ................................................................................................... 228
9.3.1 Rempah Ratus ............................................................................................................ 228
9.3.2 Rempah Ratus (Berbungkus) ..................................................................................... 229
9.3.3 Beras ........................................................................................................................... 230
9.3.4 Bihun ........................................................................................................................... 233
9.3.5 Roti .............................................................................................................................. 234
9.3.6 Gula ............................................................................................................................. 235
9.3.7 Tepung ........................................................................................................................ 236
9.3.8 Minyak Dan Lemak ..................................................................................................... 237
9.3.9 Ikan Dalam Tin ............................................................................................................ 238
9.3.10 Kicap Dan Sos ............................................................................................................ 240
9.3.11 Sapuan (Spreads) ....................................................................................................... 241
9.3.12 Mentega ...................................................................................................................... 243
9.3.13 Santan (Kotak) ............................................................................................................ 244
9.3.14 Penjagaan Diri ............................................................................................................. 246
9.3.15 Penjagaan Rumah ...................................................................................................... 247
9.3.16 Bahan-Bahan Minuman .............................................................................................. 248
9.3.17 Tersedia Diminum ....................................................................................................... 249
LIST OF FIGURES
Figure 1: Total Number of Consumer Complaints Received, Food & Beverages, 2014–2019 .......... 30
Figure 2: Total Number of Consumer Complaints Received, Household Cleaning Products, 2014–
2019 ..................................................................................................................................................... 31
Figure 3: Total Number of Consumer Complaints Received, Personal Care & Toiletries, 2014–2019
.............................................................................................................................................................. 33
Figure 4: Total Number of Consumer Complaints Received, Clothing, 2014–2019 ........................... 34
Figure 5: Contribution to GDP at Constant 2015 Prices, Malaysia, 2015–2018 ................................. 38
Figure 6: Annual Employment by Kind of Economic Activity, 2015 - 2018 ......................................... 39
Figure 7: Employed Persons by Occupation, Malaysia, 2018 ............................................................. 39
Figure 8: Labour Productivity Trends, Malaysia, 2014–2018 .............................................................. 40
Figure 9: Labour Productivity Growth by Key Economic Sectors, Malaysia, 2016–2019 ................... 41
Figure 10: Weightage of Categories covered in Malaysia‟s CPI ......................................................... 42
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Figure 11: Consumer Price Index, Malaysia, 2011–2019 ................................................................... 43
Figure 12: Mean Household Expenditure Trend, Malaysia (2009/10, 2014,2016) ............................. 44
Figure 13: Mean Household Expenditure of Selected Products, Malaysia (2014-2016) .................... 47
Figure 14: Services Sub-Sectors‟ Contribution to the Services Sector GDP, Malaysia, 2015–2018 . 48
Figure 15: Overall GDP and Services Sector Growth Trends, Malaysia, 2016–2018 ........................ 49
Figure 16: Breakdown of Employment by Services Sector, Malaysia, 2018 ....................................... 50
Figure 17: Services Sector Labour Productivity Growth, Malaysia, 2016–2018 ................................. 51
Figure 18: Number of Establishments in WRT, Malaysia (2013 and 2018) ........................................ 54
Figure 19: Number of Establishments in WRT by State (2018) .......................................................... 55
Figure 20: Number of Establishments in Wholesale Trade Sub-sector by State (2018) .................... 55
Figure 21: Number of Establishments in Retail Trade Sub-sector by State (2018) ............................ 56
Figure 22: Breakdown of Establishments in WRT by Firm Size (2015) .............................................. 56
Figure 23: Number of Persons Engaged in WRT During December or the Last Pay Period, Malaysia
(2013 and 2018) ................................................................................................................................... 57
Figure 24: Breakdown of Persons Engaged in WRT by type of Engagement (2018)......................... 58
Figure 25: Distribution of Employed Person in WRT by Nationality .................................................... 58
Figure 26: Total Revenue in WRT, Malaysia (2013 and 2018) ........................................................... 60
Figure 27: Total Expenditure in WRT, Malaysia (2013 and 2018) ...................................................... 61
Figure 28: Number of Establishments under Wholesale Trade sub-industry ...................................... 63
Figure 29: Revenue Breakdown of Wholesale Trade sub-industry ..................................................... 64
Figure 30: Expenditure Breakdown of WholesaleTrade sub-industry ................................................. 65
Figure 31: Number of Establishments under Retail Trade sub-industry ............................................. 67
Figure 32: Revenue Breakdown of Retail Trade sub-industry ............................................................ 68
Figure 33: Expenditure Breakdown of Retail Trade sub-industry ........................................................ 69
Figure 34: WRT Supply Chain (except for Clothing) ........................................................................... 72
Figure 35: Supply Chain for Clothing ................................................................................................... 74
Figure 36: Prevailing Regulations in WRT ........................................................................................... 81
Figure 37: Rating of Price Volatility by Product Segment - Food & Beverages .................................. 99
Figure 38: Observed Price Increase by Consumers in the Past 12 Months, Malaysia (2019) ......... 100
Figure 39: Price Margins for Food & Beverages Products, Malaysia................................................ 101
Figure 40: Price Margins Illustration for Food & Beverages Products, Malaysia .............................. 102
Figure 41: Rating of Price Volatility by Product Segment - Household Cleaning Products .............. 104
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Figure 42: Key Household Cleaning Products by Price Increases Observed by Consumers in the
Past 12 Months, Malaysia .................................................................................................................. 105
Figure 43: Price Margins for Household Cleaning Products, Malaysia ............................................. 106
Figure 44: Price Margins Illustration for Household Cleaning Products, Malaysia ........................... 107
Figure 45: Rating of Price Volatility by Product Segment - Personal Care Products ........................ 110
Figure 46: Key Personal Care Products by Price Increases Observed by Consumers in the Past 12
Months, Malaysia ............................................................................................................................... 111
Figure 47: Price Margins for Personal Care Products, Malaysia ...................................................... 112
Figure 48: Price Margins Illustration for Personal Care Products, Malaysia ..................................... 113
Figure 49: Rating of Price Volatility by Product Segment – Clothing ................................................ 115
Figure 50: Key Clothing Products by Price Increases Observed by Consumers in the Past 12
Months, Malaysia ............................................................................................................................... 116
Figure 51: Price Margins for Clothing Products, Malaysia ................................................................ 117
Figure 52: Price Margins Illustration for Clothing Products, Malaysia ............................................... 118
Figure 53: Market Concentration using CR and HHI ......................................................................... 119
Figure 54: Business Nature of the Surveyed Companies ................................................................. 153
Figure 55: Product Offerings .............................................................................................................. 154
Figure 56: Location of Main Business Activities ................................................................................ 155
Figure 57: Years of Operating in Malaysia ........................................................................................ 155
Figure 58: Company‟s Ownership and Public Listing status ............................................................. 156
Figure 59: Company‟s Size ................................................................................................................ 157
Figure 60: Operating Profit Margin in 2018 - Breakdown by Business Nature ................................. 159
Figure 61: Operating Profit Margin in 2018 - Breakdown by Location of main Business Activities .. 160
Figure 62: Operating Profit Margin in 2018 - Breakdown by Product Offering ................................. 160
Figure 63: Top 5 Operating Cost Components .................................................................................. 161
Figure 64: Average Contribution of the Different Product Categories to Company‟s Revenue ........ 161
Figure 65: Key Distribution Channel .................................................................................................. 163
Figure 66: Number of Product Suppliers ........................................................................................... 164
Figure 67: Top 3 Most Concerning Areas in Business – Breakdown by Business Nature ............... 165
Figure 68: Top 3 Most Concerning Areas in Business – Breakdown by Geographical Location ..... 166
Figure 69: Frequency of Checking Inventory ..................................................................................... 167
Figure 70: Frequency of price review – Breakdown by Business Nature ......................................... 168
Figure 71: Frequency of price review – Breakdown by Product Offering .......................................... 169
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Figure 72: Factors Influencing Product Pricing .................................................................................. 170
Figure 73: Supplier‟s Influence on Product Pricing ........................................................................... 171
Figure 74: Availability of a Systematic Mechanism to Monitor and Set the Prices of Products Sold 172
Figure 75: Price consistency across different shops or for different clients ...................................... 173
Figure 76: Price consistency between online and in-store ................................................................ 173
Figure 77: Practice of Products below Cost Price ............................................................................. 174
Figure 78: Rating of Price Volatility by Product Segment - Food & Beverages ................................ 175
Figure 79: Rating of Price Volatility by Product Segment - Household Cleaning Products .............. 176
Figure 80: Rating of Price Volatility by Product Segment - Personal Care Products ........................ 177
Figure 81: Rating of Price Volatility by Product Segment – Clothing ................................................ 178
Figure 82: Frequency of Changing Selling Price - Food and Beverages .......................................... 179
Figure 83: Frequency of Changing Selling Price - Household Cleaning Products ........................... 180
Figure 84: Frequency of Changing Selling Price - Personal Care Products ..................................... 181
Figure 85: Frequency of Changing Selling Price - Clothing .............................................................. 182
Figure 86: Discounts or Promotions .................................................................................................. 183
Figure 87: Top 5 Client/customer Attractions .................................................................................... 184
Figure 88: Perception of the Wholesale and Retail Trade Industry in Malaysia ............................... 185
Figure 89: Existence of Potential Anti-Competitive Practices ........................................................... 186
Figure 90: Perception of anti-competitive practices in Malaysian wholesale and retail trade industry
............................................................................................................................................................ 188
Figure 91: Expectation of industry growth in the next 3 years – Breakdown by Business Nature.... 189
Figure 92: Expectation of industry growth in the next 3 years – Breakdown by Employment Size .. 189
Figure 93: Plan to expand/ open new stores/ distribution centres/ warehouses within the next 3 years
............................................................................................................................................................ 190
Figure 94: Key Industry Trends ......................................................................................................... 191
Figure 95: Awareness of MyCC and Competition Law ...................................................................... 191
Figure 96: Perception of the existing rules, regulations and laws ..................................................... 192
Figure 97: Profile of Survey Participants ........................................................................................... 193
Figure 98: Top 5 Most Frequently Purchased / Consumed Food & Beverages ............................... 195
Figure 99: Monthly Expenditure on Food & Beverages ..................................................................... 196
Figure 100: Frequency of Product Purchase - Food & Beverages ................................................... 197
Figure 101: Top 5 Most Frequently Purchased / Consumed Household Cleaning Products -
Breakdown by Monthly Household Income (MHI) ............................................................................. 198
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Figure 102: Monthly Expenditure on Household Cleaning Products ................................................ 199
Figure 103: Frequency of Product Purchase - Household Cleaning Products ................................. 200
Figure 104: Top 5 Most Frequently Purchased / Consumed Personal Care & Toiletries- Breakdown
by Monthly Household Income (MHI) ................................................................................................ 201
Figure 105: Monthly Expenditure on Personal Care & Toiletries ...................................................... 202
Figure 106: Frequency of Product Purchase - Personal Care & Toiletries ....................................... 203
Figure 107: Top 5 Most Frequently Purchased / Consumed Clothing Items - Breakdown by Monthly
Household Income (MHI) ................................................................................................................... 204
Figure 108: Monthly Expenditure on Clothing ................................................................................... 205
Figure 109: Frequency of Product Purchase - Clothing .................................................................... 206
Figure 110: Place of Purchase - Food & Beverages ......................................................................... 207
Figure 111: Place of Purchase - Household Cleaning Products ....................................................... 208
Figure 112: Place of Purchase - Personal Care & Toiletries ............................................................. 209
Figure 113: Place of Purchase - Clothing .......................................................................................... 210
Figure 114: Reasons for Purchasing the Selected Items at the Selected Retail Outlets .................. 211
Figure 115: Adoption of e-Commerce - Food & Beverages Items .................................................... 212
Figure 116: Adoption of e-Commerce - Household Cleaning Products ............................................ 213
Figure 117: Adoption of e-Commerce - Personal Care & Toiletries .................................................. 213
Figure 118: Adoption of e-Commerce - Clothing ............................................................................... 214
Figure 119: Reasons for Purchasing the Selected Items Online ...................................................... 215
Figure 120: Number of Groceries Retail Stores within Respondent's Housing Area ........................ 216
Figure 121: Price Difference for the Same Retail Outlet Brand in Different Locations ..................... 217
Figure 122: Price Difference for the Same Product Sold by Competing Retail Outlets .................... 217
Figure 123: Availability and Satisfactions with Brand Options .......................................................... 218
Figure 124: Observed Price Increase in the Past 12 Months - Food & Beverages .......................... 220
Figure 125: Observed Price Increase in the Past 12 Months - Household Cleaning Products ........ 221
Figure 126: Observed Price Increase in the Past 12 Months - Personal Care Products .................. 222
Figure 127: Observed Price Increase in the Past 12 Months - Clothing ........................................... 223
Figure 128: Observed Product Bundling - Food & Beverages .......................................................... 225
Figure 129: Observed Product Bundling - Household Cleaning Products ........................................ 226
Figure 130: Observed Product Bundling - Personal Care Products.................................................. 227
Figure 131: Average Price of Rempah Ratus by Format, Malaysia (2019) ...................................... 228
Figure 132: Average Price of Rempah Ratus by State, Malaysia (2019) ......................................... 229
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Figure 133: Average Price of Rempah Ratus (Berbungkus) by Format, Malaysia (2019) ............... 230
Figure 134: Average Price of Beras by Format, Malaysia (2019) ..................................................... 231
Figure 135: Average Price of Beras by State, Malaysia (2019) ........................................................ 232
Figure 136: Average Price of Bihun by Format, Malaysia (2019) ..................................................... 233
Figure 137: Average Price of Bihun by State, Malaysia (2019) ........................................................ 233
Figure 138: Average Price of Roti by Format, Malaysia (2019) ........................................................ 234
Figure 139: Average Price of Roti by State, Malaysia (2019) ........................................................... 234
Figure 140: Average price of Gula by Format, Malaysia (2019) ....................................................... 235
Figure 141: Average Price of Gula by State, Malaysia (2019) .......................................................... 235
Figure 142: Average Price of Tepung by Format, Malaysia (2019) .................................................. 236
Figure 143: Average Price of Tepung by State, Malaysia (2019) ..................................................... 236
Figure 144: Average Price of Minyak Dan Lemak by Format, Malaysia (2019) ............................... 237
Figure 145: Average Price of Minyak Dan Lemak by State, Malaysia (2019)................................... 238
Figure 146: Average Price of Ikan Dalam Tin by Format, Malaysia (2019) ...................................... 239
Figure 147: Average Price of Ikan Dalam Tin by State, Malaysia (2019) ......................................... 239
Figure 148: Average Price of Kicap Dan Sos by Format, Malaysia (2019) ....................................... 240
Figure 149: Average Price of Kicap Dan Sos by State, Malaysia (2019) .......................................... 241
Figure 150: Average Price of Sapuan (Spreads) by format, Malaysia (2019) .................................. 242
Figure 151: Average Price of Sapuan (Spreads) by State, Malaysia (2019) .................................... 243
Figure 152: Average Price of Mentega by Format, Malaysia (2019) ................................................ 244
Figure 153: Average Price of Mentega by Format, Malaysia (2019) ................................................ 244
Figure 154: Average Price of Santan (Kotak) by Format, Malaysia (2019) ...................................... 245
Figure 155: Average Price of Santan (Kotak) by State, Malaysia (2019) ......................................... 246
Figure 156: Average Price of Penjagaan Diri by Format, Malaysia (2019) ....................................... 247
Figure 157: Average Price of Penjagaan Diri by State, Malaysia (2019) .......................................... 247
Figure 158: Average Price of Penjagaan Rumah by Format, Malaysia (2019) ................................ 248
Figure 159: Average Price of Penjagaan Rumah by State, Malaysia (2019).................................... 248
Figure 160: Average Price of Bahan-Bahan Minuman by Format, Malaysia (2019) ........................ 249
Figure 161: Average Price of Bahan-Bahan Minuman by State, Malaysia (2019) ........................... 249
Figure 162: Average Price of Tersedia Diminum by Format, Malaysia (2019) ................................. 250
Figure 163: Average Price of Tersedia Diminum by State, Malaysia (2019) .................................... 250
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LIST OF TABLES
Table 1: Wholesale Trade MSIC Codes Covered in the Study ........................................................... 19
Table 2: Retail Trade MSIC Codes Covered in the Study ................................................................... 20
Table 3: Summary of Wholesale Trade Quantitative Indicators, Malaysia (2018) .............................. 23
Table 4: Summary of Retail Trade Quantitative Indicators, Malaysia (2018) ...................................... 24
Table 5: Summary of CPI, Malaysia (December 16–November 2019) ............................................... 25
Table 6: Top Five Industries Based on Quantitative Filtering Parameters .......................................... 25
Table 7: Similar Studies Undertaken by Other Jurisdictions ............................................................... 27
Table 8: Consumer Complaints Received, 2014–2019 ....................................................................... 29
Table 9: Consumer Complaints Trends, Food & Beverages (2014-2019) .......................................... 30
Table 10: Consumer Complaint Trends, Household Cleaning Products, 2014–2019 ........................ 32
Table 11: Consumer Complaint Trends, Personal Care & Toiletries, 2014–2019 .............................. 33
Table 12: Consumer Complaints Trends, Clothing (2014-2019) ......................................................... 35
Table 13: Wholesale Trade MSIC Codes Covered in the Market Review .......................................... 35
Table 14: Retail Trade MSIC Codes Covered in the Market Review .................................................. 36
Table 15: Mean Household Expenditure Comparison, Malaysia (2014-2016) ................................... 44
Table 16: Mean Household Expenditure on Selected Products Comparison, Malaysia (2014-2016) 45
Table 17: Approved Investments in the Services Sub-Sector, Malaysia, 2018–2019 ........................ 52
Table 18: Popular Players in the Hypermarket and Supermarket Space, Malaysia ........................... 70
Table 19: Popular Players in the Mini Market Space, Malaysia .......................................................... 70
Table 20: Popular Players in the Convenience Store Space, Malaysia .............................................. 70
Table 21: Key Stakeholders Across Supply of Selected Product Categories ..................................... 71
Table 22: Key Government Stakeholders, Malaysia ........................................................................... 74
Table 23: Description of Act/Policy Related to Selected Product Categories ..................................... 82
Table 24: Licences and Certificates Requirements ............................................................................. 86
Table 25: Difference in Average Prices by State and Format by Products in 2019 ............................ 89
Table 26: Recent Activities in Malaysian Retail Industry ..................................................................... 92
Table 27: Market Concentration in Wholesale Trade Industry by MSIC Code, Malaysia ................. 119
Table 28: MSIC Code with High Concentration in Wholesale Trade Industry, Malaysia .................. 120
Table 29: Market Concentration in Retail Trade Industry by MSIC Code, Malaysia ......................... 121
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Table 30: MSIC Code with High Concentration in Retail Trade Industry, Malaysia .......................... 122
Table 31: Level of Attention Warranted for the Potential Anti-Competitive Concern ........................ 125
Table 32: Preliminary Proposed Initiatives ........................................................................................ 147
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LIST OF ABBREVIATIONS
ACD ASEAN Cosmetic Directive
AML Anti-Monopoly Law
CAGR Compound Annual Growth Rate
CDCR Control of Drugs and Cosmetic Regulations
CPI Consumer Price Index
CR Concentration Ratio
DOSM Department of Statistics Malaysia
DSM Department of Standards Malaysia
F&B Food & Beverages
FCA Finnish Competition Authority
FMCG Fast Moving Consumer Goods
FSQD Food Safety and Quality Division
FTA Free Trade Agreement
FTC Federal Trade Commission
GDP Gross Domestic Product
HACCP Hazard Analysis and Critical Control Point
HHI Herfindahl–Hirschman Index
IDI In-depth interview
IDIs Indepth Interviews
JAKIM Jabatan Kemajuan Islam Malaysia
KPDNHEP Ministry of Domestic Trade and Consumer Affairs
KPKT - Ministry of Housing and Local Government, Malaysia
MEA Ministry of Economic Affairs, Malaysia
MED Ministry of Entrepreneur Development, Malaysia
MHBN National Product Price Council (Majlis Harga Barang
Negara)
MIDA Malaysian Investment Development Authority
MITI Ministry of International Trade and Industry, Malaysia
MOH - Ministry of Health, Malaysia
MPC Malaysia Productivity Corporation
MSIC Malaysia Standard Industrial Classification
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MyCC The Malaysia Competition Commission
NCAC National Consumer Advisory Council
NDRC National Development and Reform Commission
NPRA National Pharmaceutical Regulatory Agency
OFT Office of Fair Trading
PBT Pihak Berkuasa Tempatan
PLB Private Label Brands
RGM Retail Group Malaysia
RM Ringgit Malayia
SAMR State Administration for Market Regulation
Sdn. Bhd. Sendiran Berhad
SME Small and medium-sized enterprises
SSM Companies Commission of Malaysia (Suruhanjaya
Syarikat Malaysia)
TDO Trade Description Order
USD United States Dollars
WRT Wholesale and Retail Trade
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1 INTRODUCTION
1.1 Market Review Background
To escape the middle-income trap and move towards becoming a high-income nation, a highly
efficient and competitive market is crucial in enabling robust economic development. The
introduction of the Competition Act in 2010 has been regarded as a cornerstone for increased
economic governance in Malaysia. Previously, anti-competitive conduct, such as price-fixing,
intended supply limitation, market sharing, and sharing of sensitive information among industry
players were often practised among groups, such as trade associations, as commonplace and often
ignored, and sometimes misconstrued as acceptable by consumers.
Section 11(1) of the Competition Act 2010 lays the foundation for the Malaysia Competition
Commission (hereinafter “the MyCC”) to conduct a review on any market to determine whether any
feature or combination of features prevents, restricts or distorts competition in the market.
The MyCC has decided to conduct a market review on competition in Malaysia‟s services sector,
focusing on wholesale and retail trade of selected products as the sector is crucial to the country‟s
economy and growth. In 2018, the services sector contributed 56.7% to Malaysia‟s Gross Domestic
Product (GDP),1 grew at a growth rate of 5.7% between 2017 and 2018 when compared to the
overall national GDP at 4.4%. The highest contribution within the services sector came from
wholesale and retail trade industry, contributing 29.4% in 2018.
A competitive wholesale and retail trade industry is of utmost importance as it holds the key to both
economic stability and directly impacts household expenditure as a significant portion is spent on
basic essentials, such as food and beverages (18.0%), clothing (2.70%), household cleaning
products (0.99%) and personal care & toiletries (2.85%).2 An inefficient and less competitive market,
typically reflecting the possibility of higher prices for end consumers and lower costs for producers,
could adversely affect low-earning households more extensively as a higher proportion of their
expenditure would be spent on these essential products.
Given the importance of wholesale and retail trade industry to the nation‟s economic development,
the MyCC is encouraged to conduct a market review of the services sector with a focus on
wholesale and retail trade of selected products to determine the market structure, level of
competitiveness, and promote healthier competition in the sector.
1 Department of Statistics, Malaysia (DOSM)
2 DOSM – Household Expenditure Survey 2016
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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1.2 Market Review Objectives
The general objective of this market review is to understand the market structure and assess market
activities along the supply chain to identify any anti-competitive conduct in the wholesale and retail
trade services industry in Malaysia. It also seeks to evaluate prevailing industry practices and
regulations that restrict competition and cause unnecessary regulatory burdens.
Specific objectives of this market review are:
1. To determine the market structure, supply chain, and profile of industry players involved in
wholesale and retail trade services;
2. To assess the conduct of enterprises engaged in wholesale and retail trade services;
3. To assess the conduct of suppliers and consumers to enterprises involved in wholesale and
retail trade services;
4. To identify the cost, prices, and revenues of enterprises in wholesale and retail trade
services, which will be treated as strictly confidential;
5. To assess competition in wholesale and retail trade services;
6. To identify anti-competitive practices of enterprises involved in wholesale and retail trade
services;
7. To determine the extent of market distortion and whether government intervention is
necessary for curbing anti-competitive conduct in wholesale and retail trade services; and
8. To recommend improvements across government agencies and regulators in the identified
sector to minimise the actual or potential restrictive effect of regulations on competition in
wholesale and retail trade services.
1.3 Expected Outcomes
The expected outcomes of the market review are as follows:
To assess the overall market structure, market concentration, and market behaviour;
To identify possible anti-competitive conduct that may exist in the supply chain of the selected
product categories;
To examine the possibility of existing legislations and policies that may impede competition;
To enhance MyCC‟s knowledge on the competition level in the selected product categories and
strengthen enforcement activities should industry players practice anti-competitive conduct; and
To recommend measures to promote competition in the selected product categories markets and
identify areas where MyCC can provide advocacy to key stakeholders, in particular, the
respective government agencies or ministries.
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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1.4 Research Methodology
The review employs a three-pronged methodology leveraging both secondary and primary sources
to address the objectives of this market review.
A summary of the primary interactions and secondary research is presented below:
1 Survey of consumers: N=400 interviews (face-to-face).
2 Survey of distributors, wholesalers and retailers: N=400. This proposed sample size
corresponds to the statistical rigour of 95% confidence level and 5% margin of error. This
sample size is split between wholesale and retail distributive trade services (mix of online,
face-to-face and telephone).
3 In-depth interviews with wholesalers/distributors, retailers, manufacturers and discussions
with the Ministry of Domestic Trade and Consumer Affairs and related agencies including
MyCC, to obtain their views on potential harmful practices adopted in distributive trade
services.
4 Secondary research focusing on data gathering from DOSM, KPDNHEP, MHBN, SSM,
MPC, MIDA, internal databases; industry reports; local, regional and international news
articles; academic research publications; and company websites/annual reports/media
releases.
Objectives Methodology
1 To determine the market structure, supply
chain and profile of industry players that
are involved in wholesale and retail trade
services
Determine market structure largely through in-
depth interviews with the supply chain
participants pertinent to competition-related
factors along the supply chain
Mapping the supply chain largely through face-
to-face interactions and secondary research.
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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Objectives Methodology
2 To assess the conduct of enterprises
involved in the wholesale and retail trade
services
Determine anti-competitive conducts through
analysis of inputs received from in-depth
interviews and secondary research focusing on:
Price comparison of products across various formats and states and investigate into pricing practices
Examine any unfair practices restricting the availability of products or substitute products to competitors such as horizontal exclusive agreements, vertical exclusive agreements, market sharing, among others
3 To identify the cost, prices and revenues of
enterprises in the wholesale and retail
trade services which will be treated with
highly confidential
Preliminary assessment of cost and prices
validated from in-depth interviews, survey and
data gathered from DOSM, SSM, MHBN, and
various other secondary sources.
4 To assess competition in the wholesale
and retail trade services
Determine the level of competition through
analysis of inputs received from in-depth
interviews and secondary research
5 To identify anti-competitive practices of
enterprises involved in the wholesale and
retail trade services
Determine anti-competitive conducts through
analysis of inputs received from in-depth
interviews, survey and secondary research
6 To determine the extent of market
distortion and whether government
intervention is necessary in curbing
anticompetitive conduct in in wholesale
and retail trade services
a) Market distortion is defined as any activities,
market structure or regulatory factors that give
rise to anti-competitive practices due to among
others, dominant position in the market that will
result in distorted prices (prices which are
different from actual market prices) and supply
constraints
b) The extent of market distortion will be
determined by assessing time series data of
price, cost of goods sold and also taking into
consideration any prevailing subsidies available
to market participants, in addition to qualitative
and qualitative analysis that will be performed
through face-to-face interactions with the
industry participants
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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1.5 Scope and Limitations
1.5.1 Scope
The wholesale and retail trade services industry covers a broad range of segments such as F&B,
pharmaceuticals, and household goods, among others. For competition assessment to be focused
and meaningful, principles of economic relevance on both the supply side and demand side have
been considered to arrive at the focus products for this market review. On the supply side, the
selected products represent a high share of both revenue and employment of the larger wholesale
and retail trade industry. On the demand side, the selected segments have a significant impact on
consumer expenditure. Using quantitative indicators, such as contribution to economy, employment
generation, labour productivity, and qualitative indicators, such as the number of consumer
complaints and review of similar studies undertaken by other jurisdictions, four product categories,
namely F&B (processed), personal care & toiletries, household cleaning products, and clothing are
identified.
The following tables show the selected Malaysia Standard Industrial Classification (MSIC) codes
covering the product categories covered in this study.
Table 1: Wholesale Trade MSIC Codes Covered in the Study
No MSIC Code Description
1. 46321 Wholesale of rice, other grains, flour, and sugars
2. 46322 Wholesale of dairy products
3. 46323 Wholesale of confectionary
4. 46324 Wholesale of biscuits, cakes, breads, and other bakery products
5. 46325 Wholesale of coffee, tea, cocoa, and other beverages
6. 46329 Wholesale of other foodstuffs
Food & Beverages Personal Care & Toiletries
Household Cleaning Products
Clothing
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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No MSIC Code Description
7. 46413 Wholesale of clothing
8. 46419 Wholesale of textiles, clothing n.e.c.
9. 46422 Wholesale of perfumeries, cosmetics, soap, and toiletries
Table 2: Retail Trade MSIC Codes Covered in the Study
No MSIC Code Description
1 47111 Provision stores
2 47112 Supermarket
3 47113 Mini market
4 47114 Convenience stores
5 47191 Department stores
6 47192 Department stores and supermarket
7 47193 Hypermarket
8 47194 Newsagent and miscellaneous goods store
9 47199 Other retail sales in non-specialised stores n.e.c.
10 47211 Retail sale of rice, flour, other grains, and sugars
11 47213 Retail sale of dairy products and eggs
12 47216 Retail sale of bakery products and sugar confectionery
13 47217 Retail sale of mee, kuey teow, mee hoon, wantan skins, and other
food products made from flour or soya
14 47219 Retail sale of other food products n.e.c.
15 47222 Retail sale of tea, coffee, soft drinks, mineral water, and other
beverages
16 47510 Retail sale of textiles in specialised stores
17 47711 Retail sale of articles of clothing, articles of fur, and clothing
accessories
18 47722 Stores specialised in the retail sale of perfumery, cosmetics, and
toilet articles
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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The market review comprises the following aspects in the selected product categories:
1. Overview of the existing legislation and regulations in relation to the establishment, business
operations, product sourcing, and distribution along the value chain of the wholesale and
retail trade services industry;
2. Overview of the market structure and supply chain;
3. Profile of industry players involved along the supply chain of wholesale and retail trade
levels;
4. Competition in the supply chain of wholesale and retail trade levels on the following aspects:
a. Market share and market concentration
b. Market dominance and its economic impact on the sector;
5. Competition concerns in the supply chain of wholesale and retail trade services in relation to:
a. Possible anti-competitive conduct (e.g., anti-competitive agreement or abuse of
dominant position) among enterprises
b. Any existing policy or law that impedes competition in the industry; and
6. Recommendations and conclusion.
1.5.2 Limitations
The main limitation with regards to this market review is the non-availability of a standard
definition for personal care& toiletries, household cleaning products, and clothing which are
the three out of four products covered in this study.
As this market review views the product categories sold at the wholesale and retail levels,
aspects such as market structure and supply chain do not vary significantly with a slight
exception for clothing.
The interactions with the industry and various stakeholders are still in progress. Hence, some
of the information stated in this draft final version will be further strengthened and revised
during the next reporting stage to improve the accuracy and relevance of the content to the
market review.
The next version will include full comprehensive findings and the associated
recommendations after taking into consideration suggestions from public validation and
feedback from stakeholders.
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
Malaysia (Wholesale and Retail for Selected Products)
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1.6 Focus of the Market Review
Quantitative and qualitative indicators are used to prioritise candidate sectors for market studies
such as this current market review. There is no single universal approach. The table below shows
commonly used indicators for selecting candidate sectors or industries.
Commonly used quantitative indicators Commonly used qualitative indicators
Consumer price index (weights in consumer
baskets)
Complaints (consumers, industry players,
suppliers)
GDP output Changes in the industry which has the potential
to affect competition intensity
Employment Similar studies conducted by other jurisdictions
Investments Feedback from stakeholders, academicians
Productivity
Source: Frost & Sullivan analysis based on the Guide on Market Studies for Competition Authorities
OECD Publication
Quantitative and qualitative approaches are used to select the focus product categories for this
market review. Based on the current data available, four quantitative indicators have been used for
industry selection and validated with other jurisdiction studies.
1.6.1 Quantitative Approach
Economic Contribution: This criterion assessed the economic contribution of each industry based on
the sales value generated between 2012 and 2018. Sales value refers to:
The value of all goods, for which ownership or effective right to use with a view to ultimate purchase, has been transferred to others; and
The value of services rendered during the inquiry period, irrespective of time or method of payment.
Employment Size: As competition drives job creation, which leads to labour productivity and quality
of life improvements, it is an important criterion for consideration:
a. Assessed the total number of persons employed in each industry between 2012 and 2018.
Labour Contribution: This criterion is calculated as sales per employee as one of the measures for
determining retail industry productivity based on:
a. Estimated sales value generated by each employee for each industry. b. To be noted that productivity information published by Malaysia Productivity Corporation
does not publish data on industries covered within wholesale and retail (only up to two-digit MSIC codes are available).
Impact to Consumers: This criterion assessed consumers‟ spending patterns and importance based
on CPI and household expenditure survey.
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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1.6.1.1 Summary of Quantitative Indicators
Wholesale Trade
As shown in the table below, wholesale of household goods (textiles, clothing, footwear, and other
household goods) ranked first in terms of employment size and second in economic contribution,
indicating the industry‟s importance in job creation and revenue contribution to the economy.
Other specialised wholesale, comprising gaseous fuels, metals, construction materials, also ranked
within the top three in economic contribution, employment generation, and labour contribution.
Wholesale of food, beverages, and tobacco ranked third in terms of economic contribution to overall
wholesale and retail trade services as well as in employment generation.
Table 3: Summary of Wholesale Trade Quantitative Indicators, Malaysia (2018)
MSIC Code 46: Wholesale
Trade
Economic
Contribution to
Overall
Wholesale Trade
Employment
Size
(Ratio to Overall
Wholesale
Trade)
Labour
Contribution
In RM
461 Wholesale on a
fee or contract
basis
1.9% (7) 1.4% (7) 1,731,464.49 (2)
462 Wholesale of
agricultural raw
materials and live
animals
8.2% (5) 6.7% (5) 1,582,631.29 (3)
463 Wholesale of
food, beverages
and tobacco
18.1% (3) 20.0% (3) 1,172,431.47 (4)
464 Wholesale of
household goods
19.3% (2) 29.3% (1) 852,253.48 (5)
465 Wholesale of
machinery,
equipment and
supplies
8.7% (4) 16.4% (4) 689,724.00 (7)
466 Other specialised
wholesale
41.1% (1) 21.9% (2) 2,436,405.84 (1)
*Number within the brackets indicate the ranking
Source: Frost & Sullivan analysis based on Quarterly Services Statistics, Malaysia – DOSM
Publication
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
Malaysia (Wholesale and Retail for Selected Products)
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Retail
As shown in the table below, within the retail segment, non-specialised stores ranked among the top
three in all three quantitative parameters, followed by the sale of other goods in specialised stores.
In terms of economic contribution and employment generation, non-specialised stores are seen to
be crucial to the retail trade.
Table 4: Summary of Retail Trade Quantitative Indicators, Malaysia (2018)
MSIC Code 47: Retail Trade Economic
Contribution to
Overall Retail
Trade
Employment
Size
(Ratio to Overall
Retail Trade)
Labour
Contribution
In RM
471 Retail sale in non-
specialised stores
34.2% (1) 29.8% (1) 533,392.29 (3)
472 Retail sale of food,
beverages and
tobacco in
specialised stores
5.8% (6) 8.3% (5) 322,274.70 (8)
473 Retail sale of
automotive fuel in
specialised stores
8.4% (5) 3.6% (7) 1,108,734.15 (1)
474 Retail sale of
information and
communication
equipment in
specialised stores
10.4% (4) 10.1% (4) 483,299.32 (4)
475 Retail sale of other
household
equipment in
specialised stores
13.3% (3) 16.5% (3) 380,610.79 (6)
476 Retail sale of
cultural and
recreation goods in
specialised stores
5.6% (7) 7.4% (6) 348,693.05 (7)
477 Retail sale of other
goods in
specialised stores
21.2% (2) 22.7% (2) 438,057.16 (5)
478 Retail sale via
stalls and markets
0.0% (9) 0.0% (9) 112,489.90 (9)
479 Retail trade not in
stores, stalls or
markets
0.8% (8) 0.6% (8) 677,655.46 (2)
*Number within the brackets indicate the ranking.
Source: Frost & Sullivan analysis based on Quarterly Services Statistics, Malaysia – DOSM
Publication
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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Summary of CPI Index
Based on the consumer price index (CPI), the top three groups include food and non-alcoholic
beverages weightage at 29.5%, followed by housing, water, electricity, gas and other fuels at 23.8%
and transport at 14.6%.
Table 5: Summary of CPI, Malaysia (December 16–November 2019)
Category Weight
Nov-19
Dec-18
Dec-17
Dec-16
Total 122.1 121.1 120.9 116.8
Food & Non-Alcoholic Beverages 29.5% 133.3 131.7 130.8 125.7
Alcoholic Beverages & Tobacco 2.4% 168.0 167.5 165.6 165.3
Clothing & Footwear 3.2% 93.9 94.7 97.8 98.3
Housing, Water, Electricity, Gas & Other Fuels 23.8% 122.2 120.1 117.7 115.2
Furnishings, Household Equipment & Routine Household Maintenance
4.1% 116.8 115.3 115.2 112.5
Health 1.9% 123.2 121.5 122.0 119.3
Transport 14.6% 114.8 117.1 119.5 107.2
Communication 4.8% 97.5 96.1 97.4 97.9
Recreation Services & Culture 4.8% 112.3 111.5 111.7 111.1
Education 1.3% 120.3 118.3 117.0 115.1
Restaurants & Hotels 2.9% 132.3 131.1 129.4 126.1
Miscellaneous Goods & Services 6.7% 114.3 111.5 114.3 113.5
Source: DOSM
Note:
The weights used in the calculation of the CPI are updated periodically. This procedure is necessary to ensure that the weights reflect changes in consumer expenditure patterns.
Top Five Industries for Each Quantitative Filtering Parameter
The table below shows the top five industries identified using the quantitative indicators.
Table 6: Top Five Industries Based on Quantitative Filtering Parameters
Quantitative Indicator Wholesale Trade Retail Trade
Economic Contribution
Wholesale of food, beverages, and tobacco
Wholesale of household goods
Other specialised wholesale
Wholesale of machinery, equipment and supplies
Wholesale of agricultural raw materials and live animals
Retail sale in non-specialised stores
Retail sale of other goods in specialised stores
Retail sale of other household equipment in specialised stores
Retail sale of information and communication equipment in specialised stores
Retail sale of automotive fuel in specialised stores
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Quantitative Indicator Wholesale Trade Retail Trade
Employment Size
Wholesale of household goods
Other specialised wholesale
Wholesale of food, beverages, and tobacco
Wholesale of machinery, equipment and supplies
Wholesale of agricultural raw materials and live animals
Retail sale in non-specialised stores
Retail sale of other goods in specialised stores
Retail sale of other household equipment in specialised stores
Retail sale of information and communication equipment in specialised stores
Retail sale of food, beverages, and tobacco in specialised stores
Labour Contribution
Wholesale of food, beverages, and tobacco
Wholesale of household goods
Other specialised wholesale
Wholesale on a fee or contract basis
Wholesale of agricultural raw materials and live animals
Retail sale in non-specialised stores
Retail sale of other goods in specialised stores
Retail sale of automotive fuel in specialised stores
Retail trade not in stores, Stalls or Markets
Retail sale of information and communication equipment in specialised stores
Impact on Consumers
Food and non-alcoholic beverages
Miscellaneous goods and services
Housing, water, electricity, gas, and other fuels
Transport
Recreation services and culture
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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1.6.2 Qualitative Approach
1.6.2.1 Studies Undertaken by Other Jurisdictions
For the qualitative approach, coverage of similar studies undertaken by other jurisdictions was
considered. It also examined eight studies under the wholesale and retail trade industry conducted
by competition authorities in other jurisdictions.
The table below provides a summary of the eight studies.
Table 7: Similar Studies Undertaken by Other Jurisdictions
No. Country Title of the Study
Year Focus Area Reasons for Selecting the Focus Areas
1 South Africa
Grocery Retail Market Inquiry
2019 Grocery retail ● Elucidate features of the grocery
retail market that have resulted in
reduced competition and
diminished space for the
participation of small and
independent retail outlets (both in
urban and non-urban economies)
2 Mexico Competition Policy in the Mexican Grocery Retail Industry
2019 Grocery retail ● Grocery retail industry plays a vital
role from a consumer welfare
perspective.
Reference to other countries –
Several antitrust agencies
worldwide has conducted
comprehensive market
investigations into the grocery
retail market.
3 Botswana Competitive Analysis Of The Retail And Wholesale Sector In Botswana
2013 Food & groceries
● Highest proportion of complaints
(56%) received in 2011-2012
An earlier study noted that the
retail sector was characterised by
the rapid increase of chain stores
and supermarkets, and the
proliferation of franchising stores
which tended to exclude local
firms.
4 Turkey Turkish FMCG Sector Inquiry: Lessons From A Developing Country Perspective
2013 FMCG ● The growing trend of retail chains;
rapid consolidation of existing
domestic stores (mostly in the
form of creeping mergers)
Increase in food prices and
number of complaints from
suppliers on retailer practices.
5 Spain Report on the relations between
2011 Food retail ● Drastic changes in the retail food
market.
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No. Country Title of the Study
Year Focus Area Reasons for Selecting the Focus Areas
manufacturers and retailers in the food sector
Growing social concern over the
consequences of the increasing
bargaining power of retail
distribution over operators in the
rest of the food supply chain.
6 Ireland A Description of the Structure and Operation of Grocery Retailing and Wholesaling in Ireland: 2001 to 2006
2008 Food & drinks and household necessities
● Request from the Minister for
Enterprise, Trade and
Employment due to the recent
changes in the legislative and
regulatory environment.
7 United Kingdom
The supply of groceries in the UK market investigation
2008 Convenience and grocery stores
● There were several market
features in grocery supply by
retailers that could reasonably be
suspected to be preventing,
restricting, or distorting
competition, e.g., landholdings of
large grocery retailers and their
use of restrictive covenants, the
increase in buyer power of major
grocery retailers, and below-cost
selling and “price flexing” of major
grocery retailers.
8 Austria Allgemeine Untersuchung des österreichischen Lebensmittelhandels unter besonderer Berücksichtigung des Aspekts der Nachfragemacht (General Investigation of the Austrian Grocery Trade with special Consideration of the Aspect of Buying Power)
2007 Grocery retail ● Market dominance – two biggest
Austrian grocery chains (Rewe
and Spar) have a common market
share of approximately 65% in
Austria.
There have been complaints
about retailers using their buyer
and negotiation power to put
substantial pressure on their
suppliers.
9 Turkey Fast Moving Consumer Goods –
2005 FMCG retail trade
● FMCGs constitute a large part of
consumer spending.
Drastic transformation within the
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No. Country Title of the Study
Year Focus Area Reasons for Selecting the Focus Areas
Competitive Conditions and Policies
retail sector for FMCGs.
From the studies undertaken by other jurisdictions on the wholesale and retail trade industry, the
main focus was found to be on basic essential products.
1.6.2.2 Consumer Complaints
1.6.2.2.1 Overall
Based on the consumer complaints among the selected product categories covered in this market
review received by KPDNHEP between 2014 and early October 2019, more than 90% of the
complaints were related to F&B products, followed by clothing which received about 4% of
complaints in 2019. Between 2014 and 2019, the number of complaints recorded a CAGR of 16.9%
with steep jumps in 2015 and 2018.
The surge in consumer complaints in 2015 was mainly driven by price hike after the implementation
of GST and the misconduct of some sellers to charge GST although no receipt was provided or
there was no GST registration number stated on the receipt.
In 2018, the steep increase in consumer complaints was primarily due to no price drop during 0%
GST period and price increase after the implementation of SST.
Table 8: Consumer Complaints Received, 2014–2019
Product
Category
2014 2015 2016 2017 2018 2019*
Food &
Beverages
1,122 3,242 2,239 2,096 3,792 2,424
Personal
Care &
Toiletries
24 52 28 39 51 48
Household
Cleaning
Products
9 12 7 13 32 16
Clothing 34 47 43 77 140 109
Total 1,189 3,353 2,317 2,225 4,015 2,597
Y-o-Y
Growth in
complaints
182% -31% -4% 80% -35%
*Until October 3, 2019
Source: KPDNHEP
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1.6.2.2.2 Food & Beverages
Within the F&B segment, the number of complaints related to food was much higher compared to
beverages. In 2019, the number of complaints saw a steep decline of 36% compared to 2018, which
saw an increase of nearly 81%. The surge in complaints in 2018 could be attributed to dissatisfaction
regarding pricing.
Figure 1: Total Number of Consumer Complaints Received, Food & Beverages, 2014–2019
*Until October 3, 2019
Source: KPDNHEP
Among the complaints received, more than two-thirds were related to price issues, closely followed
by quality as well as fraudulent practices.
Most of the complaints received about food & beverages were related to unreasonable pricing, price
increase, non-display of prices and inconsistent food prices at eateries. Only around 3% of the
complaints were related to the retail of food & beverages in retail shops, where retailers were selling
the products above market price or did not display product price.
Table 9: Consumer Complaints Trends, Food & Beverages (2014-2019)
Item Types of Complaints Year
Total 2019* 2018 2017 2016 2015 2014
Food
Pricing 1,328 2,105 1,107 1,301 1,607 510
Quality 176 129 155 65 141 98
Choices 4 2 5 1 3 1
Availability of stock 7 3 3 6 1 3
No receipt 11 21 16 19 73 2
No refund 53 13 4 0 0 0
Fraud 99 160 90 80 277 73
Misleading advertisements 21 24 24 14 26 12
780
2,197
1,524 1,501
2,559
1,766
342
1,045
715 595
1,233
658
-
500
1,000
1,500
2,000
2,500
3,000
2014 2015 2016 2017 2018 2019*
Nu
mb
er
of
co
mp
lain
ts
Food
Beverages
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Item Types of Complaints Year
Total 2019* 2018 2017 2016 2015 2014
Not related 67 102 97 38 69 81
TOTAL 1,766 2,559 1,501 1,524 2,197 780 10,327
Beverages
Pricing 538 726 488 336 847 215
Quality 25 76 40 68 54 54
Choices 1 0 0 1 0 0
Availability of stock 2 1 0 2 1 0
No receipt 10 18 5 6 19 0
No refund 4 3 0 0 2 1
Fraud 53 94 56 21 88 17
Misleading advertisements 14 113 113 119 169 40
Not related 11 14 13 42 53 15
Total 658 1045 715 595 1,233 342 4,588
*Until October 3, 2019
Source: KPDNHEP
1.6.2.2.3 Household Cleaning Products
In the household cleaning product category, of the complaints received in the past five years, 58%
were on floor mop products followed by detergents (21%) and brooms (17%). During the same
period, dishwashing liquid products did not receive many complaints.
Figure 2: Total Number of Consumer Complaints Received, Household Cleaning Products, 2014–2019
*Until October 3, 2019
Source: KPDNHEP
0
5
10
15
20
25
30
35
2014 2015 2016 2017 2018 2019*
Nu
mb
er
of
Co
mp
lain
ts
Mop
Broom
Bleach
Dishwashing Liquid
Detergent
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As seen in the table below, most complaints about mop products were related to fraud, while pricing
was the main issue for brooms.
Table 10: Consumer Complaint Trends, Household Cleaning Products, 2014–2019
Item Types of Complaints Year
Total 2019* 2018 2017 2016 2015 2014
Detergent
Pricing
7 2
1 1
Availability of stock
1
No refund 1 2
Misleading
advertisement 1
Not related 3
TOTAL 4 10 2
2 1 19
Dishwashing
liquid
Pricing
1
TOTAL
1
1
Bleach
Pricing
1
Not related 1
TOTAL 1 1
2
Broom
Pricing 2 2
1 2 1
Quality
1
1
Availability of stock
1
Fraud
3
Not related 1
TOTAL 3 6
2 2 2 15
MOP
Pricing 2
1
3 1
Availability of stock
1
No refund 1 2 1 1 1
Fraud 2 4 2 2
3
Not related 3 7 7 2 4 2
Total 8 14 11 5 8 6 52
*Until October 3, 2019
Source: KPDNHEP
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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33
1.6.2.2.4 Personal Care & Toiletries
In the personal care & toiletries category, the highest number of complaints was received on
shampoo products, followed by toothpaste and body wash between 2014 and 2019.
Figure 3: Total Number of Consumer Complaints Received, Personal Care & Toiletries, 2014–2019
*Until October 3, 2019
Source: KPDNHEP
As shown in the table below, price was the leading cause of consumer complaints across all four
selected products within the personal care toiletries category.
Table 11: Consumer Complaint Trends, Personal Care & Toiletries, 2014–2019
Item Types of Complaints Year
Total 2019* 2018 2017 2016 2015 2014
Toothbrush
Pricing 6 4 1
5 4
Quality
1
Availability of stock
1
No refund
1 1
Fraud
1
Misleading advertisement
1 1 1
Not related 1
3
Total 7 7 6 3 5 4 32
Toothpaste
Pricing 8 8 5 3 14 5
Quality
1
Availability of stock
1
No refund 1
Fraud 2
2 1 1
Misleading advertisement
1
Not related
1 1
1
4 5 3 6 7 7 6
16
5
8 10 11 4
8
4
9 11 10
10
23
16
16
23 20
0
10
20
30
40
50
60
2014 2015 2016 2017 2018 2019*
Nu
mb
er
of
co
mp
lain
ts
Shampoo
Body Wash
Toothpaste
Toothbrush
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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34
Item Types of Complaints Year
Total 2019* 2018 2017 2016 2015 2014
Total 11 10 8 5 16 6 56
Body wash
Pricing 5 5 4 2 7 2
Quality
1
Fraud
2
1
Misleading advertisement 1 1
Not related 4 4 3 2 1 1
Total 10 11 9 4 8 4 46
Shampoo
Pricing 8 12 4 4 15 5
Quality
1
1
Availability of stock
1 1
No refund 1 3
Fraud 3 2 4 1 3 3
Misleading advertisement 4 1
2
Not related 4 5 7 8 3 2
Total 20 23 16 16 23 10 108
*Until October 3, 2019
Source: KPDNHEP
1.6.2.2.5 Clothing
Following the F&B product category, clothing was the next category receiving the highest number of
consumer complaints. Based on KPDNHEP data, headscarf products received the highest number
of complaints while the school uniform category received minimal consumer complaints. Between
2014 and 2019, there was no complaint received about baby clothing.
Figure 4: Total Number of Consumer Complaints Received, Clothing, 2014–2019
*Until October 3, 2019
Source: KPDNHEP
0
20
40
60
80
100
120
140
160
2014 2015 2016 2017 2018 2019*
Nu
mb
er
of
Co
mp
lain
ts
Head Scarf
Undergarments
School Uniform
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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35
Within the school uniform category, the complaints were mostly related to pricing, while for the
headscarf category, most complaints were recorded under fraud, followed by no refund and pricing.
Table 12: Consumer Complaints Trends, Clothing (2014-2019)
Item Types of Complaints Year
Total 2019* 2018 2017 2016 2015 2014
School uniform
Pricing
3 2 2 5
12
Not related 1
1
2
Total 1 3 3 2 5
14
Undergarments
Pricing 1 1
1 1
No refund
1
1
Fraud
1 2
Not related
1 2 2
Total 1 2 3 2 3 1 12
Headscarf
Pricing 6 19 2
4
Quality 2 9 4 3 2 1
Availability of stock 1 1
No receipt
1
No refund 8 1 12 8 3 3
Misleading advertisement
1 4
1
Fraud 78 86 36 23 22 12
Not related 12 18 13 4 8 16
Total 107 135 71 39 39 33 424
*Until October 3, 2019
Source: KPDNHEP
1.6.3 List of Selected Product Categories
The selection of the final list of product categories is based on the top three rankings on the
quantitative indicators and commonality between wholesale and retail trade services, which is also
crossed referenced with other jurisdiction studies. The market review focus is on basic necessities
for consumers namely, 1) processed F&B products, 2) personal care products, 3) household
cleaning products, and 4) clothing.
The following tables show the selected MSIC codes under wholesale and retail trade services for
this market review.
Table 13: Wholesale Trade MSIC Codes Covered in the Market Review
No MSIC Code Description
1. 46321 Wholesale of rice, other grains, flour and sugars
2. 46322 Wholesale of dairy products
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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No MSIC Code Description
3. 46323 Wholesale of confectionary
4. 46324 Wholesale of biscuits, cakes, breads, and other bakery products
5. 46325 Wholesale of coffee, tea, cocoa, and other
beverages
6. 46329 Wholesale of other foodstuffs
7. 46413 Wholesale of clothing
8. 46419 Wholesale of textiles, clothing n.e.c.
9. 46422 Wholesale of perfumeries, cosmetics, soap and toiletries
Table 14: Retail Trade MSIC Codes Covered in the Market Review
No MSIC Code Description
1 47111 Provision stores
2 47112 Supermarket
3 47113 Mini market
4 47114 Convenience stores
5 47191 Department stores
6 47192 Department stores and supermarket
7 47193 Hypermarket
8 47194 Newsagent and miscellaneous goods store
9 47199 Other retail sales in non-specialised stores n.e.c.
10 47211 Retail sale of rice, flour, other grains and sugars in specialised
stores
11 47213 Retail sale of dairy products and eggs in specialised stores
12 47216 Retail sale of bakery products and sugar confectionery in
specialised stores
13 47217 Retail sale of mee, kuey teow, mee hoon, wantan skins, and other
food products made from flour or soya in specialised stores
14 47219 Retail sale of other food products n.e.c. in specialised stores
15 47222 Retail sale of tea, coffee, soft drinks, mineral water, and other
beverages in specialised stores
16 47510 Retail sale of textiles in specialised stores
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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37
No MSIC Code Description
17 47711 Retail sale of articles of clothing, articles of fur, and clothing
accessories
18 47722 Stores specialised in the retail sale of perfumery, cosmetics, and
toilet articles
1.7 Report Outline
The draft final report contains nine chapters, including the Appendix. Chapter 1 provides an
introduction to this market review. In chapter 2, a brief overview of the Malaysian economy and
services sector is covered along with an overview of Malaysia‟s wholesale and retail trade services
industry. Chapters 3, 4, 5, and 6, a detailed market assessment of the selected products, namely
F&B, personal care & toiletries, household cleaning products, and clothing are covered. Chapter 7
looks into competition assessment, covering market concentration and potential competition
concerns in wholesale and retail trade, Chapter 8 provides preliminary recommendations to address
issues and areas of concern, and finally, Chapter 9 is the Appendix that details findings from the
industry and consumer surveys.
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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2 OVERVIEW OF THE MALAYSIAN ECONOMY AND SERVICES SECTOR
2.1 Overall Macroeconomic Trends
2.1.1 Gross Domestic Product
From an economy dominated by the production of primary natural resources, including tin and
rubber in the 1960s, Malaysia has since evolved to become one that is increasingly highly
diversified, to include robust manufacturing activities and a vibrant services sector. In 2018,
Malaysia‟s GDP stood at RM1,361.53 billion with the services and manufacturing sectors collectively
contributing to over 79%. The country‟s economy reported a 4.7% growth in 2018 amid a slowdown
in the global economy and change in government following the general election, and together with it,
new policy initiatives and reforms. In 2018, the services sector reported the highest growth of 6.8%,
followed by manufacturing at 5.0%, and construction at 4.2%. The agriculture sector saw less than
1% increase while mining and quarrying witnessed negative growth of -2.6%.3
In terms of contribution, the services sector was the highest contributor to the Malaysian economy.
In 2018, the value-added of the services sector was an estimated RM771.9 billion, contributing
56.7% to the national GDP.4
Figure 5: Contribution to GDP at Constant 2015 Prices, Malaysia, 2015–2018
Source: DOSM
3 DOSM
4 DOSM
97.5 94.0 99.4 99.5 103.1 105.4 105.8 103.1
262.4 273.9 290.5 304.8
55.4 59.5 63.5 66.2
643.9 680.6 722.6 771.9
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
2015 2016 2017e 2018p
RM
Billio
n
Agriculture Mining and quarrying Manufacturing Construction Services
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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2.1.2 Labour Indicators
Between 2016 and 2018, annual employment grew at a CAGR of 1.9% to reach 14.8 million in 2018
which is comparatively lower to GDP growth. During this period, the services sector saw the highest
growth of 2.9% in employment while the slowest growth was in the mining and quarrying sector (-
4.4%).
Figure 6: Annual Employment by Kind of Economic Activity, 2015 - 2018
Source: DOSM
In terms of types of professions, in 2018 it was estimated that 23.2% of those employed were
engaged as service and sales workers while 12.4% of them were involved in elementary
occupations and 12.3% were professionals.
Figure 7: Employed Persons by Occupation, Malaysia, 2018
Source: DOSM
1,876 1,775 1,839 1,844 79 73 73 69
2,379 2,391 2,441 2,502
1,517 1,498 1,497 1,509
8,141 8,439 8,601 8,880
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2015 2016 2017e 2018p
An
nu
al
em
plo
yen
t ('
000)
Services
Construction
Manufacturing
Mining and quarrying
Agriculture
Managers 4.5% Professionals
12.3% Technicians
and associate
professionals 10.4%
Clerical support workers
8.4%
Service and sales workers
23.2% Skilled
agricultural, forestry, livestock
and fishery workers
6.2%
Craft and related trades
workers 10.5%
Plant and machine
operators and assemblers
12.1%
Elementary occupations
12.4%
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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2.1.3 Productivity
Overall labour productivity grew at 2.2%, reaching RM91,972 in 2018, from RM89,953 in 2017. Over
the same period, the labour market remained stable, expanding by 2.4% to reach 14.8 million
persons, mainly driven by the services sector, which constituted nearly 60% of the total jobs
created.5 The figure below shows Malaysia‟s labour productivity performance from 2014 to 2018.
Figure 8: Labour Productivity Trends, Malaysia, 2014–2018
Source: Malaysia Productivity Corporation
5 Malaysia Productivity Corporation
81,274 84,115 86,712 89,952 91,971
3.6% 3.5%
3.1%
3.7%
2.2%
2.3%
1.5% 1.3%
1.9%
2.4%
6.0%
5.1%
4.4%
5.7%
4.7%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
74,000
76,000
78,000
80,000
82,000
84,000
86,000
88,000
90,000
92,000
94,000
2014 2015 2016 2017 2018
Gro
wth
RM
Labour Productivity Labour Productivity Growth
Employment Growth GDP Growth
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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In 2018, the services sector saw the highest productivity growth of 3.5%, closely followed by the
construction sector with an increase of 3.4% and manufacturing at 2.4% growth. In terms of
productivity levels, manufacturing stood highest at RM121,841, followed by services at RM86,921
and agriculture at RM53,943, while construction had the lowest productivity level at RM43,882.6
Figure 9: Labour Productivity Growth by Key Economic Sectors, Malaysia, 2016–2019
Source: Malaysia Productivity Corporation
6 Malaysia Productivity Corporation
2
4.2 3.5
-2
0
2
4
6
8
10
12
2016 2017e 2018p
Gro
wth
(%
)
Labour Productivity Growth Agriculture
Mining and quarrying Manufacturing
Construction Services
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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2.1.4 Consumer Price Index
Malaysia‟s CPI is broken down into 12 categories, with the weightage of each category shown
below.
Figure 10: Weightage of Categories covered in Malaysia’s CPI
Source: DOSM
Food and non-alcoholic beverages
29.5%
Alcoholic beverages and tobacco
2.4%
Clothing and footwear 3.2%
Housing, water, electricity, gas and
other fuels 23.8% Furnishings,
household equipment and routine household
maintenance 4.1%
Health 1.9%
Transport 14.6%
Communications 4.8%
Recreation services and culture
4.8%
Education 1.3%
Restaurants and hotels 2.9%
Miscellaneous goods and services
6.7%
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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The following figure displays the CPI of Malaysia and selected product group index trends from
December 2010 to December 2019. During this period, overall CPI recorded a CAGR of 2.1%, food
and non-alcoholic beverages at a CAGR of 3.1%, goods and services for routine household
maintenance at 2.5%, and personal care & toiletries at 1.5% while clothing saw a decline at -0.6%.7
Figure 11: Consumer Price Index, Malaysia, 2011–2019
Source: Frost & Sullivan analysis based on DOSM
2.1.5 Household Expenditure
Household expenditure was seen to be highest on housing, water, electricity, gas and other fuels
(24.0%), followed by food and non-alcoholic beverages.
The mean household expenditure grew at a CAGR of 6.2% between 014 and 2014 and stood at
RM4,034. The change was driven by education (14.8%), health (12.7%), and furnishings, household
equipment and routine household maintenance (10.7%) which saw double-digit growth in household
expenditure between 2014 and 2016. During the same period, expenditure on transport,
communication, and food and non-alcoholic beverages increased at a lower CAGR of 2.8%, 3.6%,
and 3.6% respectively.
7 DOSM
70
80
90
100
110
120
130
140
2010Dec
2011Dec
2012Dec
2013Dec
2014Dec
2015Dec
2016Dec
2017Dec
2018Dec
2019Dec
CPI (100%)
Food and non-alcoholic beverages index (29.5%)
Clothing (3.2%)
Goods & services for routine household maintenance (1.9%)
Personal care (3.3%)
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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Figure 12: Mean Household Expenditure Trend, Malaysia (2009/10, 2014,2016)
Source: DOSM
Table 15: Mean Household Expenditure Comparison, Malaysia (2014-2016)
No. Expenditure Group
2014 2016 Changes
between
2014 and
2016
RM % Share RM % Share
1 Food and non-alcoholic beverages 676 18.9% 726 18.0% 3.6%
2 Alcoholic beverages and tobacco 83 2.3% 98 2.4% 8.7%
3 Clothing and footwear 124 3.5% 136 3.4% 4.7%
4 Housing, water, electricity, gas and
other fuels 853 23.8% 969 24.0% 6.6%
5 Furnishings, household equipment &
routine household maintenance 137 3.8% 168 4.2% 10.7%
6 Health 59 1.6% 75 1.9% 12.7%
7 Transport 523 14.6% 553 13.7% 2.8%
444.00 676.00 726.00
495.00
853.00 969.00
327.00
523.00
553.00
239.00
454.00
540.00
190.00
266.00
312.00
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2009/10 2014 2016
RM
Miscellaneous goods and services
Restaurants and hotels
Education
Recreation services and culture
Communication
Transport
Health
Furnishings, household equipment& routine household maintenance
Housing, water, electricity, gas andother fuels
Clothing and footwear
Alcoholic beverages and tobacco
Food and non-alcoholic beverages
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
Malaysia (Wholesale and Retail for Selected Products)
45
No. Expenditure Group
2014 2016 Changes
between
2014 and
2016
RM % Share RM % Share
8 Communication 189 5.3% 203 5.0% 3.6%
9 Recreation services and culture 174 4.9% 200 5.0% 7.2%
10 Education 41 1.1% 54 1.3% 14.8%
11 Restaurants and hotels 454 12.7% 540 13.4% 9.1%
12 Miscellaneous goods and services 266 7.4% 312 7.7% 8.3%
Total 3,579
4,034 6.2%
Source: DOSM
2.1.5.1 Share of Household Expenditure on Selected Products
The household spending on selected products covered in this market review contributed to 24.1%.
Other appliances, articles and products for personal care (2.9%), garments (2.4%), Fresh fish
(2.2%), and fresh meat (1.9%) represented the highest spending by Malaysian household in 2016.
In terms of growth, Fresh and reconstituted milk saw the highest growth, grew at CAGR of 22.9%
between 2014 and 2016 while during the same period Evaporated/condensed milk declined by 1.0%
which could indicate that households are becoming health conscious by shifting towards purchasing
fresh milk. To further strengthen this trend, it can be noted that spending on sugar was among the
top decliners and saw a decline of 5.3% while packaged Mineral water, soft drinks, fruits, and
vegetable juices saw a marginal decline during this period.
Table 16: Mean Household Expenditure on Selected Products Comparison, Malaysia (2014-2016)
Subgroups of expenditure
2016 2014 Changes (RM) (%) (RM) (%)
Group Household Expenditure 4,032.98 100.0%
3,577.60 100.0% 6.2%
0111 Rice 43.96 1.1% 42.08 1.2% 2.2%
0112 Flour and other cereals 15.28 0.4% 13.43 0.4% 6.6%
0113 Biscuits 19.99 0.5% 17.80 0.5% 6.0%
0114 Bread and bakery products 50.53 1.3% 46.48 1.3% 4.3%
0115 Other products made from cereal grains
11.62 0.3% 10.93 0.3% 3.1%
0121 Fresh meat 77.24 1.9% 76.57 2.1% 0.4%
0122 Frozen meat 10.13 0.3% 9.81 0.3% 1.6%
0123 Processed meat 16.66 0.4% 14.54 0.4% 7.0%
0131 Fresh fish 90.65 2.2% 90.09 2.5% 0.3%
0132 Fresh seafood 46.20 1.1% 40.90 1.1% 6.3%
0133 Processed fish and seafood 20.69 0.5% 19.18 0.5% 3.9%
0141 Fresh and reconstituted milk 6.74 0.2% 4.46 0.1% 22.9%
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
Malaysia (Wholesale and Retail for Selected Products)
46
Subgroups of expenditure
2016 2014 Changes (RM) (%) (RM) (%)
0142 Evaporated/condensed milk 7.46 0.2% 7.60 0.2% -1.0%
0143 Milk powder and other dairy products
30.50 0.8% 30.06 0.8% 0.7%
0144 Eggs 14.47 0.4% 14.28 0.4% 0.7%
0151 Butter, fat and prepared animal oils
1.77 0.0% 1.32 0.0% 15.6%
0152 Oils 16.91 0.4% 13.70 0.4% 11.1%
0153 Margarine, peanut butter, etc. 2.84 0.1% 2.29 0.1% 11.5%
0161 Fresh fruit 35.28 0.9% 29.09 0.8% 10.1%
0162 Preserved fruit 3.18 0.1% 2.53 0.1% 12.2%
0163 Coconut and nuts 9.31 0.2% 7.07 0.2% 14.8%
0171 Fresh vegetables 71.13 1.8% 68.37 1.9% 2.0%
0172 Preserved vegetables 5.95 0.1% 5.59 0.2% 3.2%
0173 Potatoes and other tubers 7.00 0.2% 6.10 0.2% 7.1%
0181 Sugar 7.30 0.2% 8.14 0.2% -5.3%
0182 Chocolate, sweets and ice cream
12.04 0.3% 11.48 0.3% 2.4%
0183 Jam, honey, etc. 5.23 0.1% 3.58 0.1% 20.8%
0191 Spices 19.92 0.5% 15.60 0.4% 13.0%
0192 Other foods 19.70 0.5% 16.38 0.5% 9.7%
0193 Sundry goods 3.29 0.1% 3.72 0.1% -5.9%
0101 Coffee 8.35 0.2% 8.09 0.2% 1.6%
0102 Tea, cocoa, etc. 16.34 0.4% 15.84 0.4% 1.6%
0103 Mineral water, soft drinks, fruits and vegetable juices
18.68 0.5% 18.71 0.5% -0.1%
0311 Clothing materials 2.64 0.1% 2.50 0.1% 2.9%
0312 Garments 95.36 2.4% 87.86 2.5% 4.2%
0313 Other articles of clothing and clothing accessories
6.46 0.2% 5.90 0.2% 4.6%
0314 Cleaning, repair and hire of clothing
4.62 0.1% 3.88 0.1% 9.1%
0561 Non-durable household goods 39.83 1.0% 32.57 0.9% 10.6%
1213 Other appliances, articles and products for personal care
114.95 2.9% 96.80 2.7% 9.0%
Source: DOSM
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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47
Figure 13: Mean Household Expenditure of Selected Products, Malaysia (2014-2016)
Source: DOSM
-
20.00
40.00
60.00
80.00
100.00
120.00
140.00
Ric
e
Flo
ur
and o
ther
cere
als
Bis
cuits
Bre
ad a
nd b
akery
pro
ducts
Oth
er
pro
ducts
made f
rom
cere
al gra
ins
Fre
sh m
eat
Fro
zen
me
at
Pro
cessed m
eat
Fre
sh f
ish
Fre
sh s
eafo
od
Pro
cessed fis
h a
nd s
eafo
od
Fre
sh a
nd r
econ
stitu
ted
milk
Evapora
ted/c
ondensed m
ilk
Milk
pow
der
and o
ther
dairy p
roducts
Eg
gs
Bu
tter,
fat and p
repare
d a
nim
al oils
Oils
Ma
rgarin
e, pea
nut butter,
etc
.
Fre
sh f
ruit
Pre
serv
ed fru
it
Coconut and n
uts
Fre
sh v
ege
table
s
Pre
serv
ed v
egeta
ble
s
Po
tato
es a
nd o
ther
tubers
Su
gar
Chocola
te, sw
eets
an
d ice c
ream
Jam
, honey, etc
.
Sp
ices
Oth
er
foods
Su
ndry
goods
Coffee
Te
a, cocoa, etc
.
Min
era
l w
ate
r, s
oft d
rinks, fr
uits a
nd
veg
eta
ble
ju
ices
Clo
thin
g m
ate
rials
Garm
ents
Oth
er
art
icle
s o
f c
loth
ing
and c
loth
ing a
ccessorie
s
Cle
anin
g, re
pair a
nd h
ire o
f clo
thin
g
Non-d
ura
ble
household
goods
Oth
er
ap
plia
nces, art
icle
s a
nd p
roducts
for
pe
rsonal care
RM
2014 2016
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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48
2.2 Services Sector in Malaysia
2.2.1 GDP Contribution
The services sector was the highest contributor to the Malaysian economy in 2018, with the value-
added estimated at RM771.9 billion, contributing 56.7% to national GDP.8
Within this sector, wholesale and retail trade contributed close to one-third of the sector, as shown
below.9
Figure 14: Services Sub-Sectors’ Contribution to the Services Sector GDP, Malaysia, 2015–2018
Source: DOSM
8 DOSM
9 DOSM
29%
29%
29%
29%
15%
15%
15%
15%
10%
10%
10%
10%
9%
9%
9%
8%
7%
7%
7%
7%
6%
6%
6%
6%
5%
5%
5%
6%
5%
5%
5%
5%
15%
15%
14%
14%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2015
2016
2017e
2018p
Wholesale and retail trade Government services
Information and communication Finance
Transportation and storage Food & beverage and accommodation
Business services Utilities
Others
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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49
As shown in the following figure, the services sector has seen higher growth than the overall national
GDP growth in the past three years, increasing at 6.8% in 2018. The wholesale and retail industry
witnessed a growth of 8.1% in 2018.10
Growth has been driven by private consumption despite
cautious spending by consumers amid continued uncertainties in business outlook and rising living
costs.
Figure 15: Overall GDP and Services Sector Growth Trends, Malaysia, 2016–2018
Source: DOSM
10 DOSM
4.4%
5.7% 4.7%
5.7%
6.2%
6.8%
6.3%
7.1%
8.1%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
2016 2017 2018
Gro
wth
%
GDP growth (Overall) Services sector growth
Wholesale and retail trade growth
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in
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50
2.2.2 Labour Indicators
Within the services sector, the WRT contributed to 27.6% of total employment in 2018. Wholesale
and retail trade provides immense job opportunities in any economy as it does not require formal
education. Between 2016 and 2018, employment in WRT grew at a CAGR of 4.8% when compared
to the overall services sector which grew at 2.9%. The faster growth can be attributed to the opening
of new stores due to the increasing demand for goods.
Figure 16: Breakdown of Employment by Services Sector, Malaysia, 2018
Source: DOSM
Utilities 1.1% Wholesale and
retail trade 27.6%
Food & beverages and accommodation
17.1%
Transportation and storage
5.9%
Information and communication
2.5%
Finance and insurance
4.1%
Real estate and business services 12.3%
Other services 29.3%
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2.2.3 Productivity Performance
Growth in the services sector labour productivity has been driven by the wholesale and retail trade
industry, increasing at 4.8% in 2018 compared to 2.9% in 2017, followed by information and
communication at 4.5%.11
Figure 17: Services Sector Labour Productivity Growth, Malaysia, 2016–2018
Source: DOSM
Discussions with the MPC have highlighted the following challenges impacting the wholesale and
retail trade industry:
1. Workforce – High turnover mainly due to long working hours; companies are unable to attract
graduates or skilled locals, and as a result, are highly dependent on low-skilled foreign
workers.
2. Technology – SMEs employ traditional processes and may not even have POS systems; on
the contrary, large players heavily invest in technology and digitisation platforms. SMEs do
not find the need to invest in technology as they only view it as a cost and not long-term
investment.
3. Productivity/efficiency tracking – SMEs prioritise profitability and do not consider productivity
and efficiency as important considerations. They also rarely send their workers for training as
they do not believe it is necessary.
4. Participants also pointed out the lack of negotiation and business communication skills
among local graduates, prompting many companies to hire skilled foreigners instead.
11 DOSM
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
2016 2017e 2018p
Services
Utilities
Wholesale and retail trade
Food & beverages andaccommodation
Transportation and storage
Information andcommunication
Finance and insurance
Real estate and businessservices
Other services
Draft Final Report: Market Review under The Competition Act 2010 for Service Sector in Malaysia (Wholesale and Retail for
Selected Products)
2.2.4 Investment Performance
The following table shows the approved private investments in the services sector in 2018 and 2019 (January to September). Between
January and September 2019, a total of 3,299 investments were approved, of which wholesale and retail trade reported the highest
approval rates, representing more than one-third of total approvals.
The wholesale and retail trade industry saw growth close to 61% in investment approvals during this period. Also, the wholesale and retail
trade industry obtained the highest foreign investment approvals, with the potential of generating more than 77% employment opportunities
in total services sector investments approved from January to September 2019,12
indicating the importance of this sub-sector to the overall
economy.
Table 17: Approved Investments in the Services Sub-Sector, Malaysia, 2018–2019
Summary Number Potential
Employment
Domestic
Investment
(RM million)
Foreign Investment
(RM million)
Total Investment
(RM million)
Services Sub-sector Jan-
Sept
2019
2018 Jan-
Sept
2019
2018 Jan-Sept
2019
2018 Jan-Sept
2019
2018 Jan-Sept
2019
2018
Global Establishments 126 204 884 2010 0 3080.1 11,677 4,378.3 11,677 7,458.4
Support Services 449 346 1,934 4,278 2,558 4,381.9 817.1 652.1 3,375.1 5,034
MSC Status 0 107 0 3,339 0 729.6 0 341.9 0 1,071.5
Transport 6 12 0 0 290.2 578.3 36.1 220.5 326.3 798.9
Real Estate 936 968 NA NA 29,730.4 45,147.5 0 2,742.4 29,730.4 47,890
Utilities NA NA 3 10 19,178.7 9,836.1 0 0 19,178.7 9,836.1
Telecommunication 234 508 NA NA 2,727.4 8,613.5 0 0 2,727.4 8,613.5
12 MIDA
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Summary Number Potential
Employment
Domestic
Investment
(RM million)
Foreign Investment
(RM million)
Total Investment
(RM million)
Wholesale and Retail
Trade
1,044 1,263 29,790 43,676 1,148.9 2,409.7 10,525.4 4,847.4 11,674.4 7,257
Hotel and Tourism 52 63 3,660 4,135 2,962.6 3,925.4 80.4 716.7 3,043 4,642.1
Financial Services 16 47 97 105 2,321.6 8,950.9 505.4 744.4 2,827 9,695.3
Health Services 5 11 275 4,374 90 1,647.2 43.4 986.2 133.4 2,633.4
Education Services 429 704 2,160 6,837 235 682.7 80.4 447.3 315.4 1,130
Other Services 2 1 60 28 0.3 10.7 40 0 40.2 10.7
Total 3,299 4,234 38,863 68,792 61,242.9 89,993.5 23,805.1 16,077.2 85,048.1 106,070.7
Source: Malaysian Investment Development Authority (MIDA)
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2.3 Overview of the Wholesale and Retail Trade Industry
2.3.1 Number of Establishments
According to the latest WRT census published by DOSM, there were in total 468,930 establishments
in WRT as of 2018, a 26% increase from 2013. 70% of these companies were involved in retail
trade, while 17% were in wholesale trade and the remaining 13% were in motor vehicles trade.
Among these three sub-sectors, wholesale trade grew the fastest in terms of the number of
establishments, at a compound annual growth rate (CAGR) of 6.8% from 2013 to 2018. This was
followed by retail trade sub-sector, at a CAGR of 4.7% within the same period.
Figure 18: Number of Establishments in WRT, Malaysia (2013 and 2018)
CAGR 2013-18P 4.8% 6.8% 4.7% 3.3%
Source: DOSM – Preliminary Report of Wholesale and Retail Trade Census, 2019
370,725
57,050
260,664
53,011
468,930
79,334
327,209
62,387
Total Wholesale trade Retail trade Motor vehicles
2013
2018P
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More than 160,000 of these companies in WRT (35%) are located Klang Valley (Selangor and Kuala
Lumpur), followed by Johor (10%), Perak (8%), Sabah (7%), Sarawak (7%) and Penang (7%).
Figure 19: Number of Establishments in WRT by State (2018)
Source: DOSM – Preliminary Report of Wholesale and Retail Trade Census, 2019
Within the wholesale trade sub-sector, there were 79,334 establishments as of 2018. Most of these
companies are located in Klang Valley (44%) and Johor (13%).
Figure 20: Number of Establishments in Wholesale Trade Sub-sector by State (2018)
Source: DOSM – Preliminary Report of Wholesale and Retail Trade Census, 2019
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In 2018, there were 327,209 companies in the retail trade sub-sector. 34% of these companies are located in Klang Valley, whereas Sabah, Johor, Perak, Sarawak, and Kelantan are each home to around 7%-9% of the companies.
Figure 21: Number of Establishments in Retail Trade Sub-sector by State (2018)
Source: DOSM – Preliminary Report of Wholesale and Retail Trade Census, 2019
The WRT sector consists of mainly SMEs, with 80% of the establishments are micro-sized company
and 18% of them are small-sized companies. Medium and large companies only made up 1% each.
Figure 22: Breakdown of Establishments in WRT by Firm Size (2015)
Source: Frost & Sullivan‟s Analysis based on DOSM‟s Economic Census 2016 - Profile of SMEs and
Establishment Statistics
Micro 80%
Small 18%
Medium 1%
Large 1%
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2.3.2 Employment
In 2018, close to 2 million people were engaged in the WRT of which 59% of them were engaged in
the retail trade establishments while 26% were engaged in wholesale trade. Between 2013 and
2018, the total number of persons engaged in WRT grew at a CAGR of 3.3%, mainly driven by retail
trade sub-sector which saw a CAGR of 3.5% within the same period.
On average, each wholesale trade establishment engaged around 6 to 7 persons, whereas 3 to 4
persons were engaged in a retail trade establishment.
Figure 23: Number of Persons Engaged in WRT During December or the Last Pay Period, Malaysia (2013 and 2018)
CAGR 2013-18P 3.3% 3.2% 3.5% 2.7%
Average number
of person
engaged per
establishment
(2018P)
4.3 6.5 3.6 4.9
Source: Frost & Sullivan‟s Analysis based on DOSM‟s Preliminary Report of Wholesale and Retail
Trade Census, 2019
1,700
443
989
268
1,998
519
1,173
306
Total Wholesale trade Retail trade Motor vehicles
2013
2018P
('000)
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In the WRT, 74% of the persons engaged in 2018 are full-time employees. Wholesale trade sub-
sector tends to hire more full-time employees as compared retail trade sub-sector.
Figure 24: Breakdown of Persons Engaged in WRT by type of Engagement (2018)
Source: DOSM – Preliminary Report of Wholesale and Retail Trade Census, 2019
In WRT, 10% of employed persons are non-Malaysians. The WRT ranked 8th out of 20 industries in
terms of the highest ratio of non-Malaysian employment.
Figure 25: Distribution of Employed Person in WRT by Nationality
Source: DOSM – Labour Force Survey Report 2018
20%
10%
26%
18%
74%
84%
69%
78%
5%
6%
5%
3%
TOTAL
Wholesale Trade
Retail Trade
Motor Vehicles
Working proprietors & unpaid family workers Full time employees Part time employees
Malaysian Citizen 90%
Non-Malaysian Citizen 10%
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In 2019, in order to address the difficulties faced by the industry players, the government has lifted
the freeze on foreign worker intake in the wholesale and retail trade sector imposed since 2009.
Industry players that fulfill the following terms and conditions are now able to apply for foreign
workers13
:
i) The number of foreign workers hired is only limited to 15% of the total employment;
ii) Only supermarket premises with a floor size of more than 2,500 square metres (sqm) and
distribution/storage center are allowed to apply/hire foreign workers in this sector;
iii) Job positions that are allowed for the hiring of foreign workers are as following:
a. Shelf fillers/food processing workers for supermarket; and
b. Freight workers and storage labourers for distribution / storage center;
iv) For distribution/storage center, the hiring of foreign labours are only allowed in the wholesale
and retail business owned by the company, whether it is in owned premises or rented
premises. The hiring of foreign workers is disallowed for contractor companies or warehouse
operators; and
v) Applications must be submitted together with the company‟s exit policy of foreign workers‟
management.
13 Source: Ministry of Home Affairs (MOHA), Notis Makluman - Pengambilan Pekerja Asing dalam
Sektor Perkhidmatan Borong dan Runcit, 19 November 2019
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2.3.3 Performance
The WRT sector generated total revenue of RM1,321.74 billion in 2018, which registered a CAGR of
8.2% since 2013. This is a faster growth rate as compared to the CAGR of 6.6% between 2008 and
2013.
In 2018, 51% of the WRT revenue was contributed by the wholesale trade sub-sector, whereas the
retail trade sub-sector contributed 37%. Nonetheless, the total revenue in the retail trade sub-sector
grew at a faster pace (9.5%) than wholesale trade (8.4%) between 2013 and 2018.
In spite of retail trade representing close to 70% of the WRT establishments, the average revenue
contribution per establishment was the lowest in WRT at RM1.51 million. On the contrary, wholesale
trade generated RM8.48 million per establishments. This can be attributed to the characteristics of
wholesale trade which deals in bulk sales as compared to retail trade.
Figure 26: Total Revenue in WRT, Malaysia (2013 and 2018)
CAGR 2013-18P 8.2% 8.4% 9.5% 3.8%
Average revenue
per establishment
(2018P)
RM2.82 mil RM8.48 mil RM1.51 mil RM2.47 mil
Source: Frost & Sullivan‟s Analysis based on DOSM‟s Preliminary Report of Wholesale and Retail
Trade Census, 2019
893
450
315
128
1322
672
495
154
Total Wholesale trade Retail trade Motor vehicles
2013
2018P
(RM billion)
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In tandem with the revenue growth, the WRT sector experienced similar growth rate in terms of
expenditure between 2013 and2018.
Figure 27: Total Expenditure in WRT, Malaysia (2013 and 2018)
CAGR 2013-18P 8.2% 8.0% 9.9% 4.5%
Average
expenditure per
establishment
(2018P)
RM2.43 mil RM7.50 mil RM1.23 mil RM2.27 mil
Source: Frost & Sullivan‟s Analysis based on DOSM‟s Preliminary Report of Wholesale and Retail
Trade Census, 2019
2.3.4 Wholesale Trade
2.3.4.1 Definition14
Wholesale trade refers to the resale (sale without transformation) of new and used goods to
retailers; industrial, commercial, institutional or professional users; or to other wholesalers; or selling
merchandise to, such persons or companies.
Wholesalers frequently physically assemble, sort and grade goods in large lots; break bulk, repack
and bottle (except in air-tight containers) and redistribute in smaller lots; store, refrigerate, deliver
and install goods as well as engage in sales promotion for customers and label design.
14 Source: DOSM - Preliminary Report of Wholesale and Retail Trade Census, 2019
769
405
250
113
1,139
595
402
141
Total Wholesale trade Retail trade Motor vehicles
2013
2018P
(RM billion)
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The main types of operations for the Wholesale trade are as follows:
Merchant wholesalers
Merchant wholesalers are those who take title to the goods they sell, such as wholesale merchants
or jobbers, industrial distributors, exporters, importers, terminal elevators, and co-operative buying
associations, petroleum bulk station or terminals. Assemblers, buyers and co-operative associations
engaged in the marketing of farm products, scrap metal, waste and junk dealers and yards are
included as well.
Sales offices and sales branches
Refers to establishments, other than retail stores, which are maintained by manufacturing or mining
enterprises, apart from their plants or mines, for the purpose of marketing their products and which
do not merely take orders to be filled by direct shipments from plants or mines. Such establishments
are covered if they maintain separate distributive trades‟ accounts.
Agents or brokers
Include merchandise and commodity brokers, commission merchants and agents which involve in
wholesale activities. They do not take title to the goods they sell but instead work on the basis of
commissions and fees, through buying and selling on the accounts of others.
2.3.4.2 Classification of Wholesale Trade
Wholesalers are classified into the following categories:
Wholesale on a fee or contract basis;
Wholesale of agricultural raw materials and live animals (grain, seeds, animal feeds,
flowers, plants, live animals, hides, skin, leather);
Wholesale of food, beverages, and tobacco;
Wholesale of household goods (textiles, clothing, footwear, other household goods);
Wholesale of machinery, equipment, and supplies (computers, electronics, agriculture
machinery, others);
Other specialised wholesale (gaseous fuels, metals, construction materials); and
Non-specialised wholesale trade.
Source: DOSM
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2.3.4.3 Performance of Wholesale Trade in Malaysia
Number of Establishments
„Wholesale of household goods (textiles, clothing, footwear, other household goods)‟ represented
26% of the total number of establishments under Wholesale trade. In terms of growth, the number of
establishments under „Other specialised wholesale (gaseous fuels, metals, construction materials)‟
grew at a CAGR of 8.8% between 2013 and 2018 while Wholesale of food, beverages, and tobacco
saw modest growth of 6.8% during the same period.
Figure 28: Number of Establishments under Wholesale Trade sub-industry
Source: Preliminary findings on the Wholesale and Retail Trade Census, DOSM 2019
1,183
4,762
10,011
14,937
9,925
10,546
5,686
1,352
6,887
13,932
20,412
13,566
16,065
7,120
0 20,000 40,000
Wholesale on a fee or contract basis
Wholesale of agricultural raw materials andlive animals
Wholesale of food, beverages and tobacco
Wholesale of household goods
Wholesale of machinery, equipment andsupplies
Other specialised wholesale
Non-specialised wholesale trade
Number of establishments
2018
2013
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Revenue Contribution
„Other specialised wholesale‟ contributed 43.0% of revenue to wholesale trade followed by
„Wholesale of household goods‟ (17.8%) and „Wholesale of food, beverages, and tobacco‟ (16.9%).
Between 2013 and 2018, „Other specialised wholesale‟ saw the fastest CAGR growth of 10.5% while
„Wholesale of household goods‟ grew at 8.9% and „Wholesale of food, beverages and tobacco‟ grew
at a CAGR of 8.1%.
The reasons attributing to higher growth in other specialised wholesale can be due to increased
construction activities and also the comparatively higher value of products covered under this
industry.
Figure 29: Revenue Breakdown of Wholesale Trade sub-industry
Source: Preliminary findings on the Wholesale and Retail Trade Census, DOSM 2019
9,920
41,918
76,891
78,277
54,602
175,388
12,891
14,824
47,714
113,566
119,816
70,422
288,815
17,269
0 200,000 400,000
Wholesale on a fee or contract basis
Wholesale of agricultural raw materials andlive animals
Wholesale of food, beverages and tobacco
Wholesale of household goods
Wholesale of machinery, equipment andsupplies
Other specialised wholesale
Non-specialised wholesale trade
Revenue in RM Million
2018
2013
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Expenditure
Wholesale trade expenditure grew at a CAGR of 8.0% between 2013 and 2018. During this period,
the expenditure of „Other specialised wholesale‟ grew faster at 10.0% while „Wholesale of
agricultural raw materials and live animals‟ expenditure was the lowest at 2.1%
Figure 30: Expenditure Breakdown of WholesaleTrade sub-industry
Source: Preliminary findings on the Wholesale and Retail Trade Census, DOSM 2019
2.3.4.4 Key Players in Wholesale Trade
Shown below are key wholesalers and distributors in Malaysia. Based on discussions with industry
participants, DKSH Malaysia is one of the most popular wholesalers in Malaysia.
No Wholesalers and Distributors Products Sold
1 DKSH Malaysia F&B, personal care & toiletries, household cleaning
products
2 Delfi Marketing F&B, personal care & toiletries, household cleaning
products
3 Kawan Food Food
4 Mydin F&B, personal care & toiletries, household cleaning
products, clothing
5 NSK Trade City F&B, personal care & toiletries, household cleaning
products
6 Segi Fresh F&B, personal care & toiletries, household cleaning
products
7 Checkers F&B, personal care & toiletries, household cleaning
6,064
39,152
70,895
69,610
48,453
159,538
11,337
9,483
43,494
104,331
103,838
61,790
257,365
14,962
0 200,000 400,000
Wholesale on a fee or contract basis
Wholesale of agricultural raw materials andlive animals
Wholesale of food, beverages and tobacco
Wholesale of household goods
Wholesale of machinery, equipment andsupplies
Other specialised wholesale
Non-specialised wholesale trade
Expenditure in RM Million
2018
2013
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No Wholesalers and Distributors Products Sold
products
8 Econsave F&B, personal care & toiletries, household cleaning
products, clothing
Source: Frost & Sullivan analysis based on various industry sources
2.3.5 Retail Trade
2.3.5.1 Definition15
Retail trade is defined as the resale (sale without transformation) of new and used goods mainly to
the general public for personal or household consumption or utilisation. It includes selling by shops,
department stores, stalls, mail-order houses, hawkers and peddlers, consumer co-operatives, online
and etc.
The main types of operations for the Retail trade are as follows:
Retailer
Refers to individual / company engaged in selling good activities to household and personal. Most
retailers take title to the goods they sell, but some act as an agent for a principal and sell either on
consignment or on a commission basis.
Chain or branches
Chain refers to two types or more establishments engaged in sametypes of business under single
ownership and control. Chain consists of branches under the ownership and control of a head office
within Malaysia. It does not include establishments within an enterprise but registered separately
with the Registrar of Business or Registrar of Companies. Neither are international chains included
unless they have two or more branches in Malaysia. For example Seng Hup, Jaya Jusco, Courts
Mammoth and others. A branch refers to two or more establishments engaged in the same types of
business under single ownership and control with its headquarters. It is directly managed by the
headquarters for the purpose of marketing and direct shipments of its products after receiving orders
from customers.
Agents or brokers
Include merchandise and commodity brokers, commission merchants and agents which involve in
wholesale activities. They do not take title to the goods they sell but instead work on the basis of
commissions and fees, through buying and selling on the accounts of others.
2.3.5.2 Classification of Retail Trade
Retail trade is classified into the following categories:
Retail sale in non-specialised stores with food, beverages, and tobacco;
Retail sale of food, beverages, and tobacco in specialised stores;
Retail sale of automotive fuel in specialised stores;
15 Source: DOSM - Preliminary Report of Wholesale and Retail Trade Census, 2019
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Retail sale of information and communication equipment in specialised stores (computers,
software, telecommunication);
Retail sale of other household equipment in specialised stores (textiles, hardware, paint,
glass, carpets, electrical);
Retail sale of cultural and recreation goods in specialised stores (books, music, sports,
games);
Retail sale of other goods in specialised stores (clothing, footwear, pharma, cosmetics, and
toiletries);
Retail sale via stalls and markets; and
Retail trade not in stores, stalls or markets.
Source: DOSM
2.3.5.3 Performance of Retail Trade in Malaysia
Number of Establishments
„Retail sale in non-specialised stores with food, beverages, and tobacco‟ represented 26.1% of total
establishments in 2018, followed by „Retail sale of other goods in specialised stores (clothing,
footwear, pharma, cosmetic, and toiletries)‟ (20.9%). Between 2013 and 2018, „Retail trade not in
stores, stalls or markets‟ saw the fastest growth of 12.8% CAGR. This industry represents retail
trade through e-commerce and currently only represents 2% of total establishments.
Figure 31: Number of Establishments under Retail Trade sub-industry
Source: Preliminary findings on the Wholesale and Retail Trade Census, DOSM 2019
69,976
41,146
3,727
21,512
36,953
19,876
55,892
8,012
3,570
85,463
46,044
4,370
28,044
52,118
25,758
68,332
10,563
6,517
0 50,000 100,000
Retail sale in non-specialised stores with food,beverages and tobacco
Retail sale of food, beverages and tobacco inspecialised stores
Retail sale of automotive fuel in specialisedstores
Retail sale of information and communicationequipment in specialised stores
Retail sale of other household equipment inspecialised stores
Retail sale of cultural and recreation goods inspecialised stores
Retail sale of other goods in specialisedstores
Retail sale via stalls and markets
Retail trade not in stores, stalls or markets
Number of establishments
2018
2013
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Revenue Contribution
Similar to the number of establishments, „Retail sale in non-specialised stores with food, beverages,
and tobacco‟ was the highest contributor to retail trade revenue at 31.5% in 2018. During 2013 and
2018, „Retail sale of other goods in specialised stores (clothing, footwear, pharma, cosmetic and
toiletries)‟ saw the highest growth in CAGR of 11.7%.
Figure 32: Revenue Breakdown of Retail Trade sub-industry
Source: Preliminary findings on the Wholesale and Retail Trade Census, DOSM 2019
97,509
18,541
33,797
33,562
45,308
16,754
65,200
735
3,588
155,740
26,939
50,149
47,185
69,517
25,839
113,438
992
5,131
0 100,000 200,000
Retail sale in non-specialised stores with food,beverages and tobacco
Retail sale of food, beverages and tobacco inspecialised stores
Retail sale of automotive fuel in specialised stores
Retail sale of information and communicationequipment in specialised stores
Retail sale of other household equipment inspecialised stores
Retail sale of cultural and recreation goods inspecialised stores
Retail sale of other goods in specialised stores
Retail sale via stalls and markets
Retail trade not in stores, stalls or markets
Revenue in RM Million
2018
2013
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Expenditure
Retail trade expenditure grew at a CAGR of 9.9% between 2013 and 2018. During this period, the
expenditure of „Retail sale of other goods in specialised stores (clothing, footwear, pharma, cosmetic
and toiletries)‟ grew fastest at 11.3% while „Retail sale via stalls and markets‟ expenditure was the
lowest at 5.6%.
Figure 33: Expenditure Breakdown of Retail Trade sub-industry
Source: Preliminary findings on the Wholesale and Retail Trade Census, DOSM 2019
2.3.5.4 Key Players in Retail Trade
Malaysia‟s retail trade has the presence of both local and foreign establishments. The types of
modern retail establishments prevalent in Malaysia include:
Hypermarkets: A standalone self-service distribution store with a sales floor area of 5,000 sqm or
more, selling a wide variety of mainly consumer goods, comprising a mix of food and non-food
products, in a range of transaction sizes or quantities, and different forms of packaging.
Supermarkets: A self-service shop offering a wide variety of food, beverages, and household
products, organised into sections.
Small format stores: Modern trade stores that appeal to today‟s on-the-go shopper. Small
supermarkets, mini-marts, convenience stores, and mom-and-pop stores all fall under this
category.
Mini markets: A store that sells selected food, and sometimes other goods, but it is not as big as
a supermarket or hypermarket.
Convenience stores: A small local store where you can buy food, newspapers, and daily
household items; it stays open till late or all the time.
73,180
13,084
25,425
25,889
39,247
12,824
56,828
704
3,288
121,939
21,531
39,291
38,675
58,371
19,484
97,183
924
4,982
0 100,000 200,000
Retail sale in non-specialised stores with food,beverages and tobacco
Retail sale of food, beverages and tobacco inspecialised stores
Retail sale of automotive fuel in specialisedstores
Retail sale of information and communicationequipment in specialised stores
Retail sale of other household equipment inspecialised stores
Retail sale of cultural and recreation goods inspecialised stores
Retail sale of other goods in specialisedstores
Retail sale via stalls and markets
Retail trade not in stores, stalls or markets
Expenditure in RM Million
2018
2013
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Superstores: A self-service distribution store with a sales floor area of 3,000 sqm to less than
4,999 sqm retailing a wide variety of mainly consumer goods, comprising a mix of food and non-
food products.
Departmental stores: Distribution store with a sales floor area of varying sizes, usually engaged
in retailing a vast assortment of consumer goods that are departmentalised by gender, age or
lifestyle, through self-service or with sales assistance, generally under a common store
management. A departmental store may include a supermarket of not more than 2,000 sqm.
Table 18: Popular Players in the Hypermarket and Supermarket Space, Malaysia
No Name Revenue
1. GCH Retail Malaysia Sdn Bhd RM4.6 billion (2017)
2. Tesco RM4.37 billion (2018)
3. Mydin RM2.54billion (2018)
4. Village Grocer RM17.9 million (2018)
5. AEON RM4.35 billion (2018)
6. NSK RM136.7 million (2018)
7. Econsave RM17.4 million (2018)
8. AEON Big RM1.68 billion (2018)
9. Trendcell Sdn Bhd (Jaya Grocer) RM573.4 million (2017)
Source: SSM and Company Annual Reports
Table 19: Popular Players in the Mini Market Space, Malaysia
No Name Revenue
1. 99 Speedmart (East Malaysia) Sdn
Bhd
RM189.9 million (2017)
2. 99 Speedmart Sdn Bhd RM3.4 billion (2018)16
3 KK Supermart RM728.7 million (2018)
Source: SSM, Company Annual Reports, News Articles
Table 20: Popular Players in the Convenience Store Space, Malaysia
No Name Revenue
1. 7Eleven RM2.22 billion (2018)
2. Family Mart NA17
(90 stores as of March 2019)
3. MyNews.com RM393.34 million (2018)
Source: Company Annual Reports
16 Source: http://bernama.com/en/news.php?id=1709166
17 As a franchising business, each franchisee of Family Mart has registered its business separately with a
different company name. The master franchisee of Family Mart in Malaysia, QL Resources Berhad, did not disclose the revenue of Family Mart in its annual report.
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2.3.6 Supply Chain
A supply chain is a system of organisations, people, activities, information, and resources involved in
moving a product or service from supplier to customer. Activities in a supply chain usually involve the
transformation of natural resources, raw materials, and components into a finished product before it
is delivered to the consumers.
The following table shows the key stakeholders involved in the traditional supply of selected product
categories.
Table 21: Key Stakeholders Across Supply of Selected Product Categories
Supply Chain Level Key Activities
Manufacturers (upstream)
Manufacturers are companies that make finished
products from raw materials and sell their output
to distributors, wholesalers, sourcing agents,
retailers or directly to consumers.
Distributors (midstream)
Distributors typically have a business
relationship with manufacturers that they
represent. Majority of distributors will maintain
exclusive buying agreements that limit the
number of participants or grant them the
exclusivity to cover the certain territory.
Distributors will normally buy non-competing
products or product lines, store them at their
warehouses or distribution centers. Distributors
are normally manufacturers‟ first point of contact
to customers and they usually work with
wholesalers, who will buy their stocks in large
quantities. Distributors resell them to retailers
and rarely sell directly to customers due to the
very large stocks that they deal with.
Wholesalers (midstream)
Wholesalers on the other, buy large quantities of
goods from various distributors, store them at
warehouses, and resell to retailers. Buying large
quantities typically will improve wholesalers‟
pricing and buying power. Most distributors or
manufacturers will provide discounts for a certain
quantity of products purchased.
Sourcing Agent/Agency
Sourcing agent/agency is essentially a link
between buyers (retailers) and suppliers
(manufacturers). Sourcing agents will normally
assist buyers in selecting the right suppliers,
price negotiation, following up on production,
quality control, product compliance, testing,
shipping, logistics, depending on the
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Supply Chain Level Key Activities
agreement/reached by both suppliers and
buyers. Sourcing agents also are known to be
beneficial to suppliers/ manufacturers by guiding
them in different market operations ranging from
marketing analysis, buying decisions, content
management, buying techniques, and spending.
Retailers (downstream)
Retailers consist of large and small businesses
that sell products directly to customers that can
be either brick-and-mortar stores as well as
online. The retailer can be traditional sundry
shops or modern store formats such as
supermarkets, hypermarkets, mini markets, and
convenience stores. Generally, retailers source
their products from wholesalers/distributors with
the most competitive pricing and sell back to
customers. There are instances where retailers
could source directly from manufacturers.
Source: Frost & Sullivan, based on interaction with industry participants
The general supply chain consists of the manufacturer, distributor, wholesaler, and retailer. The
supply chain for bigger retailers like hypermarkets is shorter while for standalone mini markets, it is
longer with more than one distributor and wholesaler. The variances in the supply chain depend on
the manufacturers‟ cost structure, ability to deliver, availability of warehouse/distribution centre,
product nature (i.e., ambient chain, cold chain, frozen chain) and retailers‟ order volume. Generally,
there are two types of supply chains; direct and indirect, which consists of two to three layers of
players within the supply chain as illustrated below.
Figure 34: WRT Supply Chain (except for Clothing)
Source: Frost & Sullivan, based on interaction with industry participants
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An indirect supply chain is the most common within the wholesale and retail trade, especially for sale
of imported products, smaller retailers, and retailers in rural areas. Indirect supply chain consists of
interaction with distributors and wholesalers, in which the distribution channel normally have varying
lengths depending on the manufacturers‟ requirements and needs, product nature
(ambient/cold/frozen), retailers‟ order volume, availability of warehouse/distribution centres, and
ability to get credit terms. Manufacturers, especially foreign participants, will usually appoint local
distributors to sell their products locally. The distributors can be pure distributors (conventional) or
logistic companies (e.g., Reckitt Benckiser appointed DHL as a distributor for some of its products)
to help manufacturers sell their products to wholesalers and retailers. Wholesalers are generally the
entity that serves small retailers, such as provisions stores, mini markets, and small sundry shops
that order in smaller quantities.
Direct supply chain, on the other hand, is a channel distribution where manufacturers have more
control over all aspects of distributions and typically have more direct interaction eliminating the
involvement of distributors and wholesalers within the channel. Most of the foreign retailers like
Tesco, Lulu and Giant, even local like 99 Speed Mart and KK Mart opt for this channel of distribution.
For this type of supply chain, both retailers and manufacturers establish an agreement (agreed
selling price at agreed quantity) prior to their engagement. The manufacturers either use their own
distribution centre or instruct appointed distributors to distribute the products to retailers' distribution
centres. Distribution prices, in this case, are generally lower than going through the conventional
distribution channel as there are fewer layers within the supply chain.
With the increasing adoption of e-commerce, there are increasing numbers of manufacturers that go
directly to customers through e-commerce platforms. In principle, the more layers in the supply
chain, the more expensive the products will be. The general trend is to cut down the layers as more
layers will squeeze profit margins.
Based on our observation and findings, the supply chain for three product categories under market
review; i.e., processed F&B, personal care & toiletries, and household cleaning products share
similar supply chain structures for both direct and indirect. Manufacturers and retailers for all three
product categories will either opt for indirect or direct distribution channels depending on the nature
of the product as well as the terms negotiated that suits their business model and strategy, as
illustrated in the figure above.
The clothing industry is an agile industry where fashion trends and market direction are evolving
constantly. The majority of manufacturers in this product category are adopting the co-creation
business model, in which manufacturers and retailers work closely with sourcing agents to gain
valuable insights to better understand the dynamic customer needs and trends. This concept allows
both manufacturers and retailers to provide customers the right product at the right time and at the
right cost. Hence, the clothing category has a slightly different structure than the general supply
chain discussed previously. Sourcing agents‟ role is to assist retailers in selecting the right suppliers,
negotiating price, following up on production, quality control, product compliance, testing, shipping,
and logistics, depending on the agreement reached by both manufacturers and retailers.
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Figure 35: Supply Chain for Clothing
Source: Frost & Sullivan, based on interaction with industry participants
On the manufacturer side, sourcing agents usually advise manufacturers on the current trends and
demands based on market intelligence (i.e., retailers). The manufacturers then produce the products
based on requests and inputs from sourcing agents (pull demand). In return, sourcing agents work
with retailers to get the products into the market. This type of supply chain eliminates
distributors/wholesalers and is found to be more cost-effective, as depicted by the figure above.
The difference between sourcing agent and distributor is that distributor purchases product at
wholesale price and resell the products at a marked-up price. While sourcing agent, on the other
hand, will reach out to a variety of suppliers/manufacturers, source the product the retailers need,
and make a commission out of the sale transactions.
2.3.7 Rules and Regulations Governing Wholesale and Retail Trade
2.3.7.1 Key Government Stakeholders
The following table provides a brief description of the roles and responsibilities of the relevant
ministries and agencies.
Table 22: Key Government Stakeholders, Malaysia
Related Ministries and Agencies Roles and Responsibilities
1 Kementerian Perdagangan Dalam
Negeri dan Hal Ehwal Pengguna
(KPDNHEP)/Ministry of Domestic
Trade and Consumer Affairs (MDTCA)
KPDNHEP formulates policies, strategies, and
reviews matters pertaining to the development of
domestic trade, i.e., wholesale and retail trade and
consumerism sectors. The most relevant divisions
related to wholesale and retail trade services are
the:
a) Domestic Trade Division (PDN)
Regulates foreign participation in the
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Related Ministries and Agencies Roles and Responsibilities
distributive trade sector in accordance with
the provisions in the Guidelines on Foreign
Participation in the Distributive Trade Sector
(Amendment) 2010;
Manages the issuance of direct selling
licences in accordance with the provisions
of the Direct Sales Act 1993;
Controls the prices of goods in accordance
with the provisions under the Price Control
Act 1946;
Regulates the supply of control items in
accordance with the provisions of the
Control of Supplies Act 1961;
Regulates the optical disc industry in accordance with the provisions of the Optical Discs Act 2000;
Regulates and improves awareness of safety issues in the petroleum industry as stipulated under the Petroleum (Safety Measures) Act 1984 and the regulations in it;
Manages applications for prospecting of crude oil under the Exclusive Economic Zone Act 1984 [Sections 21 (1) and 22];
Regulates the marketing and distribution
activities of petroleum products in the
Downstream Sector through the issuance of
the PDA licence in accordance with the
requirements of Section 6 (3) of the
Petroleum Development Act 1974;
Manages applications for weights and
measures licences in accordance with the
Weights and Measures Act 1972;
Regulates subsidised diesel distribution to
the Land Transport Sector and Passenger
Transportation Sector in Sarawak and
Sabah waters;
Controls and promotes the use of e-
commerce; and
Conducts pricing analysis studies and
analyses the cost of production of control
commodities under the Price Control Act
1946 and the Control of Supplies Act 1961.
b) Sekretariat Majlis Harga Barang Negara (MHBN)
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Related Ministries and Agencies Roles and Responsibilities
MHBN, a division under KPDNHEP, was
formed on Jan 9, 2008, with the function of
setting policy relating to product pricing, to
discuss and find solutions to problems
relating to price increases, price control,
inflation, supplies, and subsidies.
The council has two primary programmes to
support its function:
1. Price Monitoring Programme – To
monitor the prices of selected products on a
daily, weekly or monthly basis. The division
is responsible for preparing analysis on
market price trends for the government‟s
reference in planning action plans and
ensuring the stability of product prices and
supplies. MHBN tracks the pricing of 432
products. This list does not cover all the
products covered; however, it is updated as
and when necessary.
160 products tracked daily.
Price updates reflected in the
system before 12pm every day
(fresh products).
200 products tracked weekly
(mostly food products that are
packaged, canned, and in
boxes).
72 products tracked monthly
(household products).
This programme is meant to be
a reference point for consumers
to make price comparisons and
plan purchases.
2. Price Uniformity (Penyeragaman)
Programme – To ensure suppliers observe
price uniformity in rural areas, especially in
Sabah, Sarawak, Langkawi, and Kelantan
for seven controlled goods (rice, sugar,
flour, cooking oil, diesel, petrol, and LPG).
c) Enforcement Division
To tackle issues of rising prices and
curb price manipulation in the country at
every stage of business through
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Related Ministries and Agencies Roles and Responsibilities
enforcement of the Price Control and
Anti-Profiteering Act 2011 (AKHAP);
To enforce the Festive Season Price
Control Scheme (SKHMP) under the
Price Control and Anti-Profiteering Act
2011 to protect consumers from traders
that take advantage of the festive
season to raise prices of main
commodities;
To eradicate leakages of subsidised
control items and stabilise the supply of
essential goods by ensuring they are
readily available in the market under the
Supply Control Regulations 1974 and
the Control of Supplies Act 1961;
To investigate consumer complaints
utilising the law that is enforced to
ensure a healthy and ethical business
environment;
To eradicate unethical business
activities to protect consumers from
exploitation by traders through the Hire
Purchase Act 1967, Weights and
Measures Act 1972, Direct Selling and
Anti-Pyramid Scheme Act 1993,
Consumer Protection Act 1999, and
Trade Descriptions Act 2011, including
sale activities, door-to-door sales, hire
purchase agreements, verification of
weighing and measuring equipment,
and use of halal terms;
To issue permits for scheduled
controlled items under the Supply
Control Act 1961 for the purpose of
distribution of controlled items;
To protect intellectual property rights
under the Copyright Act 1987 for works
eligible for copyright protection,
including works of literature, film, music,
sound, art, and broadcast;
To promote good trade practices by
prohibiting false trade descriptions and
false or misleading statements in
relation to the supply of goods and
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Related Ministries and Agencies Roles and Responsibilities
services under the Trade Descriptions
Act 2011;
To regulate licensing and manufacturing
of optical discs under the Optical Discs
Act 2000; and
To assist in the regulation of franchise
activities by ensuring that franchisors
and franchisees comply with the laws
stipulated under the Franchise Act
1998.
2 Ministry of Housing & Local
Government (KPKT)
KPKT formulates policies and programmes and
provides technical advice to the federal
government, state governments, and local
authorities in relation to planning, development,
implementation, and managing housing and land.
3 Ministry of Health (MOH) MOH is responsible for providing equitable,
accessible, and quality health facilities aligned with
pattern shifts in environmental health and health
technology development globally. It is also under
the MOH purview to ensure Malaysian citizens
maintain a certain level of health status.
4 Ministry of Economic Affairs (MEA) Services Industry Division under the MEA is
responsible for planning, formulation of policies,
strategies, and development programmes to
strengthen the services sector as the nation's
economic growth driver. Key Functions
Plans, formulates policies, strategies, and development programmes for the services sector;
Monitors policies, strategies, programmes, and project implementations based on KPIs/outcomes;
Evaluates, endorses, and monitors development allocations;
Reviews policies, strategies, programmes, and recommends changes; and
Carries out economic research and intelligence.
5 Ministry of International Trade and
Industry (MITI)
MITI is in charge of making Malaysia the preferred
investment destination and among the most
globally-competitive trading nations. MITI oversees
strengthening bilateral, regional, and multilateral
trade relations and cooperation to enhance national
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Related Ministries and Agencies Roles and Responsibilities
productivity and competitiveness, and facilitate the
development of SMEs, among others.
Wholesale and retail trade Free trade agreement
(FTA) commitments18
:
Malaysia has made commitments to allow foreign equity of up to 70% in wholesale and retail and 30% in franchising services under the Malaysia-Pakistan FTA.
Under ASEAN Framework Agreement on Services (AFAS), commitments have been made to allow foreign equity of up to 51% for commission agents dealing in textiles, clothing, and footwear; wholesale and retail; and franchising services.
6 Ministry of Entrepreneur Development
(MED)
MED is responsible for developing an inclusive and
competitive entrepreneur development policy for
SMEs, including driving the development of B40,
M40, and social entrepreneurs.
7 Suruhanjaya Syarikat Malaysia (SSM)/
Companies Commission of Malaysia
(CCM)
SSM serves as an agency to incorporate
companies and register businesses as well as to
provide company and business information to the
public. All types of companies, both local and
foreign, are required to register their businesses
with SSM.
8 Pihak Berkuasa Tempatan (PBT) PBT (under KPKT) is responsible for creating laws
and rules (in the form of by-laws) and granting
licenses and permits for any trade-ins its area of
jurisdiction. All types of companies, both local and
foreign, are required to get licences from PBT to
operate their business.
10 Department of Statistics Malaysia
(DOSM)
DOSM, under the MEA, aims to broaden its role as
the premier agency in the field of statistics towards
establishing a quality, user-oriented, and timely
information system for the formulation of policies for
national development planning and administration.
11 SME Corp SME Corp, an agency under the MED, is the central
coordinating agency that oversees implementation
of development programmes for SMEs across all
industries, including wholesale and retail trade.
18 https://www.miti.gov.my/index.php/pages/view/4218?mid=566
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Related Ministries and Agencies Roles and Responsibilities
12 Department of Occupational Safety
and Health (DOSH)
DOSH, under the Ministry of Human Resources, is
responsible for administrating and enforcing
legislation related to occupational safety and health.
DOSH ensures that the safety, health, and welfare
of people at work and others are protected from
hazards resulting from occupational activities.
13 Food Safety and Quality Division
(FSQD), MOH
FSQD under the MOH is tasked with implementing
and enforcing the Food Act. FSQD implements an
active food safety programme, which includes
routine compliance, sampling, food premises
inspection, food import control activity, and
licensing of specified food substances required
under the Food Act 1983 and Food Regulation
1985.
FSQD also monitors specific food contaminants and
additives, implements food handler training
programmes, approves food labels, advises
industry and consumers, and provides Health
Certificates, HACCP certification, and Free Sale
Certificates.
14 National Pharmaceutical Regulatory
Agency (NPRA), MOH
NPRA under the MOH ensures the quality, efficacy,
and safety of pharmaceuticals through the
registration and licensing scheme. The agency also
looks into personal care products, such as
cosmetics.
15 Department of Islamic Development
Malaysia (JAKIM )
JAKIM is responsible for offering Halal certification.
At every stage of processing, inspection is
conducted by JAKIM to ensure that Halal standards
and quality are maintained throughout.
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2.3.7.2 WRT Regulations Across the Supply Chain
Shown below are the prevailing regulations in WRT trade covering entire players in the supply chain.
Figure 36: Prevailing Regulations in WRT
Source: Frost & Sullivan Analysis
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Table below provides brief description of the act/policies related to selected product categories.
Table 23: Description of Act/Policy Related to Selected Product Categories
No Act/Policy Description Industry
1 Food Act 198319
- Food
Safety and Quality Division
(FSQD) of the Ministry of
Health (MOH) is
charged with implementing
and enforcing the law
It aims to protect the public
against food related hazards
and frauds, as well as to
promote and motivate the
preparation, handling,
distribution, sale and
consumption of safe, high
quality food.
F&B
2 Food Regulations 198520
Ministry of Health
Food Regulations 1985 is the
key supporting regulation
which governs the various
aspects of food safety and
quality control including food
standards, food additives and
nutrient supplement, food
packaging and labelling
requirements, food hygiene,
food import and export and
food advertisement for over
380 food items. The Food
Safety and Quality Division
(FSQD) of the MOH is
charged with the
implementation and
enforcement of the law.
All imported and locally
manufactured food, beverage
and edible agricultural
products are required to
comply with the guidelines,
and the requirements apply to
imports from all countries.
F&B
3 Malaysian Standard on Halal
Food (MS 1500:2009)
The Malaysian Standard
entitled „Halal Food:
Production, Preparation,
F&B
19 http://www.hdcglobal.com/upload-web/cms-editor-files/HDC-26/file/Act%20281%20-
%20Food%20Act%201983.pdf
20 https://extranet.who.int/nutrition/gina/sites/default/files/MYS%201985%20Food%20Regulations_0.pdf
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No Act/Policy Description Industry
Handling and Storage –
General Guide (MS
1500:2009) was developed
under the Malaysian
Standard Development
System, under the wing of
Department of Standards
Malaysia (DSM). This
standard contains practical
guidelines for the food
industry on the preparation
and handling of halal food
(including nutrient
enhancers). It aims to set the
ground rules for food
products or food businesses
in Malaysia. It will be used by
JAKIM as the basis for
certification whilst other
requirements will also be
taken into account to
complete the certification
process.
4 Halal Certification Halal certification in Malaysia
is standardised across the
country as it is governed by
JAKIM, which is the sole halal
certification body in the
country.
According to the Trade
Descriptions (Certification
and Marking of Halal) Order
2011, imported foods and
goods marketed in Malaysia
should not be described as
halal unless the imported
food and goods comply with
the requirements or certified
as halal by the foreign halal
certification body recognized
by JAKIM. As such, the
importer or manufacturer of
F&B
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No Act/Policy Description Industry
the foods which have been
certified as halal by the
foreign halal certification body
recognized by JAKIM should
indicate the name of the said
certification body on the food
products. Every product with
halal certification must ensure
the halal status of the product
at every stage and at every
process involved in the
production of the product,
including logistics.
5 Price Regulation The regulations that are
enforced to determine the
unreasonably high profit for
goods or services are AKHAP
2011 and Price Control and
Anti-Profiteering (Mechanism
to Determine Unreasonably
High Profit for Goods)
Regulations 2018.
All
6 Consumer Protection Law
1999 (Act 599)
An act that is responsible
towards consumer protection
affairs through National
Consumer Advisory Council
(NCAC)
All
7 Environmental Quality
(Prohibition on the Use of
Controlled Substances in
Soap, Synthetic, Detergent
and Other Cleansing Agents)
Order 1995 & its subsequent
amendments
Policy to control industrial
pollution, including
wastewater which was not
previously regulated, air
pollution from factories, and
solid waste problems.
Household cleaning products
8 Control of Drugs and
Cosmetic Regulations
(CDCR) 1984
This standard is to ensure
that these products are safe
and non-hazardous to
consumers.
Personal care & toiletries
9 Malaysian Standard MS
2200:2008 requirements for
halal certification
The department of Islamic
development in Malaysia
(JAKIM) is the responsible
Personal care & toiletries
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No Act/Policy Description Industry
body for regulation and
certification of halal products
including cosmetics and
personal care. Consumers
are advised to look for Halal
logo to confirm its halal to be
used.
10 Guidelines for Control of
Cosmetic Product 2017 under
National Pharmaceutical
Regulatory Agency (NPRA) -
The content of this guideline
is adapted from the ASEAN
Cosmetic Directive (ACD).
This guideline shall be read in
conjunction with the current
laws and regulations together
with other relevant
legislations, where
applicable, governing
cosmetics for human use in
Malaysia, which include but
not limited to the following:
Sale of Drugs Act 1952
Control of Drugs and Cosmetics Regulations 1984
Dangerous Drugs Act 1952
Poisons Act 1952
Medicines (Advertisement & Sale) Act 1956
Patents Act 1983
Wildlife Conservation Act 2010 (Laws of Malaysia Act 716)
International Trade in Endangered Species Act 2008 (Act 686)
Medical Device Act 2012
Trade Descriptions Act 2011
Personal care & toiletries
11 Guidelines on Good
Distribution Practice (GDP)
2013
This guideline lays down the
appropriate principles for
those involved in the supply
chain in conducting their
Personal care & toiletries
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No Act/Policy Description Industry
activities while ensuring the
maintenance of high
standards of quality
assurance and integrity of the
distribution processes
12 Trade Description Act 1972 The 1972 Act provided a
unique IP enforcement tool,
known as the Trade
Description Order (TDO), for
both registered and common-
law trademark owners. The
Act also covers rules and
regulations governing labels,
fiber content and flammability
standards
Clothing
13 Trade Description Act 2011 Act prohibits false trade
descriptions and false or
misleading statements,
conduct and practices in
relation to goods or services,
thereby protecting the
interests of consumers.
Clothing
2.3.7.3 Licence and Certificate Requirements
Companies engaged in the wholesale and retail trade services industry are required to obtain
licences and certificates. The table below lists down some of the licences/ certificates applicable to
the products covered in this Market Review.
Table 24: Licences and Certificates Requirements
Licences/Certificates Description
Wholesale Retail Trade
Licence (KPDNHEP/MDTCA)
The Wholesale Retail Trade (WRT) licence is a business permit
applicable to foreign-owned companies intending to engage in
distributive trade services in Malaysia. A foreign-owned company is
a company with more than 50% of its total shares owned by non-
Malaysians. Approval for the WRT licence is awarded by the
MDTCA.
WRT licences are generally awarded to four main categories of distributive trades in Malaysia, namely:
1. Retail, Trading (Import and Export), Wholesale Trade 2. Restaurants 3. Franchises
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Licences/Certificates Description
4. Services and Consultancy
The WRT licence issuance aims to:
1. Ensure orderly and fair development of the industry, while promoting the growth of local businesses;
2. Encourage modernisation and increase the efficiency of the industry and its continued contribution to the growth of the economy; and
3. Regulate foreign participation in the wholesale and retail trade sector in Malaysia.
Import and Export Licences
under the Ministry of
International Trade and
Industry (MITI)
The following goods in the customs prohibition of import/export
orders under the Customs Act 1967 require licences for
import/export:
1. Raw sugar 2. Other sugar 3. Wheat flour 4. Milk (for tariff codes 0401 30 110 and 2202 90 100 only).
The following goods under the Act require an export licence from
MITI:
1. Refined sugar 2. Other sugar 3. Milk and milk products (milk and cream, buttermilk,
yoghurt, whey, butter and other fats/oils, from milk, cheese and curd, malt extracts, preparation of milk for infants, condensed sweetened/unsweetened milk).
Halal Certification (JAKIM) Halal certification in Malaysia is standardised across the country as
it is governed by JAKIM, which is the sole halal certification body in
the country. This certification is required for Halal food products/
beverages, cosmetics, and personal care items, among others.
Malaysia‟s halal certification scheme is divided into the following:
1. Food products/beverages/supplements 2. Food premises/hotels 3. Consumer goods 4. Cosmetics and personal care products 5. Slaughterhouses 6. Pharmaceuticals 7. Logistics
Health Certificate – Food
Safety and Quality Division
(FSQD) under the Ministry of
Health (MOH)
FSQD under the MOH issues health certificates for exporters or
distributors that sell foreign products in Malaysia or oversee the
objectives of ensuring that:
1. Food items for use in the local market and exported are safe for consumption and quality;
2. Food items to be exported meet the standards set by the importing country's food laws; and
3. The certificate safeguards the reputation of the country in the capacity of the food industry.
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Licences/Certificates Description
Guidelines for the Control of
Cosmetic Products in
Malaysia – National
Pharmaceutical Regulatory
Agency (NPRA), MOH
Guidelines for the control of cosmetic products in Malaysia revised
on February 1, 2017, serves as a reference for the notification
process, including quality control, inspection, and post-market
surveillance activities of cosmetics.
The scope of this guideline includes information relating to:
1. Submission of cosmetics notification through the NPRA Quest online system;
2. Regulatory requirements for cosmetic products; and 3. Post-market surveillance activities.
Product Testing – National
Pharmaceutical Regulatory
Agency (NPRA), MOH
Product testing is carried out by the NPRA (MOH) for notified
cosmetic products. This is to ensure that all products sold are safe,
of quality, and use claims that can be supported by adequate
supporting documents.
General – Export Certificates The export certificates are offered by the FSQD (MOH). The
certificate is offered to meet the requirements set by the importing
country. Three types of export certificates can be applied with the
MOH, namely:
1. Health certificates for food products and food contact materials;
2. Free sales certificates for food products; and 3. Non- genetically modified food certified and non-genetically
Modified Foods.
2.3.8 Pricing Trends
For the purpose of this market review, price trends of various products were compared across
different formats and states using data provided by MHBN. In 2019, a total of 272 products of FMCG
products were tracked by MHBN across 16 states and five formats namely (Kedai Runcit, Pasar
Mini, Pasar Besar, Supermart, and Hypermarket).
Out of the 272 products, though all the products were analysed, not all the products showed
significant differences (more than 10%). Around 40 products were found to have more than 10%
price difference between the highest average price and lowest average price by States/format
Instances where the prices of certain products are particularly lower or higher in one region or a
format than the rest of the market do not necessarily imply the prevalence of anti-competitive
behaviour. This is only an indication for further investigation to find out if this is affecting the industry
and/or consumer.
The table below only shows the significant differences between the highest and lowest average
prices of selected products based on the data provided.
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Table 25: Difference in Average Prices by State and Format by Products in 2019
Product Category Products Average Price
Difference by State
Average Price
Difference by
Format
1 Rempah Ratus Rempah Sup (Tidak
Berbungkus) (100g)
44% higher at
Terengganu; lowest at
Putrajaya
40% higher at
Supermarket; lowest
at Hypermarket
2 Rempah Ratus Biji Sawi (100g) 56% higher at Sabah;
lowest at Pahang
34% higher at Kedai
Runcit; lowest at
Supermarket
3 Rempah Ratus Jintan Manis (Kasar)
(100g)
57% higher at Sabah;
lowest at Putrajaya
27% higher at Pasar
Mini; lowest at
Hypermarket
4 Rempah Ratus Buah Pala (100g) 73% higher at Perlis;
lowest at Putrajaya
25% higher at Pasar
Mini; lowest at Pasar
Basah
5 Rempah Ratus
(Berbungkus)
Garam Halus Biasa
(Pelbagai Jenama)
(±350g)
48% higher at Sabah;
lowest at Perak
32% higher at Kedai
Runcit; lowest at
Hypermarket
6 Rempah Ratus
(Berbungkus)
Serbuk Kari Kurma
Alagappas (200g)
48% higher at
Sarawak; lowest at
Labuan
29% higher at
hypermarket; lowest
at Pasar Mini
7 Beras Beras Super Cap Jati
TWR 5% (Import)
(10kg)
49% higher at
Sarawak; lowest at
Sabah
29% higher at Pasar
Mini; lowest at Pasar
Basar
8 Beras Beras Pulut Thailand
(Biasa) Cap Floral
(1kg)
32% higher at
Terengganu; lowest at
Sarawak
20% higher at
Supermarket; lowest
at Kedai Runcit
9 Beras Beras Pulut Thailand
(Susu) Cap Sakura
(1kg)
46% higher at
Putrajaya; lowest at
Sarawak
13% higher at
Hypermarket; lowest
at Pasar Basar
10 Beras Beras Super Tempatan
(ST15%) (10kg)
37% higher at
Sarawak; lowest at
Selangor
12% higher at
Hypermarket; lowest
at Kedai Runcit
11 Bihun Bihun Kering (Cap
Jasmine) (400g)
31% higher at
Sarawak; lowest at
Sabah
Not significant
12 Bihun Bihun Kering (Cap
Bintang) (400g)
38% higher at Perlis;
lowest at Sabah
10% higher at
Hypermarket; lowest
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Product Category Products Average Price
Difference by State
Average Price
Difference by
Format
at Pasar Mini
13 Roti Roti Sandwich
Gardenia (400g)
31% higher at
Labuan; lowest at KL
Not significant
14 Roti Roti Gardenia
WholeMeal (400g)
26% higher at Sabah;
lowest at Sarawak
Not significant
15 Gula Gula Merah Lembut
(Pelbagai Jenama)
(500g)
32% higher at
Labuan; lowest at
Melaka
16% higher at Pasar
Mini; lowest at
hypermarket
16 Gula Gula Halus Castor
(Pelbagai Jenama)
(500g)
23% higher at
Labuan; lowest at
Perlis
12% higher at Pasar
Mini; lowest at
hypermarket
17 Tepung Tepung Jagung (Star
Brand) (400g)
48% higher at
Labuan; lowest at
Perlis
17% higher in Kedai
Runcit; lowest in
Hypermarket
18 Tepung Tepung Beras
(Pelbagai Jenama)
(500g)
39% higher in Sabah;
lowest in Perlis
11% higher in Kedai
Runcit
19 Tepung Tepung Naik Sendiri
Cap 'MFM' (850g)
35% higher in
Labuan; lowest in
Sabah
13% higher in Pasar
Basar; lowest in
Hypermarket
20 Tepung Tepung Gandum GP
(Berbungkus) Pelbagai
Jenama (1kg)
32% higher in
Putrajaya
Not significant
21 Minyak dan lemak Minyak Jagung Cap
Mazola (2kg)
47% higher in Melaka;
lowest in Putrajaya
39% higher in
Supermarket; lowest
in Kedai Runcit
22 Minyak dan lemak Minyak Sapi Cap QBB
(400g)
26% higher in
Labuan; lowest in
Perak
19% higher in
hypermarket; lowest
in Pasar Basar
23 Minyak dan lemak Minyak Masak Campur
Cap Helang (5kg)
22% higher in
Labuan; lowest in
Melaka
9% higher in Kedai
Runcit; lowest in
Hypermarket
24 Minyak dan lemak Minyak Jagung Cap
Vecorn (2kg)
21% higher in
Labuan; lowest in
Pahang
9% higher in
Hypermarket; lowest
in Pasar Basar
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Product Category Products Average Price
Difference by State
Average Price
Difference by
Format
25 Kicap dan sos Kicap Tamin (Dark Soy
Sauce) (330ml)
49% higher in
Labuan; lowest in
Sabah
10% higher in Pasar
Basar; lowest in Kedai
Runcit
26 Kicap dan sos Sos Cili Life (340g) 20% higher in Sabah;
lowest in Melaka
Not significant
27 Sapuan (Spreads) Lepaan Farmcows
(250g)
36% higher in Sabah;
lowest in Pahang
14% higher in Kedai
Runcit; lowest in
hypermarket
28 Sapuan (Spreads) Lepaan Buttercup
(250g)
27% higher in
Sarawak; lowest in
Pahang
Not significant
29 Mentega Mentega SCS (Salted)
(250g)
45% higher in
Sarawak; lowest in
Labuan
10% higher in
Supermarket; lowest
in Pasar Basar
30 Penjagaan Diri Berus Gigi Oral B
(Complete Easy Clean
- Soft) (1 btg)
24% higher in Sabah;
lowest in Perlis
13% higher in
hypermarket; lowest
in Kedai Runcit
31 Penjagaan Diri Berus Gigi Colgate
(Twister - Soft) (1 btg)
16% higher in
Selangor; lowest in
Sarawak
13% higher in
hypermarket; lowest
in Pasar Mini
32 Penjagaan Diri Berus Gigi Colgate (Zig
Zag - Soft) (1 btg)
16% higher in
Selangor; lowest in
Sarawak
Not significant
33 Penjagaan Rumah Pelembut Pakaian -
Softlan (Floral Fantasy)
(900ml)
32% higher in KL;
lowest in Labuan
12% higher in Pasar
Basar; lowest in
Hypermarket
34 Penjagaan Rumah Dynamo Power Gel
(Regular) (2kg)
22% higher in
Terengganu; lowest in
Johor
Not significant
35 Penjagaan Rumah Sabun Buku Kuat
Harimau (Pelbagai
Jenis) (150g)
22% higher in
Kelantan; lowest in
Labuan
25% higher in Pasar
Basar; lowest in
Hypermarket
36 Bahan-Bahan
Minuman
Serbuk Kopi Hang
Tuah Robusta/Liberica
(200g)
29% higher in Kedah;
lowest in Sabah
10% higher in
Hypermarket; lowest
in Supermarket
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Product Category Products Average Price
Difference by State
Average Price
Difference by
Format
37 Bahan-Bahan
Minuman
Serbuk Kopi Cap Kapal
Api (Berbungkus)
(180g)
26% higher in
Labuan; lowest in
Pahang
Not significant
38 Tersedia Diminum Yogurt Marigold (Low
Fat) (135g)
27% higher in
Labuan; lowest in
Selangor
8% higher in Kedai
Runcit; lowest in
Hypermarket
39 Tersedia Diminum Yogurt Nestle (Fat
Free) (125g)
24% higher in
Sarawak; lowest in
Selangor
Not significant
40 Tersedia Diminum Red Bull (Botol)
(150ml)
23% higher in
Putrajaya; lowest in
Perak
24% higher in Pasar
Basar; lowest in
hypermarket
2.3.9 Industry Trends
According to the latest Malaysian Retail Industry Report published by the Malaysian Retail
Association, the third quarter of 2019 (July to September) reported the lowest growth in the retail
industry in the past year. The industry saw an increase of barely 1.8% while during the same quarter
in 2018 the industry grew at 6.7%. Low consumer confidence levels and prevailing market
uncertainties are some of the primary factors discouraging consumers from spending more. The
MIER Consumer Sentiment Index‟s third-quarter results echo these findings, indicating a decline in
the index to 84.0 points, the lowest since the fourth quarter of 2017. Contributing factors for the
latest index include the rising cost of living, stagnant purchasing power, and dim future job
prospects.
Key highlights of the Malaysian retail industry are shown below. While several hypermarkets and
supermarkets are approaching expansion plans with caution, all convenience stores are
aggressively extending their reach. A few large players have ceased operations while others are
venturing into diversification businesses and e-commerce.
Table 26: Recent Activities in Malaysian Retail Industry
Type of Activity Description
Opening of new stores Hypermarket
o NSK hypermarket to open a store in Cyberjaya by the end of 2020
Supermarket o Tesco‟s maiden supermarket opened in the Klang
Valley in 2019 following the government‟s easing of rules in 2018 allowing foreign hypermarket operators to open stores under 3,000 sqm in size
Convenience store o 7-Eleven has set a target to open up to 200 stores in
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Type of Activity Description
2019 o MyNews.com has set a goal to open up to 100 stores
in 2019 o FamilyMart entered the Malaysian market in 2016 and
is on track to expand up to 300 stores by 2022
Mini Market o KK Supermart is opening 200 stores between 2019 and
2020 o 99Speedmart has opened up to 1,000 stores as at
2017 and plans to continue its expansion
Closing down of stores
Parkson has closed several stores since 2017. In June 2019, Parkson closed its M Square Mall store in Puchong just 18 months after opening
Dairy Farm International Holdings Ltd has closed several stores in the past two years, namely Cold Storage and Giant supermarkets and hypermarkets
Acquisition In 2017, Village Grocer Group bought Ben‟s Independent
Grocer (100%). The deal allows Village Grocer to extract procurement and operational synergies to serve the growing market segment
Diversification Tesco is reducing its store size and capitalising on the
available land space to venture into property development. Current development is Tesco Ampang and another potential store for similar development is Tesco Mutiara Damansara
7-Eleven is venturing into parcel service, bill payment services for utilities, and PTPTN payments
99 Speedmart is venturing into parcel services
MyNews.com is venturing into parcel services and fresh food
E-commerce Tesco is reducing its store space and placing some of its
products on the e-commerce platform
Source: Frost & Sullivan analysis based on industry news and reports
2.3.9.1 Small Format Stores Gaining Momentum
Hypermarkets and large department stores are increasingly less favoured by Malaysian consumers
in recent years. Consumers prefer smaller grocery stores as they want to save time shopping. As a
result, the hypermarket segment has reported negative growth over the past three quarters of 2019,
leading many large players to close some of their stores. Conversely, the small format shops
segment continues to record robust growth. Big players like Giant are investing in convenience
stores, although current government regulations allow only 30% foreign participation in convenience
stores and the stores cannot exceed 1,500 sqft in size. As such Giant has partnered with Negeri
Sembilan royalty-linked Syarikat Pesaka Antah Sdn Bhd to open ShopSmart convenience stores,
with the group expecting to add 500 stores in the coming decade.
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2.3.9.2 Growing number of convenience stores at Petrol Stations
Petrol stations such as Petronas, Shell are increasingly seen to open up more convenience stores
within their premise. Based on an industry report21
, out of 1,064 Petronas stations nationwide, there
are around 760 Mesra stores that sell confectionaries, beverages, food, and other items. The
convenience stores are however operated by the dealers and not Petronas Dagangan (PDB). To
complement Mesra store, PDB has formed alliances with franchises such as KFC, Starbucks,
Dunkin‟ Donuts, etc. as means to attract customers not only to these outlets but also to shop at
Mesra stores. <>
Similarly, there are over 360 Shell Select stores. Similar to Mesra stores, Shell SELECT retail is
operated by the petrol station operator. Currently, Shell Malaysia Trading Sdn Bhd has appointed
one contractor to look after the supply of products throughout peninsular Malaysia except for cold
chain products 22
.
2.3.9.3 E-commerce Proliferation
Although e-commerce represents a small proportion of retail sales currently, Malaysia‟s e-commerce
segment is one of the fastest-growing among Southeast Asian countries. Based on industry reports,
almost 50% of the population are online shoppers. Consumer preferences for convenience, greater
choice, and affordable prices are key factors driving the growth of e-commerce that is poised to
redefine the retail industry landscape. Government initiatives under the National Ecommerce
Strategic Roadmap, developed by MITI and MDEC, are also pivotal in increasing e-commerce
adoption. The roadmap covers six thrust areas, namely to:
1. Accelerate seller adoption of e-commerce
2. Increase adoption of e-procurement by businesses
3. Lift non-tariff barriers (e-fulfilment, cross-border, e-payment, consumer protection)\
4. Realign existing economic incentives
5. Make strategic investments in selected e-commerce player(s)
6. Promote national brand to boost cross-border e-commerce
2.3.9.4 Adoption of New Technologies Among Brick-and-Mortar Companies
Traditional retailers are working with third-party providers to offer online shopping. Such retailers
allow customers to place orders on their website or third-party mobile application, with the choice to
either, have the goods delivered at home or pick up their purchases directly from the store.
21
http://www.bursamarketplace.com/mkt/tools/research/ch=research&pg=research&ac=519511&bb=530880
22 IDI with Shell Select Retail Convenience Stores
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2.3.9.5 Private Label Brands
Though private label brands have been around in Malaysia for a while, it remains underdeveloped.
Based on an industry report published in 2014, PLB represented 2% or lower share of the store
brand23
. As consumers become more price-sensitive and seek more value for their money, demand
for private label brands is expected to increase. Recognising this opportunity, retailers are expanding
the number of private label products under their umbrella. Private label allows them to price the
products independently, potentially gaining higher margins as they deal directly with the OEM
without any middlemen.
2.3.10 Key Findings from Interviews with Industry Players outside Kuala Lumpur
Perlis
Based on discussions with five retailers operating within the distance of 0.2 - 34 kilometres from the
border side of Perlis state, mom and pop stores are the most prominent type of format with no
existence of large-format stores.
Price: The retailers interviewed indicated that there are no price differences in products between the
border side stores to the other part of peninsular Malaysia.
Issues: Based on the IDIs with retailers, there are no specific issues prevalent in Perlis that is
affecting their businesses currently.
Trend: Retailers mentioned that the locals prefer to do their grocery shopping at the local store. This
is due to currency fluctuation and spending money outside Malaysia especially in Thailand is not
cost-effective to the local people. Furthermore, the mobility of the people from coming in and out
from the border has been difficult. The border side security has been tightened lately (since August
2019) by Malaysian Immigration thus impacting the inward and outward bound of people. They
highlighted that previously Malaysian would go to Thailand to purchase goods such as baby milk,
baby diapers, personal care & toiletries and household cleaning product. Since the stricter
enforcement is in place to check revenue losses, the movement of people cross border to purchase
goods has reduced.
Sarawak/Sabah
Based on discussions with retailers, there are three main issues faced by them in Sarawak and
Sabah. The below-mentioned issues are the main causes for price differences when compared to
Peninsular Malaysia.
1. Logistics cost: Retailers from Semenanjung that have outlets in Sabah and Sarawak
encountered restocking issues and their outlets in those areas are consistently facing out-of-
stocks issues due to local authority delays in processing their suppliers‟ shipment from
peninsular Malaysia. The local authorities in Sabah and Sarawak required that these retailers
to source their supplies from local suppliers first before they can ship their supplies from
Semenanjung Malaysia, as indicated in their licensing agreement. There are cases where
the local authorities still make it difficult for the retailers to restocks from Semenanjung, even
though there are no such suppliers available in those states.
23http://gbse.com.my/v3no7september17/Paper-115-.pdf
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2. The smaller volume of goods: Unlike peninsular Malaysia, retailers in Sabah and Sarawak
highlighted that their volume of goods is smaller due to population size. This sometimes
affects the pricing of products in order to be profitable.
3. Minimum wages increase: Though minimum wages change affect all, retailers in Sabah/
Sarawak indicated that the impact for them seem to be higher has they are already faced
with the difficulties to finding labour and any small increase in wages affects their ability to
pay their workers and therefore hits their profitability.
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3 MARKET ASSESSMENT FOR FOOD & BEVERAGES
3.1 Market Definition and Product Segmentation
The Malaysian F&B product categories comprise:
Cocoa and cocoa preparations
Prepared cereals and flour preparations
Processed seafood
Dairy products
Prepared and preserved vegetables and fruits
Processed meat
Sugar and sugar confectionery
Coffee
Tea
Juices and cordial drinks
Spices
Edible products and preparations
Source: MITI
3.2 Market Overview
The processed F&B segment in the country is predominantly Malaysian-owned small and mid-sized
enterprises (SMEs). Based on the Retail Group Malaysia (RGM) report, Malaysia‟s F&B retailers
generated revenue of RM106.62 billion in 2018, expecting to increase by 4% in 2019.24
Currently,
store-based retailing is a more prominent distribution channel for F&B businesses with less than 5%
of purchases made online. Industry participants expect the e-commerce industry to pick up pace as
a distribution channel in the next five years, particularly in the Klang Valley and other major cities.
Processed food trends transforming the F&B segment in Malaysia include:
Higher consumer awareness about nutritional value increasing demand for functional foods, minimally-processed fresh foods, organic, and natural food flavours from plants and seafood.
Halal products are gaining more traction globally. Malaysia, as one of the leading Halal hubs, has the potential to attract more local and foreign investments to cater to global and domestic food requirements.
Large companies are investing in automation and digitisation to improve operational and output efficiency.
Despite these opportunities, there are challenges affecting the segment, which include a fragmented
manufacturing environment, ageing infrastructure impeding productivity, and reliance on foreign low-
skilled labour. The food processing segment is estimated to account for about 10% of manufacturing
output.25
A total of 56 projects, amounting to RM1.6 billion in investments, were approved in 2018, of which
RM1.1 billion were domestic investments while the remaining were foreign ventures. Of the 56
projects, 35 were new projects while 21 were expansion/diversification projects that are expected to
24 https://www.fas.usda.gov/data/malaysia-retail-foods-annual-3
25 MIDA – Malaysia Investment Performance Report, 2018
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provide 4,660 new jobs. Production of cereals, flour-based products, and food ingredients
represented 18% of investments; followed by animal feed (13%); beverages (11%); processed fruits,
vegetables, tubers, and meat products (9%); chocolate and sugar confectioneries and food
supplements (5%); dairy products and seafood products (4%); and other food products.26
3.2.1 Key Players in the F&B Landscape
The F&B industry in Malaysia has more than 8,000 companies, predominantly local SMEs. Key
players in the industry include Nestle (Malaysia) Bhd, Mamee-Double Decker Bhd, Yeo Hiap Seng
Sdn Bhd, Fraser & Neave Bhd, Ramly Food Processing Sdn Bhd, Dewina Food Industries Sdn Bhd,
Ajinomoto (M) Bhd, Charoen Pokphand Holdings (M) Sdn Bhd, Kerry Ingredients (M) Sdn. Bhd, Hup
Seng Industries Bhd, Apollo Foods Holding Bhd, and Oriental Food Industries Holding Sdn Bhd.
26 MIDA – Malaysia Investment Performance Report, 2018
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3.3 Pricing Analysis and Margins
3.3.1 Pricing Trends
3.3.1.1 Pricing Practices of Product Suppliers/Retailers
Generally, the surveyed industry players feel that price volatility of the selected products is low (i.e.
the magnitude of price difference is low), except for essential food items which 41% of the industry
players rated it as moderate and 22% rated it as high or very high. 70% of these companies claimed
that the price difference for essential food items is 6-10% and 15% said the price difference is 11-
15%.
Figure 37: Rating of Price Volatility by Product Segment - Food & Beverages
n= 254-260
Source: Frost & Sullivan Industry Survey
(Q28a. Please rate the price volatility of the following product categories:)
5%
26%
31%
33%
34%
35%
34%
34%
33%
33%
37%
31%
36%
36%
36%
37%
36%
36%
39%
39%
34%
36%
41%
37%
31%
28%
25%
26%
25%
24%
25%
28%
24%
20%
2%
3%
3%
3%
3%
5%
3%
3%
4%
3%
2% Essential food items
Frozen food
Noodles, pasta
Canned food
Baked goods
Snacks
Dairy products
Cold beverages
Confectionary
Hot beverages
Condiment
Very low (1) Low (2) Moderate (3) High (4) Very high (5)
Mean
2.83
2.15
2.05
2.01
1.98
1.96
2.02
1.96
1.98
2.04
1.93
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3.3.1.2 Price Increases Observed by Consumers in the Past 12 Months
In the past 12 months, almost 60% of surveyed consumers in the central region have noted price
increases for essential food items, while over 50% of consumers in the southern region highlighted
price hikes for canned foods, frozen foods, and dairy products. Such price increases are typically
within 5%. In Sarawak, 57% of consumers indicated price increases of 6%–10% in canned foods.
Figure 38: Observed Price Increase by Consumers in the Past 12 Months, Malaysia (2019)
Source: Frost & Sullivan Consumer Survey
(Q17 Have you noticed any price increases for the selected items at your selected retail outlets in the
past 12 months? If yes, please specify the percentage of price increase.)
34%
27%
20%
22%
37%
35%
42%
57%
32%
22%
30%
37%
38%
29%
23%
20%
17%
14%
40%
23%
41%
35%
37%
29%
18%
52%
63%
71%
15%
17%
11%
19%
26%
18%
17%
9%
24%
18%
31%
33%
45%
57%
39%
19%
7%
0%
25%
7%
0%
Essential food items
Baked goods
Hot beverages
Cold beverages
Dairy products
Frozen food
Canned food
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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3.3.2 Margins Analysis
For the food & beverage category, manufacturers normally operate on low to moderate margin but in
high volume, sales to gain profitability. The margin for manufacturers range from 5-15% if the
manufacturers sell to distributors and wholesalers, and the margin could go up to 20% if the
manufacturers sell directly to retailers or even directly to consumers through e-commerce platforms.
Distributors and wholesalers margin for this category is generally set at 5% or less. Distributors and
wholesalers typically do not deal directly with customers or small purchases, hence their margins are
quite straight forward. However, there are few cases where wholesalers have a physical outlet for
customers to walk in and purchase their products in bulk purchases with wholesale prices, with the
same margin they sell to retailers
Retailers‟ margin for food & beverage is normally set below 10% depending on products and various
factors, such as lower margins for “invested line” products.
Figure 39: Price Margins for Food & Beverages Products, Malaysia
Source: IDIs and Industry Survey
To illustrate the final price paid by consumers within the indirect distribution, usually the price is
derived after adding manufacturer‟s margin, distributor‟s margin, wholesaler‟s margin and retailer‟s
margin into the manufacturing cost of a product. For example the cost of a product which takes
RM10 to manufacture, can be sold at RM13.95 after taking into consideration all the margins at
different levels.
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In direct distribution, only the manufacturer‟s margin and retailer‟s margin are added to the cost of a
product, hence the product can be sold to the consumer at a lower price of RM12.65.
In the case when the product is sold online by the manufacturer directly to the customer, the final
sale price is estimated to be RM12.
Figure 40: Price Margins Illustration for Food & Beverages Products, Malaysia
Source: Frost & Sullivan Analysis based on input from IDIs and Industry Survey
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4 MARKET ASSESSMENT FOR HOUSEHOLD CLEANING PRODUCTS
4.1 Market Definition and Product Segmentation
Household cleaning products are used to remove dirt, including dust, stains, bad odours, and clutter
on various surfaces. Household cleaning products include, but are not limited to:
Soap, organic surface-active products
Organic surface-active agents (other than soap), surface-active preparations, washing preparations, and cleaning preparations
Brooms, brushes, mops, and feather dusters
Garbage bags and other plastic articles
Source: Frost & Sullivan based on industry reports
4.2 Market Overview
Modern retail channels are becoming the preferred choice of store to purchase cleaning products,
even in Malaysia, where traditional trade is still popular for everyday shopping. Most Malaysians
purchase their household cleaning products from retail chains or hypermarkets due to their
competitive pricing and choice of products available compared to mom-and-pop stores.
Online retail platforms have to gain significant traction in Malaysia when it comes to purchasing
household cleaning products. According to Nielsen‟s Global Homecare Survey conducted in 2016,
Malaysian consumers consider effectiveness, multipurpose usage, and price as their top 3 attributes
when choosing household cleaning products.
4.2.1 Key Players in the Household Cleaning Products Landscape
According to 2016 Nielsen‟s Global Homecare Survey, efficiency and value are the topmost
attributes for Malaysian consumers when choosing home cleaning products. The household cleaning
products segment in Malaysia is highly competitive, driven by leading players such as Unilever,
Henkel, Lion Corporation, and Kao Corporation.
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4.3 Pricing Analysis and Margins
4.3.1 Pricing Trends
4.3.1.1 Pricing Practices of Product Suppliers/Retailers
Based on the feedback received from the industry participants prices of household cleaning products
are less volatile.
Figure 41: Rating of Price Volatility by Product Segment - Household Cleaning Products
n= 217-220
Source: Frost & Sullivan Industry Survey
(Q28a. Please rate the price volatility of the following product categories:)
30%
31%
30%
32%
32%
33%
31%
31%
31%
31%
41%
40%
42%
39%
40%
38%
41%
42%
41%
41%
28%
28%
26%
28%
28%
28%
27%
26%
27%
27%
1%
1%
1%
1%
1%
1%
Laundry cleaningdetergent
Dish detergent
Multipurpose cleaner
Floor cleaner
Kitchen cleaner
Toilet/bathroom cleaner
Mop and broom
Garbage bag
Disinfectants anddisinfectant cleaners
Glass and multi-surfaceCleaners
Very low (1) Low (2) Moderate (3) High (4) Very high (5)
Mean
2.01
2.00
2.00
1.98
1.98
1.96
1.96
1.99
1.99
1.99
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4.3.1.2 Price Increases Observed by Consumers in the Past 12 months
Most surveyed consumers did not notice any price increases for the main household cleaning
products in the last 12 months.
Figure 42: Key Household Cleaning Products by Price Increases Observed by Consumers in the Past 12 Months, Malaysia
Source: Frost & Sullivan Consumer Survey
(Q17 Have you noticed any price increases for the selected items at your selected retail outlets in the
past 12 months? If yes, please specify the percentage of price increase.)
32%
26%
23%
30%
22%
46%
29%
22%
21%
25%
21%
25%
34%
35%
26%
31%
37%
18%
33%
18%
18%
16%
17%
39%
23%
36%
20%
32%
33%
18%
24%
16%
0%
0%
0%
Laundry cleaning detergent
Dish detergent
Toilet/bathroom cleaner
Floor cleaner
Kitchen cleaner
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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4.3.2 Margins Analysis
Household cleaning product manufacturers normally operate on moderate to high margin ranging
between 6% up to 15% in total depending on the innovative product offerings that cater to the
growing demand for premium and natural based products. Manufacturers‟ margin to distributor and
wholesaler in this category is between 6-10%, while the margin could go up to 15% if the
manufacturers sell directly to retailers or even directly to consumers through e-commerce platforms.
For distributors and wholesalers of household cleaning products, the margin is typically below 5%.
While retailers‟ margin for this product category is typically set at 10% or less, as consumers
spending on household cleaning products is considered flexible. Customers can afford to be
economical and selective when it comes to household cleaning products and are normally price
sensitive. Hence it is quite difficult for retailers to enjoy high margins.
Figure 43: Price Margins for Household Cleaning Products, Malaysia
Source: IDIs and Industry Survey
To illustrate the final price paid by consumers within the indirect distribution, usually the price is
derived after adding the manufacturer‟s margin, distributor‟s margin, wholesaler‟s margin and
retailer‟s margin into the manufacturing cost of a product. For example the cost of a product which
takes RM10 to manufacture, can be sold at RM13.35 after taking into consideration all the margins
at different levels.
In direct distribution, only the manufacturer‟s margin and retailer‟s margin are added to the cost of a
product, hence the product can be sold to the consumer at a lower price of RM12.65.
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In the case when the product is sold online by the manufacturer directly to the customer, the final
sale price is only RM11.50.
Figure 44: Price Margins Illustration for Household Cleaning Products, Malaysia
Source: Frost & Sullivan Analysis based on input from IDIs and Industry Survey
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5 MARKET ASSESSMENT FOR PERSONAL CARE & TOILETRIES
5.1 Market Definition and Product Segmentation
Personal care & toiletries is defined as products generally used to eliminate odour or/and enhance
appearance and personality. Personal care & toiletries include, but are not limited to:
Make-up and skincare preparations
Haircare products
Oral and dental hygiene
Cosmetics and toilet preparations, including shaving, bath, and deodorant products
Soap and other body washes
Personal care brushes, e.g., nails, teeth, shaving.
Source: Frost & Sullivan based on industry reports
5.2 Market Overview
The personal care and toiletries in Malaysia is growing rapidly alongside the increase in consumer
expenditure rate. Based on GlobalData‟s report, „Country Profile: Cosmetics & Toiletries in Malaysia‟
published in 2019, Malaysia‟s cosmetics & toiletries industry was estimated to be RM6.4billion in
201827
.
Previously, most Malaysian consumers purchased only basic personal care products, such as hair
care and bath products. Their buying habits have since changed due to higher disposable income
levels and a greater choice of products in stores. Malaysian consumers are now more sensitive and
highly conscious about the quality, the use of natural ingredients, cruelty-free, and halal grooming
brands, products, and services to suit their lifestyles and tastes. While women are the primary
customers in the personal care market, an increasing number of Malaysian men, particularly in
urban areas that are also generating strong demand for personal care products. In light of this trend,
expenditure on personal care products in Malaysia is forecast to trend upwards in the coming years.
The market for personal care products can be divided into three segments, i.e. mass market,
prestige brands market and others. Products that fall under the mass market are low to medium
price range toiletries and skincare that are sold at supermarkets, hypermarkets, pharmacies, etc.
Prestige brands, on the other hand, are products sold at beauty counters in major department
stores. Whereas, products that fall under others are those sold at specialty stores that have certain
special focus such as natural based products such as Body Shop, Origins, or specialized beauty
centers such as Dermalogica, Leonard Drake, etc. However, for the purpose of this market review,
we will be focusing on personal care & toiletries that are sold in mass markets.
Store-based retailing is the dominant distribution channel for the personal care and toiletries market
in Malaysia, primarily due to a large number of grocery retailers offering these products, including
small independent grocers and supermarkets/hypermarkets. The number of consumers buying
personal care products online, although relatively small, has registered faster sales growth at the
expense of store-based retailers. In 2018, Statista reported that Malaysia‟s revenue for personal
27 https://www.globaldata.com/malaysias-cosmetics-toiletries-industry-poised-for-modest-value-cagr-of-4-
2-over-2018-2023-says-globaldata/
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care purchased through e-commerce channels amounted to RM1.11 billion (US$275 million),
expecting to reach RM2.43 billion (US$594) million by 2024, at a CAGR of 13.9% over the period28
.
Personal care and cosmetic products in Malaysia are required to comply with Malaysian Standards
MS 2200:2008 requirements for halal certifications. This standard is to ensure that all personal care
and cosmetic products offered in Malaysia are safe. The department of Islamic Development
Malaysia (JAKIM) is the responsible body that is in charge of regulation and certification of halal
products The Federation of Malaysian Manufacturers – Malaysian Cosmetics and Toiletries Industry
Group (FMM-MCTIG) reported that currently there are more than 50 small and medium sized local
companies producing personal care products in Malaysia.
5.2.1 Key Players in the Personal Care & Toiletries Market Landscape
While international players dominate the personal care products market in Malaysia, there is a
growing number of domestic companies, primarily pharmacy chains and specialised stores with
online websites, entering the market with the increase in local distributors. Multinational corporations
such as Procter & Gamble, DKSH, and Unilever continue to lead the beauty and personal care
market in the country. However, in recent years, local retail outlets such as Guardian and Caring
Pharmacy are offering more dermatological skincare products with a strong focus on halal and
natural products for sensitive skin.
Prominent personal care product manufacturers in Malaysia include Procter & Gamble Co., L‟Oreal
Group, Unilever Group, Colgate-Palmolive Co., Avon Products Inc., Estee Lauder Cos Inc.,
Beiersdoirf AG, Johnson & Johnson Inc., Shiseido Co Ltd, and Kao Corp.
28 Statistia outlook report on Malaysia Revenue for Personal Care 2018
https://www.statista.com/outlook/254/122/personal-care/malaysia
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5.3 Pricing Analysis and Margins
5.3.1 Pricing Trends
5.3.1.1 Pricing Practices of Product Suppliers/Retailers
Based on the feedback received from the industry participants‟ prices of personal products are
similar to household cleaning products, less volatile.
Figure 45: Rating of Price Volatility by Product Segment - Personal Care Products
n= 220-229
(Q28a. Please rate the price volatility of the following product categories:)Source: Frost & Sullivan
Industry Survey
(Q29 How frequent does your selling price of the following product category change?)
37%
37%
38%
36%
35%
35%
34%
34%
35%
33%
33%
35%
35%
38%
37%
37%
38%
38%
36%
38%
28%
26%
26%
25%
26%
27%
26%
27%
28%
28%
2%
2%
2%
1%
1%
1%
1%
Body Soap / Shower Gel
Hand wash
Tooth paste
Tooth brush
Mouthwash
Hair Shampoo
Hair Conditioner
Deodorant
Facial wash
Lotion/Moisturiser
Very low (1) Low (2) Moderate (3) High (4) Very high (5)
Mean
1.96
1.94
1.93
1.91
1.93
1.96
1.95
1.97
1.96
1.97
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5.3.1.2 Price Increases Observed by Consumers in the Past 12 months
Most surveyed consumers did not notice any price increases for the main personal care products in
the past 12 months.
Figure 46: Key Personal Care Products by Price Increases Observed by Consumers in the Past 12 Months, Malaysia
Source: Frost & Sullivan Consumer Survey
(Q17 Have you noticed any price increases for the selected items at your selected retail outlets in the
past 12 months? If yes, please specify the percentage of price increase.)
21%
28%
33%
25%
18%
27%
31%
44%
41%
34%
20%
40%
19%
14%
33%
20%
17%
15%
7%
25%
24%
26%
5%
25%
18%
20%
37%
20%
21%
29%
36%
32%
34%
21%
33%
10%
18%
16%
11%
8%
Tooth paste
Body Soap/ Shower Gel
Hair Shampoo
Facial wash
Tooth brush
Mouthwash
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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5.3.2 Margins Analysis
Personal care products manufacturers earn a 6% to 20% margin. These manufacturers, in general,
will have their appointed long-standing distributors and wholesalers that will distribute the products to
retailers.
Distributors and wholesalers within this product category typically trade the products below a 5%
margin.
Retailers, on the other hand, will enjoy a slightly better margin than wholesalers and distributors with
up to 10% for their house brand products and lower than 10% for other products due to increased
competition with online platforms.
Figure 47: Price Margins for Personal Care Products, Malaysia
Source: IDIs and Industry Survey
To illustrate the final price paid by consumers within the indirect distribution, usually the price is
derived after adding manufacturer‟s margin, distributor‟s margin, wholesaler‟s margin and retailer‟s
margin into the manufacturing cost of a product. For example the cost of a product which takes
RM10 to manufacture, can be sold at RM14.55 after taking into consideration all the margins at
different levels.
In direct distribution, only the manufacturer‟s margin and retailer‟s margin are added to the cost of a
product, hence the product can be sold to the consumer at a lower price of RM13.20.
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In the case when the product is sold online by the manufacturer directly to the customer, the final
sale price is only RM12.00.
Figure 48: Price Margins Illustration for Personal Care Products, Malaysia
Source: Frost & Sullivan Analysis based on input from IDIs and Industry Survey
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6 MARKET ASSESSMENT FOR CLOTHING
6.1 Market Definition and Product Segmentation
Clothing is typically made of fabrics or textiles, and even include garments made from animal skin or
thin sheets of materials put together. Clothing products include, but are not limited to:
Men and boys‟ underpants, briefs, nightshirts, pyjamas
Women and girls‟ slips, petticoats, briefs, panties, nightdress, pyjamas
T-shirts, singlets
Babies‟ garments and clothing accessories
Men or boys‟ suits, jackets, blazers, trousers
Women or girls‟ suits, jackets, blazers, trousers
Men or boys‟ shirts
Women‟s or girls‟ blouses, shirts and shirt-blouses.
Source: Frost & Sullivan based on industry reports
6.2 Market Overview
The clothing retailing market is one of the fastest-growing segments in Malaysia and characterised
by fierce competition, short life cycles, and vast product varieties. The segment is often regarded as
highly-fragmented, uncertain, fast-changing, and challenging, with a large representation of SMEs.
Malaysia‟s textile and textile products is considered to be the 13th
largest exporting industry in 2018
and was estimated to be RM12 billion with the USA being the top market for exported products.29
In
terms of investments, a total of 18 projects totalling RM851 million were approved in 2018. The 18
projects consist of primary textiles (RM398 million), specialised apparel (RM181.6 million), technical
textile (RM108.6 million), made-up garments (RM14.3 million), and textile products (RM148.5
million).
6.2.1 Key Players in the Clothing Retailing Market Landscape
In Malaysia, millennials are considered heavy consumers in clothing retailing, contributing to the
strong performance of clothing retailing channels in the country. Brand image is vital as many
Malaysians are familiar with international fashion brands, resulting in the rapid expansion of leading
fashion retailers such as Uniqlo, H&M, Cotton-On, Zara, and Mango.
29 https://www.mida.gov.my/home/textiles-and-textile-products/posts/
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6.3 Pricing Analysis and Margins
6.3.1 Pricing Trends
6.3.1.1 Pricing Practices of Product Suppliers/Retailers
Compared to all the products reviewed under this market review, clothing products are less volatile
indicating that the prices tend to be steadier.
Figure 49: Rating of Price Volatility by Product Segment – Clothing
n= 85-96
(Q28a. Please rate the price volatility of the following product categories:)
Source: Frost & Sullivan Industry Survey
27%
28%
31%
39%
51%
47%
33%
39%
31%
33%
31%
30%
66%
63%
56%
49%
38%
42%
53%
50%
57%
54%
57%
61%
8%
9%
12%
11%
11%
10%
14%
10%
12%
12%
11%
9%
1%
1%
1%
1%
1%
1%
Men innerwear
Men daily clothes
Men business attire
Men sportswear
Women innerwear
Women daily clothes
Women business attire
Women sportswear
Children innerwear
Children daily clothes
Children school uniform
Children sportswear
Very low (1) Low (2) Moderate (3) High (4) Very high (5)
Mean
1.81
1.81
1.84
1.73
1.60
1.66
1.81
1.72
1.81
1.81
1.82
1.79
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6.3.1.2 Price Increases Observed by Consumers in the Past 12 Months
More than half of the surveyed consumers in the central region noticed price increases in men‟s
daily wear and business attire as well as children‟s daily wear in the past 12 months. Price increases
for both types of men‟s clothing varied greatly; although 53% of consumers in the east coast
observed 6%–10% price increases in men‟s daily wear. Prices of children‟s daily wear typically
increased by 6%–10%.
Figure 50: Key Clothing Products by Price Increases Observed by Consumers in the Past 12 Months, Malaysia
Source: Frost & Sullivan Consumer Survey
(Q17 Have you noticed any price increases for the selected items at your selected retail outlets in the
past 12 months? If yes, please specify the percentage of price increase.)
35%
37%
30%
22%
16%
36%
29%
44%
54%
52%
38%
36%
61%
45%
30%
19%
21%
14%
4%
10%
20%
28%
30%
26%
25%
4%
17%
19%
45%
53%
27%
13%
21%
31%
26%
33%
19%
11%
22%
33%
7%
6%
15%
7%
0%
Women daily clothes
Men daily clothes
Children daily clothes
Women innerwear
Men innerwear
Men business attire
Women business attire
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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6.3.2 Margins Analysis
Within the clothing category, there is a growing trend eliminating distributors and wholesalers and
replacing it with sourcing agents along the supply chain, due to the co-creation business model. The
observed margin for manufacturers in this product category could range from 20% up to 50%
depending on the channel used. Manufacturers expect their margin through sourcing agents to be
around 15-25% with up to 5% commission to sourcing agents and around 20-30% margin is
expected if they deal directly with retailers. Meanwhile, manufacturers‟ margin could go up to 50% if
they sell directly to consumers through e-commerce platforms.
Retailers can expect their margin to be in the range of 25-50%, with higher margin expected from
their house brands.
Sourcing agents typically work on commission basis around 1-10% from assisting both
manufacturers and retailers.
Figure 51: Price Margins for Clothing Products, Malaysia
Source: IDIs and Industry Survey
For the clothing supply chain, a general rule for pricing of a product within the co-creation model is
by adding manufacturer‟s margin plus commission paid to sourcing agent together with retailer‟s
margin inclusive of commission paid to sourcing agents to the cost of the product. In this case, a
clothing product that cost RM10 to the manufacturer can be sold at RM19.00
For direct distribution supply chain, manufacturer‟s margin and retailer‟s margin are added to the
RM10 cost of a product, which cost the end product to the consumer of RM19.50
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When product is sold online by the manufacturer, the final sale price is only RM15.00, even with a
50% margin.
Figure 52: Price Margins Illustration for Clothing Products, Malaysia
Source: Frost & Sullivan Analysis based on input from IDIs and Industry Survey
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7 COMPETITION ASSESSMENT
7.1 Market Concentration
Market concentration is a measure to gauge the extent to which market shares are concentrated
between small numbers of firms. It is often taken as a proxy for the intensity of competition. If there
is a low concentration, the means that the market is not influenced by top „N‟ companies and the
industry is considered to be competitive. On the other hand, in the case of high concentration, top
companies have a major influence and have a high market share.
The Concentration Ratio (CR) and Herfindahl Index (HHI) are commonly used measures for market
concentration.
CR measures the market share of top 4 firms in an industry. CR can range between 0 10 100%
while HHI, is a measure of the size of firms in relation to the industry. It is calculated by squaring the
percentage of the market share of each firm in the market and summing these numbers to calculate
the index. The index can range from 0 to 10,000.
Figure 53: Market Concentration using CR and HHI
Source: Adapted from Corporate Finance Institute, Dinesh Bakshi, Economics Help
7.1.1 Market Concentration in Wholesale Trade Industry
Based on WRT 2014 Census data, except „Wholesale of dairy products‟ rest of the categories are
seen to have low to no concentration.
Table 27: Market Concentration in Wholesale Trade Industry by MSIC Code, Malaysia
MSIC
Code Description
Number of
Establishments HHI
Concentration
Ratio
46322 Wholesale of dairy products 96 3,883.61 CR-4=89.2%
46323 Wholesale of confectionary 182 995.93 CR-4=51.5%
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MSIC
Code Description
Number of
Establishments HHI
Concentration
Ratio
46422 Wholesale of perfumeries, cosmetics,
soap and toiletries 975 478.25 CR-4=37.3%
46324 Wholesale of biscuits, cakes, breads,
and other bakery products 648 336.76 CR-4=31.5%
46325 Wholesale of coffee, tea, cocoa, and
other beverages 720 224.09 CR-4=21.63%
46419 Wholesale of textiles, clothing n.e.c. 676 158.49 CR-4=20.4%
46321 Wholesale of rice, other grains, flour and
sugars 901 152.63 CR-4=19.1%
46413 Wholesale of clothing 2,078 137.10 CR-4=18.2%
46329 Wholesale of other foodstuffs 1,767 96.89 CR-4=14.1%
Legend
High Concentration Low Concentration No Concentration
Source: Frost & Sullivan Analysis based on DOSM, WRT Census 2014
Within Wholesale of dairy products (46322), one company holds more than 59.4% of the market
share with a HHI of 3,528.80.
Table 28: MSIC Code with High Concentration in Wholesale Trade Industry, Malaysia
MSIC Code Name of Establishment Market Share HHI
46322 Company A 59.4% 3,528.80
46322 Company B 14.5% 211.03
46322 Company C 11.0% 121.77
46322 Company D 4.2% 17.99
Source: Frost & Sullivan Analysis based on DOSM, WRT Census 2014
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7.1.2 Market Concentration in Retail Trade Industry
Based on WRT 2014 Census data, except „Retail sale of dairy products and eggs in in specialised
stores‟ and „Retail sale of tea, coffee, soft drinks, mineral water, and other beverages in in
specialised stores‟ which has high concentration rest of the categories have low to no concentration.
Table 29: Market Concentration in Retail Trade Industry by MSIC Code, Malaysia
MSIC
Code Description
Number of
Establishments HHI
Concentration
Ratio
47213 Retail sale of dairy products and eggs in
specialized stores 161 2,696 CR-4=62.7%
47222
Retail sale of tea, coffee, soft drinks,
mineral water, and other beverages in
specialized
1,094 1,765 CR-4=52.1%
47199 Other retail sales in non-specialised
stores n.e.c. 8,441 680 CR-4=29.6%
47192 Department stores and supermarket 153 556 CR-4=38.4%
47217
Retail sale of mee, kuey teow, mee
hoon, wantan skins, and other food
products made from flour or soya in
specialized stores in specialised stores
398 496 CR-4=35.8%
47114 Convenience stores 314 365 CR-4=29.1%
47191 Department stores 485 317 CR-4=29.5%
47211 Retail sale of rice, flour, other grains and
sugars in specialised stores 1,732 288 CR-4=28.2%
47216 Retail sale of bakery products and sugar
confectionery in specialised stores 2,914 243 CR-4=24.5%
47722 Stores specialised in the retail sale of perfumery, cosmetics, and toilet articles
4,947 243 CR-4=25.7%
47112 Supermarket 1,108 218 CR-4=21.8%
47193 Hypermarket 124 211 CR-4=20.0%
47219 Retail sale of other food products n.e.c. in specialised stores
4,401 148 CR-4=19.9%
47113 Mini market 5,704 129 CR-4=18.9%
47711 Retail sale of articles of clothing, articles of fur, and clothing accessories in specialised stores
13,054 77 CR-4=14.5%
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MSIC
Code Description
Number of
Establishments HHI
Concentration
Ratio
47194 Newsagent and miscellaneous goods store
365 76 CR-4=10.8%
47510 Retail sale of textiles in specialised stores
7,197 71 CR-4=13.5%
47111 Provision stores 50,187 20 CR-4=5.9%
Legend
High Concentration Low Concentration No Concentration
Source: Frost & Sullivan Analysis based on DOSM, WRT Census 2014
Within „Retail sale of dairy products and eggs in specialised stores (47213)‟ one company has 51.2%
of the market share with a HHI of 2,624.71. Within Retail sale of tea, coffee, soft drinks, mineral
water, and other beverages in specialised stores (47222) one of the company than 41.3% of the
market share with a HHI of 1,702.
Table 30: MSIC Code with High Concentration in Retail Trade Industry, Malaysia
MSIC Code Name of Establishment Market Share HHI
47213 Company A 51.2% 2,624.71
47213 Company B 4.2% 18.00
47213 Company C 4.0% 15.70
47213 Company D 3.3% 10.69
47222 Company E 41.3% 1,702.32
47222 Company F 5.0% 25.30
47222 Company G 3.8% 14.14
47222 Company H 2.0% 4.09
Source: Frost & Sullivan Analysis based on DOSM, WRT Census 2014
Notes and Limitations
1. Market concentration in this market review was calculated based on revenue data from DOSM‟s WRT census 2014.
2. The market concentration section only covers the selected 5-digit MSIC codes, which are the focus of this market review.
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7.2 Competition Concerns in the Wholesale and Retail Trade Industry
7.2.1 Introduction
Section 4 of the Competition Act 2010 prohibits horizontal and vertical agreements between
enterprises where an agreement has the object or effect of significantly preventing, restricting or
distorting competition in any market for goods and services. For the Act, “agreement” has the
broadest meaning possible and includes any form of contract, arrangement or understanding,
decision by associations, and concerted practices. Such agreements need not be legally enforceable
to fall within the ambit of the Act. From a competition law perspective, the analysis of theories of
harm statements will highlight whether or not a particular conduct is anti-competitive.
In line with Section 4 of the Act and based on international studies, 12 theories are identified which
can affect competitors within the industry, suppliers, and/or consumer outcomes in wholesale and
retail services trade. Theories of harm can be defined as statements of harmful practices which
could decrease competition among competitors, such as hardcore cartel or abuse of market-
dominant positions or monopolisation. Analysing the theories could shed light on competition, and
ultimately how the practice can harm consumers.
For this market review, 12 possible competition concerns are studied. The following section provides
detailed description and observation in Malaysian context.
7.2.1.1 Observation in Malaysia
The following table indicates if the stated possible competition concern is observed in Malaysia
based on findings from the industry survey and other interactions.
No. Possible Competition Concern Observation in Malaysia
1 Downstream buyer power of large
supermarkets
Yes
2 Dominant Local Retail Players No
3 Price flexing Yes
4 Predatory Pricing Yes
5 Suppliers of products have market power Yes
6 Upstream producers restrict rivals' access
to essential ingredients
No
7 Collusion by firms at some level of the
supply chain
Yes
8 Collective denial of entry to newcomers No
9 Exclusive distribution Yes
10 Price fixing Yes
11 Tying products No
12 Bundling Yes
7.2.1.1.1 Level of Issue and Attention Warranted
Out of the 12 possible competition concerns that were studied, through IDIs and survey eight of the
behaviours were observed in Malaysia.
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No. Possible Competition Concern Survey questions pertaining to the
concern
1 Downstream buyer power of large
supermarkets
Q35: Large players are dominating and
influence the market
2 Dominant Local Retail Players Q37: Some competitors agree to divide or
allocate customers, suppliers or territories
among themselves rather than allowing
competitive market forces to work
3 Price flexing Q25a. Is the pricing of your products the
same across all your shops / for all your
clients?
Q37: Some companies sell the same
product at different prices to different
buyers, in order to maximize sales and
profits.
4 Predatory Pricing Q27a. Has your company sold any product
below cost price before?
Q37: Some companies are pricing their
goods/services at such a low level that
other firms cannot compete and are forced
to leave the market.
5 Suppliers of products have market power Q35: Suppliers are having higher bargaining
power than buyers
Q21a. Does your company‟s supplier
influence or control the pricing of your
products bought from them?
Q31a. Are there any clauses in the contract
detrimental to your business?
6 Upstream producers restrict rivals' access
to essential ingredients
Q37: Some parties collude to choose the
winner of a bidding process while others
submit uncompetitive bids
7 Collusion by firms at some level of the
supply chain
Q37: Some parties collude to choose the
winner of a bidding process while others
submit uncompetitive bids.
Q37: There are agreements between
competing companies, or between a
company and an individual or business, that
stipulates that they refuse to do business
with another
8 Collective denial of entry to newcomers Q37: There are obstacles or hindrances that
make it difficult to enter a given market
9 Exclusive distribution Q29. a. Do you have any exclusive
agreement with any of your
supplier/wholesaler?
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No. Possible Competition Concern Survey questions pertaining to the
concern
Q37: A retailer or wholesaler is 'tied' to
purchase from a supplier on the
understanding that no other distributor will
be appointed or receive supplies in a given
area.
10 Price fixing Q37: Some group of businesses decides to
“fix” their prices and dissuades others to
compete
11 Tying products IDI: 25. Have you experienced selling or
purchasing any kind of tying product? What
is your view on this matter? Is there any
specific reason for this?
12 Bundling Q37: A company provides a product or
service on the condition that a customer
purchases some other product or service.
IDI: 26. Have you experience selling or
purchasing any kind bundling product?
What is your view on this matter? Is there
any specific reason for this?
Level of attention warranted is determined based on the responses reveived from the survey. As can
be seen, „downstream buyer power of large supermarkets‟ and „suppliers of product have market
power‟ were found to be the highest issue which require attention of MyCC and other stakeholders.
Table 31: Level of Attention Warranted for the Potential Anti-Competitive Concern
No. Issue Observation in Malaysia Level of Attention Warranted
1 Downstream buyer
power of large
supermarkets
83% of the respondents
agreed or strongly agreed
that large players dominate
and influence the market.
2 Suppliers of
products have
market power
83% of the respondents
indicated that „suppliers have
higher bargaining power than
buyers.
3 Bundling 74% of respondents provide
a product or service on the
condition that the customers
purchase some other
products or services.
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4 Collusion by firms at
some level of the
supply chain
72% of the respondents
indicated that there are
agreements between
competing companies, or
between a company and an
individual or business, that
stipulates that they refuse to
do business with another.
5 Exclusive distribution
72% of the respondents cited that a retailer or wholesaler is 'tied' to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area.
6 Price Fixing 71% of the respondents agreed or strongly agreed that some group of businesses 'fix' their product prices and dissuades others to compete.
7 Price flexing 68% of respondents indicated that they agree or strongly agree that some companies within the industry sell the same product at different prices to different buyers to maximise sales and profits.
8 Selling Below Cost 65% of respondents stated that some companies in the industry price their goods/services at such a low level that other firms cannot compete and are forced to leave the market.
Source: Frost & Sullivan based on Industry Survey and In-depth Interviews with Industry Participants
Detailed Analysis of Competition and Consumer Protection
This section sets out the theories of harmful practices in wholesale and retail trade industry and
examines the implications for competition and consumers in Malaysia by drawing evidence gathered
through industry and consumer interviews and surveys.
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7.2.1.2 Downstream Buyer Power of Large Supermarkets
7.2.1.2.1 Description of Practice
Suppliers may be forced to accept lower prices for products sold to the largest supermarkets (e.g.,
Giant and Cold Storage, Tesco, and Mydin), or risk losing exposure of its products in the territory.
The scale of some supermarkets – classified as hypermarkets in some cases – may enable them to
extract favourable terms in negotiating the cost per unit of FMCGs from suppliers or distributors.
This is especially true if the supermarket chain accounts for a large proportion of the supplier‟s
revenue in a particular territory or region.
7.2.1.2.2 Implications on Consumers and/or Competition
The high level of buyer power may pose excessive risks and costs on suppliers, and result in the
supermarket negotiating such low prices that suppliers would need to recoup the loss in profits
through an increase in prices they charge to the supermarket‟s competitors (i.e., “waterbed” effect),
leading to consumer harm. Competitors could be smaller convenience stores and traditional
retailers, which each account for a small share of the supplier‟s revenues, and therefore may not
have the countervailing buyer power to refuse higher prices. Smaller competitors could be forced out
of the market as a result, given the higher sourcing costs to the detriment of competition overall. The
UK‟s Office for Fair Trading (now the CMA) expects the waterbed effect to damage the fast-moving
consumer goods (FMCG) retail segment, reducing consumer choice and amenity.30
An alternative possibility is that the downward pressure on prices could drive some suppliers out of
business in the long term, reducing the choice of FMCGs available to consumers.
7.2.1.2.3 International Examples
In actual practice, downstream buyer power of supermarkets refers to the dominant buying power of
large supermarkets that buy in bulk quantities, and thus receive better terms from suppliers. A critical
element in considering buyer power is the proportion of the total supply of a particular product going
to one of the largest supermarket chains in the country. In most cases, retailers that sell products at
discounted prices allege that large supermarket chains would threaten their suppliers to stop
providing such products or they would stop selling the product. Such pressure may induce the
supplier to put pressure on smaller retailers, even perhaps to the extent of cancelling such supply.
One example of such a practice occurred in Australia. In 1997, the Australian Bureau of Statistics
(ABS) estimated that the three largest supermarket chains, namely, Woolworths, Coles, and
Franklins, accounted for 62% of the market share.31
In 1996, the Australian Competition and
Consumer Commission alleged that Woolworths (trading as Safeway Stores Pty Ltd) misused its
market power by stopping the sale of George Weston bread to discourage the bakery company from
supplying its bread to small retailers at discounted pricing. Woolworths‟ action succeeded in forcing
George Weston to stop supplying to small retailers at discounted prices. The Full Federal Court
30 OFT (2006), “Grocery market: The OFT's reasons for making a reference to the Competition
Commission” https://assets.publishing.service.gov.uk/media/555de47840f0b669c4000141/oft845.pdf
31 Joint Select Committee on the Retailing Sector (1999), Fair Market or Market Failure, Parliament
of the Commonwealth of Australia, Canberra.
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concluded that Woolworths‟ action of deleting bread products from George Weston was not aimed at
obtaining the lowest prices, but rather to stop the supplier from selling cheap generic bread to keep
market prices up. In the end, Woolworths was fined USD8.9 million for breaching sections 45, 46,
and 47 of the then Trade Practices Act 1974.
7.2.1.2.4 Observation in Malaysia
Interviews with food distributors revealed that large retailers (hypermarkets/supermarkets)
tend to impose commercial conditions on distributors/suppliers. Back-margins (other
discounts/allowances, listing fees) are imposed on distributors/suppliers for promoting and
selling their products, affecting distributors‟ profit margins.
Close to 83% of the respondents agreed or strong agreed that large players are dominating
and influence the market
Over 81% of respondents indicated that they agree or strongly agree that there are a few
business groups that “fix: their product prices and dissuade others from competing.
Product Category Observation in Wholesale and Retail Trade
Food & beverages Yes
Personal care & toiletries Yes
Household cleaning products Yes
Clothing Yes
7.2.1.2.5 Mitigating Considerations
If the waterbed effect were to occur, retailers competing with big supermarkets might pass on the
higher prices to consumers. The overall impact on consumers would depend on the balance of the
waterbed effect and potentially lower prices faced by the big supermarkets‟ customers. There may
also be distributional considerations, as the demographic profiles of supermarkets and other FMCG
retailers‟ customers may differ. For example, lower prices in supermarkets may favour customers in
urban areas to the detriment of rural customers.
7.2.1.3 Dominant Local Retail Players
7.2.1.3.1 Description of Practices
Some retailers may have a position of market dominance by virtue of where the store is located.
This may allow them to charge prices in excess of what might correspond to competitive prices, or
offer inferior services (e.g., shorter opening hours). This issue may arise even though national
market share data suggests that no particular retailer having an especially large presence. Rather,
the issue is the presence of local monopolies that may restrict consumers from having a viable
alternative to using a given retailer‟s store(s) because there are no rivals nearby.
Whether a retailer is considered a local monopoly depends on the distances of alternative retailers
and the associated travel costs. They may, therefore, be more likely to have a presence in smaller
towns and rural areas, where the market is relatively small. However, it is possible for a retailer
operating a number of sites urban areas, having minimal or no presence of rival retailers.
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7.2.1.3.2 Implications on Consumers and/or Competition
A chain operating in a location devoid of competitors could exploit its position by charging higher
prices in that location than it does in locations where it faces competition. For consumers in areas
with fewer competing stores, the harm is straightforward in that they will have to pay higher prices or
make do with inferior services. Some consumers avoid using the most conveniently located store
because it is abusing its dominant position, and are willing the incur the added costs and
inconvenience of using another store in a more competitive location (assuming such stores exist).
A local monopoly could arise given the effect of proximity of outlets to consumers. Shops located
between places of work and residential areas may be conveniently located for some consumers who
spend a large proportion of their budget at them. These consumers may be considered somewhat
“trapped” if there is insufficient retailer competition in these areas.
Being a local monopoly means that a retailer may act as a “gatekeeper” to the consumers it serves.
This could give it particular buyer power in terms of suppliers wanting to reach customers in that
area. These suppliers may be forced to accept a lower price if they want to sell their products to the
retailer‟s customers. There is also the possibility of consumer harm arising from such behaviour, as
there may be FMCGs that the retailer chooses not to stock. The absence of competitors means that
the retailer does not need to worry about a fall in footfall if it fails to stock certain FMCGs.
7.2.1.3.3 International Examples
A study conducted by the Institute for Local Self-Reliance found that Wal-Mart captures 50% or more
of grocery sales in 43 metropolitan areas and 160 smaller micropolitan markets in the US. That
translates into one in every 10 metropolitan areas and nearly one in three micropolitan areas. Under
the guidelines established by the US‟ Justice Department‟s Antitrust Division in 2010, markets in
which one corporation captures more than 50% of revenue generated in a predefined market is
classed as as “highly concentrated”. The city of Lawton, Oklahoma, is one example where Wal-Mart
exerts such dominance. There are several Wal-Mart stores in the city, but limited options beyond
Wal-Mart. Local marts and other chains are inadequate substitutes for Wal-Mart as they carry only a
narrow selection of grocery items. As a result, Wal-Mart captured approximately 71% of the
expected USD238 million grocery market recorded in Lawton city in 2018. Wal-Mart‟s near-total
market control allows it to be in a position to decide which types of groceries or brands are available
for local residents, influencing their consumption habits.
7.2.1.3.4 Observation in Malaysia
Based on interactions with industry participants, currently, there is no dominant local retail player in
Malaysia. However, based on the interactions with retailers, some manufacturers dominate the F&B
and personal care product markets but not necessarily have monopoly.
Product Category Observation in Wholesale and Retail Trade
Food & beverages No
Personal care & toiletries No
Household cleaning products No
Clothing No
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7.2.1.4 Price Flexing
7.2.1.4.1 Description of Practice
Large retailers that operate in multiple locations, such as Giant and Cold Storage, Tesco, Mydin, 99
Speedmart and 7Eleven, might differentiate prices between locations. While a retailer with a single
store has to charge the same price to all its customers, a retailer with multiple stores can respond to
the competitive environment with targeted actions raising or lowering prices in just a few of its stores.
The growth of online shopping may also make it easier for retailers to engage in targeted pricing
strategies, favouring customers assessed to be most likely to switch retailer while charging higher
prices to other customers (i.e., a loyalty premium).
7.2.1.4.2 Implications on Consumers and/or Competition
Price flexing could distort competition in the market.32
It may focus price competition in locations
where low-price competitors are present and reduce it in areas where competition is weak. This may
serve as a barrier to entry for new competitors that may not have the ability to cross-subsidise low
prices in one store by charging higher prices in another. Even the threat of price flexing may be
sufficient to deter new market entrants.
There may be concerns about fairness as well since consumers at some stores could benefit from
the lower prices while consumers of another store owned by the same retailer may face higher
prices for the same FMCGs.
This practice may come in the form of direct price reductions on products or through voucher
systems where spending $X in total gives the customer a discount of $Y. A practice rewarding
customers with discounts if they spend a sufficiently large sum may disadvantage traditional retailers
that specialise in selling just a subset of FMCGs. Large chains may be able to drive such firms out of
business, reducing consumer choices over retailer. This also makes entry more difficult as the option
to start as a small retailer specialising in selling a few goods and eventually expanding the range of
FMCGs, may not be possible.
Price flexing may also affect consumer perceptions about the value for money of large retailers. This
could unfairly damage the reputation of traditional retailers that have smaller product ranges, and
therefore a lower capacity to cross-subsidise across products. In the UK, smaller retailers tend to
rely disproportionately on revenue from known-value items (KVIs), whose prices tend to be more
visible to consumers than other products.33
This means that the option of recovering losses made on
one line of products through increasing the price of KVIs can be effectively ruled out.
32 OFT (2006), “Grocery market: The OFT's reasons for making a reference to the Competition
Commission”
https://assets.publishing.service.gov.uk/media/555de47840f0b669c4000141/oft845.pdf
33 KVI: A product which is high profile or well known, where price awareness among consumers may
be higher than for most products OFT (2006).
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7.2.1.4.3 International Examples
In Australia, a report released by the Australian Competition and Consumer Commission (ACCC) in
2008 analysed the competitiveness of retail prices for standard groceries. The report included
empirical analysis of the local store pricing of Woolworths and Coles. The report found that the local
presence of a competing supermarket, in this case, Coles or Woolworths, has a significant effect on
local pricing. The report found that in 2007, consumers shopping at a Coles store with a Woolworths
supermarket located within 1 km radius paid on average 1.36% lower than consumers shopping in a
Coles store without the presence of local competition. The report also found that the local presence
of an Aldi store (discount supermarket chain) has an even higher effect on price flexing. In 2007,
consumers shopping at a Coles store with an Aldi within 1 km radius paid on average 5.15% lower
than at a Coles store without an Aldi within 5 km radius.
7.2.1.4.4 Observation in Malaysia
Price flexing is not generally practised by retailers, but used by some suppliers.
The retailers during the IDIs indicated that the pricing of products that they sell is the same
across all their outlets. However, they reduce prices while selling products online to attract
more customers.
Large manufacturers have a systematic system to determine product pricing. They mostly
follow a tiered pricing strategy; as a result; prices need not be the same across the country.
However, 68% of respondents indicated that they agree or strongly agree that some
companies within the industry sell the same product at different prices to different buyers to
maximise sales and profits. This practice was found even through the pricing data provided
by MHBN.
Product Category Observation in Wholesale and Retail Trade
Food & beverages Yes
Personal care & toiletries Yes
Household cleaning products Yes
Clothing Yes
7.2.1.5 Predatory Pricing
7.2.1.5.1 Description of Practice
A dominant firm lowers its price and deliberately incurs losses or foregoes profits in the short term to
enable it to eliminate rivals or prevent the entry of potential rivals. This practice hinders the level of
competition in the market. Large retailers or suppliers may engage in predatory pricing behaviour.
7.2.1.5.2 Implications on Consumers and/or Competition
Firms with sufficient capacity have the ability to practise predatory pricing and absorb short-term
losses. Combined with better per-unit costs of sourcing a product, which would make the per-unit
loss for the large firm smaller than for smaller incumbents or entrants, predatory pricing entails
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lowering prices. Consumer harm could arise during periods when the large firm does not have to
engage in predatory pricing because it is able to enjoy market power. After it has engaged in
predatory pricing, the firm may increase prices once rivals have exited the market. Alternatively, just
the threat of predatory pricing may be sufficient in deterring entry.
7.2.1.5.3 International Examples
In September 2000, Wal-Mart was charged with three counts of predatory pricing by the Wisconsin
Department of Agriculture, Trade and Consumer Protection for allegedly violating the state‟s antitrust
law. Similarly, Wal-Mart was charged by the German Cartel Office, along with two other supermarket
chains, of selling goods below cost. The complaint accused Wal-Mart of selling standard groceries
like butter, milk, laundry detergent, and other staple goods below cost at stores in selected towns.
For instance, the charge alleged that Wal-Mart sold a bottle of laundry detergent that cost USD6.51
for less than USD5 at several of its stores. The intention was to force competitors out of business,
thus gaining a monopoly in local markets which would allow it to recoup its losses by selling higher
prices later. In 2001, Wal-Mart settled the predatory pricing charge with the Wisconsin Department of
Agriculture, Trade and Consumer Protection. Wal-Mart admitted no wrongdoing and did not pay a
fine, but risks facing double or triple fines for future violations according to the terms of the
settlement.
7.2.1.5.4 Observation in Malaysia
Based on interactions with industry players, few large-scale retailers adopt this practice for
some of their product ranges known as invested lines. Similar views were aired during
discussions with MHBN, particularly relating to fresh foods, wherein some large players are
said to cap the prices of certain products, which in most cases, are below market prices.
From the survey, 6% of distributors, 2% of wholesalers and 1% of retailers mentioned that
they have sold some of their products below cost price to boost sales and to clear old / near
expiring stock.
Also, 65% of respondents stated that some companies in the industry price their
goods/services at such a low level that other firms cannot compete and are forced to leave
the market.
Product Category Observation in Wholesale and Retail Trade
Food & beverages Yes
Personal care & toiletries Yes
Household cleaning products Yes
Clothing Yes
7.2.1.5.5 Mitigating Considerations
Predatory prices may just be a firm responding to competitors by lowering prices, suggesting a
competitive market. The role of competition authorities is to protect competition, not competitors.
Allowing a more efficient retailer to sell goods at a lower price than its rivals benefits consumers.
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Even if the lower prices represent predatory pricing rather than a deliberate strategy of below-cost
pricing, consumers can benefit. If the attempt to predate fails and the competitor(s) remain in the
market, then consumers have enjoyed a period of especially low prices without any long-term
detrimental implications.
7.2.1.6 Product Suppliers That Have Market Power
7.2.1.6.1 Description of Practice
Some producers may abuse market power if they are the sole producer of a product. Also suppliers
have market power if they can change the prices of products, decrease quantity without intimating
the buyer (retailer/ distributor), or limit the number of products sold.
7.2.1.6.2 Implications on Consumers and/or Competition
Given the high appetite levels for a product (or sufficiently price-inelastic demand), the producer may
exploit this situation by charging higher prices to distributors and/or retailers. They may also offer a
restricted range for the product.
It is also possible for prominent suppliers to use their market power to engage in practices like
exclusive dealing and tied selling, with detrimental exclusionary effects. For example, large suppliers
like Nestle or Proctor & Gamble may require outlets to sell new products as they are launched or
guarantee favourable shelf space for their products to the detriment of rival suppliers.
7.2.1.6.3 International Examples
In 2015, the ACCC won a misuse of market power case against Visa. Visa had misused its market
power by banning rival currency conversion services on ATMs that use its cards. Visa was alleged to
have shut out other competitors in the currency conversion market by banning Australian retailers
from using other currency conversion systems, and refusing to allow foreign travellers in Australia
the option to pay for goods and services in their own currency. This practice was said to account for
up to 30% of Visa‟s USD17 billion annual revenue.
7.2.1.6.4 Observation in Malaysia
Some retailers revealed that a few large manufacturers control the prices of products sold to
consumers. These manufacturers do not allow retailers to sell their products beyond the
stipulated pricing, even if the retailer has to undertake a temporary loss. The agreement also
dictates the quantity the retailer has to purchase from such manufacturers.
Some manufacturers have a verbal agreement with the retailer to fix a promotion price for
the retailer to qualify for the promotion subsidy. In such instances, the retailer is not allowed
to sell the selected products below the agreed price, or else it will not be entitled to the
subsidy.
Based on interactions with retailers, contracts with a few large F&B manufacturers indicated a certain percentage of their products to be displayed and sold by retailers; the larger the retail set up, the higher the percentage.
For some products, especially international branded goods (clothing/cosmetics), suppliers
normally impose the quantity that can be purchased. The quantity mentioned in the contract
increases every year in most circumstances.
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Discussions with the MHBN revealed that they have observed groups that have influence
over the market prices of certain products. These players are usually middlemen along the
value chain.
On the industry survey, 83% of the respondents indicated that „suppliers have higher
bargaining power than buyers.
Over 72% of companies agree or strongly agree with the statement about there being
agreements between a manufacturer and wholesaler/distributor/retailer not to sell a product
below a specified price.
Product Category Observation in Wholesale and Retail Trade
Food & beverages Yes
Personal care & toiletries Yes
Household cleaning products Yes
Clothing Common in international branded products
7.2.1.6.5 Mitigating Considerations
Competition is dynamic, not static, so temporary market power may not be a disadvantage.
Consumers could benefit from innovation and new products coming into the market. While for
producers, the ability to earn profits is a significant incentive to innovate and key rationale for
patenting inventions. Consequently, allowing a supplier to charge higher prices for a patented or
newly-launched product may be in consumers‟ long-term interests. This argument may be relatively
more important for FMCGs produced specifically for the Malaysian market. To the extent that the
product under consideration is produced by a multinational operating in many markets, the profits
available from setting high prices in Malaysia may not be enough to spur investment in R&D.
7.2.1.7 Upstream Producers that Restrict Rivals’ Access to Essential Ingredients
7.2.1.7.1 Description of Practice
The F&B processing market, and to some extent, personal care product and toiletries manufacturing
could experience sub-optimal competition in upstream markets as these FMCGs need to source
ingredients and foodstuffs for their goods. The entity sourcing (or even producing) these materials
and selling them to distributors or retailers could command excessive power over firms downstream
in the production chain.
7.2.1.7.2 Implications on Consumers and/or Competition
A large-scale sourcing/producing entity may be the only viable source for processors requiring large
quantities of ingredients. This may give sourcers/producers a degree of monopoly power over
processors, allowing them to charge high prices.
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Where there is vertical integration, such that the entity with the only viable source of materials is also
a processor, there is scope for market foreclosure. Market foreclosure or vertical foreclosure is the
production limitation put on a producing organisation, if either it is denied access to a supplier (an
upstream foreclosure) or denied access to a downstream buyer. Large-scale sourcing entities may
choose to disadvantage rival processors, including ones that are more efficient. The competition
between processors could ultimately not benefit consumers.
The extent to which consumers are harmed by absorbing passed-on higher prices depends on the
contribution of ingredients to the final product. Personal care products typically comprise several
disparate ingredients, some of which may be purchased from a monopsony middle-man; whereas in
the case of foodstuffs the item sourced may be identical to one finally purchased by the consumer
(and so the consumer feels the full effect of the higher sourcing cost).
7.2.1.7.3 International Examples
In December 1998, the US Federal Trade Commission (FTC) charged Mylan (the country‟s second-
largest generic drugmaker) with the restraint of trade, monopolisation, and conspiracy to monopolise
the drug-making market. The charge concerned two generic drugs used to treat anxiety – lorazepam
and clorazepate – through exclusive dealing arrangements. Mylan was charged with conspiring with
other parties to deny its competitors access to essential ingredients to manufacture the anti-anxiety
drugs. The conspiracy involved a 10-year exclusive supply agreement for the essential ingredients
between Mylan and the suppliers in which the suppliers would have received a percentage of profits
from drug sales. In the end, FTC successfully stopped implementation of the exclusive agreement
and approved a US$100 million settlement with Mylan.
7.2.1.7.4 Observation in Malaysia
Based on industry interactions to date, currently, no players impose any restrictions, directly or
indirectly on their rivals‟ access to essential ingredients.
Product Category Observation in Wholesale and Retail Trade
Food & beverages No
Personal care & toiletries No
Household cleaning products No
Clothing No
7.2.1.8 Collusion by Firms at Some Level of the Supply Chain
7.2.1.8.1 Description of Practice
Firms may agree not to compete on certain aspects, such as the prices they charge or quantities
they supply to the market. A simple form of collusion would be to agree on the prices to be charged.
In other cases, the suppliers may agree to segment the market (e.g., geographically), only serving
specific parts of the country and not competing for market share elsewhere.
Such collusion could occur at any stage of the supply chain, although it is more likely to happen in
instances where there are relatively few firms, the products are broadly similar, monitoring rivals‟
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behaviour (e.g. pricing decisions) is straightforward, and it is possible to “punish” firms that deviate
from the collusive agreement. Firms can monitor prices by subscribing to price-monitoring services
that provide pricing information in real-time, and allow users to announce planned price changes.
Inter-firm agreements can be maintained either through decisive agreements or without
communication, such as through a mutual understanding of what could happen if one of them were
to renege on the implicit agreement. The latter would constitute tacit collusion. Collusion may also
occur where a “market leader” sets a price which rival firms follow, perhaps settling on a price high
enough that even the least efficient firm in the market is able to earn a profit. Announcements about
price changes ahead of time may help ensure that rival firms are not caught off guard and have time
to change their prices.
7.2.1.8.2 Implications on Consumers and/or Competition
Collusion (tacit or otherwise) could result in higher prices than under open competition. Wherever
the collusion occurs in the supply chain, it is expected to ultimately feed through, at least partially, to
consumers in the form of higher prices. Collusion could also discourage industry participants from
innovating, adversely impacting consumers in terms of less variety.
The higher prices in a collusive setting may also allow the continued survival of inefficient firms that
would otherwise have exited the market.
7.2.1.8.3 International Examples
UK‟s Office of Fair Trading (OFT) launched a price-fixing investigation in 2002 and 2003 on the
groceries retail sector. In its investigation, OFT found that the UK‟s biggest supermarket chains and
dairy companies violated the country‟s competition law by fixing the prices of milk, cheese, and
butter. The companies were found coordinating among themselves to increase the retail prices of
certain dairy products. The OFT reported that customers were being charged 15p extra for a quarter
pound of butter, 15p extra for a half-pound of cheese, and 3p extra for a pint of milk. This action was
estimated to have cost consumers about £270 million. The case was closed in 2011 and the OFT
found three infringements committed by parties and imposed penalties totalling £49.51 million.
7.2.1.8.4 Observation in Malaysia
Industry participants commented that the current wholesale and retail industry in Malaysia offers a
level playing field, and they do not need to collude with other firms to distort the market.
However, about 75% of surveyed companies agreed that some parties do collude to choose the
winner of a bidding process while others submit uncompetitive bids. Also in the survey, 72% of the
respondents indicated that there are agreements between competing companies, or between a
company and an individual or business, that stipulates that they refuse to do business with another.
Product Category Observation in Wholesale and Retail Trade
Food & beverages Yes
Personal care products Yes
Personal care & toiletries Yes
Clothing Yes
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7.2.1.9 Collective Denial of Entry to Newcomers
7.2.1.9.1 Description of Practice
Firms may work collectively to deny market entry to potential rivals. For example, essential
infrastructure for production may be controlled by the colluding firms that can refuse to allocate it to
newcomers. Vertically integrated FMCG producers/distributors may agree to distribute only their own
products and refuse to distribute FMCGs supplied by other producers. The new entrant would thus
need to develop its own distribution network, which may be prohibitively expensive.
7.2.1.9.2 Implications on Consumers and/or Competition
Lack of access to crucial resources or infrastructure could hamper the ability of potential competitors
to enter and compete effectively. This may result in higher prices as inefficient producers may be
able to keep out more efficient producers. Consumers may also have fewer products to choose from,
and in the longer term, the benefits from innovation will be less due to the muted competitive
incentives to innovate.
7.2.1.9.3 International Examples
In 2004, the Finnish Competition Authority (FCA) filed an infringement fine of EUR1 million to
regional telecommunication company, L nnen Puhelin Inc., for abusing its dominant position in the
broadband services market. L nnen Puhelin has been the sole provider of broadband connections in
the region with more than 90% market share. The FCA reported that L nnen Puhelin had breached
the Competition Act by refusing to grant new players with access to the regional network and
favouring its service providers by charging higher fees to competitors. The price bias made it difficult
for competitors to gain access to the consumer broadband services market.
7.2.1.9.4 Observation in Malaysia
As Malaysia is a relatively free market, there are currently no practices preventing the entry of
newcomers into the market. In the past, however to some extent, when foreign hypermarkets
entered Malaysia, there were some entry barriers pertaining to the financial strengths of these
players, the presence of an effective and well-managed supply chain, technological innovation, and
wider retail experiences. However, in recent years this trend is shifting due to the active participation
of local players such as Econsave, NSK, and Checkers.
Product Category Observation in Wholesale and Retail Trade
Food & beverages No
Personal care & toiletries No
Household cleaning products No
Clothing No
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7.2.1.10 Exclusive Distribution
7.2.1.10.1 Description of Practice
A large distributor may be able to extract exclusive supply rights from a supplier/producer in a
particular territory or region. This includes the possibility that imported FMCGs are exclusively
supplied to a single distributor (possibly a vertically integrated retailer/distributor). Such
arrangements may be an attractive option for smaller suppliers that see it as a way of guaranteeing
a certain level of demand for their products, especially if the distributor‟s total demand for the product
exceeds the production capacity of an individual supplier. A distributor that can secure such terms
with multiple suppliers in a given area may put itself in a monopsony position in the area, and
effectively lock potential competitors out of the market for sourcing the product in that area.
On the other hand, a supplier may require that only one distributor can hold the rights to resell its
product. This could amount to a form of vertical integration in substance rather than name, since the
exclusivity terms may extend to limiting the extent to which the distributor can sell the product in
other territories.
7.2.1.10.2 Implications on Consumers and/or Competition
The consequences of exclusive distribution for consumers could conceptually affect both product
prices and availability in different territories. A supplier limiting the ability of a distributor to sell the
product in other territories would mean the product is more difficult to obtain for customers in these
territories (although there may be supplier-distributor pair of competitors carrying out the same
practice in those territories). The distributor that can purchase all the produce of a supplier may be
able to resell the product in the territory at a large mark-up to consumers.
7.2.1.10.3 International Examples
In the case of Microsoft and Netscape, the manufacturers of browser software, Internet Explorer and
Navigator respectively, have exclusive dealings with computer manufacturers and Internet access
providers considered as a form of anti-competitive conduct. Their exclusive dealings require
foreclosure of a sufficient share of distribution to rivals for a significant time so that what remains to
serve their competitors cannot support a manufacturer of minimum efficient scale forcing the
manufacturer‟s rivals to operate at a considerable cost disadvantage for an extended period. This
exclusivity could force existing competitors to withdraw and/or prevent the entry of new
manufacturing competitors until sufficient distribution becomes available again.
7.2.1.10.4 Observation in Malaysia
Industry players interviewed indicated that some large retailers have exclusive distribution
agreements for a few products, particularly, international brands
From the survey, 72% of the respondents cited that they agreed or strongly agreed that a retailer or
wholesaler is 'tied' to purchase from a supplier on the understanding that no other distributor will be
appointed or receive supplies in a given area.
Product Category Observation in Wholesale and Retail Trade
Food & beverages Yes
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Personal care & toiletries Yes
Household cleaning products Yes
Clothing Yes
7.2.1.11 Price Fixing
7.2.1.11.1 Description of practice
Big supplier companies (e.g., Nestle, Proctor & Gamble, Coca-Cola, and Unilever in the FMCGs
segment) may prohibit resellers/redistributors from independently pricing their products. They can
force their distributors to sell their products at a price no lower than the specified minimum price.
Distributors that discount the products lower than the minimum price may be penalised by these
suppliers. The practice prohibits resellers from independently pricing the given products, thus
restricting competition in that product segment.
Big companies also use this pricing strategy for "loss leader selling" activities. In other words, they
sell some products at a loss to attract customers to buy other products at regular prices.
7.2.1.11.2 Implications on Consumers and/or Competition
Price fixing (or resale price maintenance) by large supplier companies may be harmful as it
eliminates intra-brand competition among distributors and manufacturers if the product is sold at a
loss, and lowers economic efficiency. The implications of stemming competition can be viewed as
predatory pricing, as it harms consumers over the long term via higher prices.
Moreover, if the given product has fewer substitutes in the market, this practice may severely limit
consumer choice in the market, decreasing consumer welfare.
7.2.1.11.3 International Examples
In China, most industry associations are quasi-governmental and serve as forums through which
member companies coordinate their activities; in some cases, they even coordinate price-fixing
among them. This kind of anti-competitive behaviour involving industry association is rampant in
China and a salient issue under the Anti-Monopoly Law (AML). In September 2017, China‟s National
Development and Reform Commission (NDRC) issued penalties to three Chinese chemical
manufacturers worth a total of USD5.3 million for their involvement in price-fixing of polyvinyl
chloride (PVC) when the three attended the Western China PVC association conference.
7.2.1.11.4 Observation in Malaysia
Though from the interviews, none of the players mentioned about price fixing practice, from the
survey it was found that close to 71% of the respondents agreed or strongly agreed that some group
of businesses 'fix' their product prices and dissuades others to compete.
Product Category Observation in Wholesale and Retail Trade
Food & beverages Yes
Personal care & toiletries Yes
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Household cleaning products Yes
Clothing Yes
7.2.1.12 Tied Selling Products
7.2.1.12.1 Description of Practice
A supplier may make the sale of one product (the tying product) to a distributor/retailer conditional
upon the distributor also purchasing another product (the tied product). If the tying is not justified by
the nature of the product or commercial usage (e.g., complementary products, such as a pestle and
mortar, if both are not already sold together), this practice could represent an abuse of the supplier‟s
dominant position.
7.2.1.12.2 Implications on Consumers and/or Competition
Tying two products typically benefits the consumer, given that both products are often consumed
together.34
However, the harm to consumers resulting from this practice is when the tying supplier is
dominant, and the practice is not justified by efficiencies.
Tying reduces the number of potential customers available for its competitors in the market of the
tied product. This could cause existing competitors to become marginalised or exit from the market
altogether and create a barrier for potential entrants. This could allow the supplier to extract higher
profits from the sale of the tied product, the costs of which to the distributors are passed to
consumers as higher prices.
Tying can also result in adverse consumer outcomes if they are forced to buy additional products
they do not need. This could either be direct, e.g., by including mandatory services or products to the
main one the consumers are interested in, or indirect, by having the auto-inclusion of certain
products which consumers need to explicitly opt out.
7.2.1.12.3 International Examples
In December 2018, China‟s State Administration for Market Regulation (SAMR) issued an
infringement decision to Hunan Er-Kang Medical Operation and Henan Jiushi Pharmaceutical with a
total fine of CNY10.04 million for abusing their dominance in the supply of chlorpheniramine active
pharmaceutical ingredients (API) in China. The parties were said to have abused the anti-
competition act by engaging in the tied selling activity by requiring downstream purchasers of
chlorpheniramine API to also purchase starch capsules, medical sugar cane, and other medical
supplements from them when there was no direct relation in the usage of those supplements with
chlorpheniramine API. The tied selling was found to restrict the downstream purchasers‟ right to
choice in the market as they were forced to buy the items even when there is no need for them as
compared to buying the said supplements separately when required. In this case, Hunan Er-Kang
and Henan Jiushi breached Article 17(5) of the AML for imposing tied selling requirements without
objective reasons.
34 CompTIA (2006), „Competition, Competitors, and Consumer Welfare‟
https://ec.europa.eu/competition/antitrust/art82/092.pdf
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7.2.1.12.4 Observation in Malaysia
So far, tying selling seems to be uncommon unlike bundling practices. Both suppliers/distributors, as
well as retailers, tend to adopt bundling practices.
Product Category Observation in Wholesale and Retail Trade
Food & beverages No
Personal care & toiletries No
Household cleaning products No
Clothing No
7.2.1.13 Bundling
7.2.1.13.1 Description of Practice
Bundling involves offering multiple products together at a different price from that which would be the
result of totalling the prices of the individual goods and services. Selling practices can be divided into
three categories: pure components (also known as unbundling or separate pricing), where the
components are sold separately; pure bundling or tied sales, occurring when the purchase can be
made only jointly (as discussed above); and mixed bundling, where both options to buy the services
or goods separately and together are available.
7.2.1.13.2 Implications on Consumers and/or Competition
Bundling may be said to exploit consumer preferences for convenience, as buying a set of cleaning
products together is simpler than searching a shop or several shops for these goods. Knowing this,
the firm may charge a higher price for the set of products than the sum of prices of the individual
items.
An implication for competition may be market foreclosure, whereby an FMCG producer dominant in
one product space can leverage that into other markets and threaten the survival of competitors and
potential entrants. Market foreclosure can impact consumer welfare if it undermines competition in
the market by increasing prices and/or reducing choice and quality.
7.2.1.13.3 International Examples
In France, the French Competition Commission imposed a fine of EUR15.36 million to Wyeth Hellas
and EUR384.64 million to Phadisco for illegally bundling a rebate scheme by offering a free quantity
of Meningitec (meningococcal vaccine) with the purchase of a specific quantity of Prenevar (another
pneumococcal vaccine). Wyeth and Phadisco had infringed section 6(1) (d) of the Law by abusing
their dominant position in the market for the pneumococcal vaccine since the quantitative discounts
offered to doctors and pharmacists were not economically justified.
7.2.1.13.4 Observation in Malaysia
Suppliers typically bundle low-demand products with high-selling items as a strategic
business move to increase sales.
Retailers usually bundle products to clear stocks.
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Manufacturers bundle products during promotional periods to increase sales
The survey found that 72% of respondents provide a product or service on the condition that the customers purchase some other products or services.
Product Category Observation in Wholesale and Retail Trade
Food & beverages Yes
Personal care & toiletries Yes
Household cleaning products Yes
Clothing Yes
7.2.1.13.5 Mitigating Considerations
Tying may be a sensible practice for certain types of products. Selling two complementary products
together could be beneficial for consumers who do not have the time to search for them
independently. As such, there may be a convenience value in purchasing bundled products.
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8 PRELIMINARY RECOMMENDATIONS
8.1 Issues and Challenges
Based on the preliminary assessment through discussions with industry players, stakeholders and
surveys, the following issues and challenges have been identified:
Market driven issues Regulatory driven challenges
High cost of operation (Affects all retailers) Lack of understanding of Anti-profiteering Act
among retailers (Affects all retailers)
Difficulty in finding local labour (Affects all
retailers and wholesalers/distributors)
Frequent Review of Statutory Minimum Wage
(Affects micro, small and medium enterprises)
e-Commerce proliferation (Affects all retailers) Logistics issues for products shipped from
Semenanjung to Sabah/Sarawak (Affects all
retailers)
Inconsistency with SME supplies (Affects large
retailers)
Limited awareness of Competition Act 2010
(Affects micro, small and medium enterprises)
Inability for local SME suppliers to adhere to
requirements (Affects large players)
Introduction of digital tax (Affects micro, small
and medium enterprises)
Back margin/Trading terms (Affects suppliers) Statutory reporting requirement for only foreign
players
Prevalent high logistic cost in Sabah, Sarawak
and rural areas
The issues and challenges identified within the wholesale retail distributive trade can be classified
into 2 categories, which are market driven issues and regulatory driven issues. The market driven
issues are issues caused by determinants and factors happening within the market whereas
regulatory driven challenges are challenges faced by industry players due to certain regulations.
8.1.1 Market Driven Issues
High cost of operation: High cost of operations has been major burdens to many businesses,
especially small and medium retailers. As it is, many businesses are struggling to survive the
rising cost of doing business in the current weak economic conditions. Rental contributes 20% to
the cost of doing business for retailers. On top of the standard annual rental increase, some
landlords will request for massive rental increase upon contract renewal. Rental cost is higher
particularly for those who have set up their operations in malls for a long period of time. Based
on the interactions with industry participants, they are subject to high rental revision upon
renewal of contracts on top of the annual rental increase, while a new entrant will be able to rent
the space with a much lower rental agreement which is in accordance with the market price. This
has caused a lot of big retailers/foreign hypermarkets to review their business strategy and some
decided to cease operation within that area due to rental increased. The cost of operations will
further increase due to higher minimum wages from 2020 as well as the proposed removal of
petrol subsidy which can lead to a higher cost of transportation, which eventually lead to an
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increase in operating cost for retailers and possible increase in the price of goods. The industry
is in the view that these increase in cost of doing business will result in the inability of businesses,
particularly SMEs, to absorb the sudden impact of rising wage and operation cost which can
potentially result in layoffs when they could not sustain the negative margins, however, there is
no sufficient data to support this theory.
Difficulty in finding local labour: Most retailers seem to share the same issues with regards to
difficulty in sourcing and retaining local labours/talents as most of the locals are not interested to
pursue their career in retail jobs and the attrition rate among locals in retail industry is one of the
highest especially at entry/low level jobs. Many foreign retailers are struggling to achieve their
minimum requirement for local talents/labours, and most reported that they can only meet 20%
instead of the 30% requirement stated by government. Some big retailers have started to use
self-service payment terminals in their hypermarkets to address lack of cashiers‟ issue. However,
small and local retailers do not enjoy the same luxury as the big retailers, due to the high cost to
set up a self-service payment terminal in their outlets. The cost to install self-service payment
terminals could go up to RM80k for each terminal, which is higher than hiring human cashiers.
This will definitely add up to their cost of operations, as such it is very challenging for small
players to address this labour issue.
e-Commerce proliferation: Competition in the retail industry is very intense and consumers are
more price-sensitive today, especially with the availability of e-commerce. Most retailers
expressed their grievances over e-commerce platforms that have now gained more traction than
the brick and mortar businesses due to price differences. Generally, the retail price of some
products sold online is much lower than the ones sold in physical stores, but there are also
cases where the online prices are even lower than the cost price of the physical store retailers,
which has been observed especially in cases where manufacturers themselves have used the e-
commerce platforms to reach the mass market. The growing trend of e-commerce demands the
need for businesses to innovate their services and provide an Omni channel retail strategy that
matches the rapid consumer demands.
Inconsistency with SME supplies: Based on interactions with industry participants, retailers
indicated that majority SME suppliers do not offer a wide range of product varieties/options,
which is one of the major reasons these large retailers could not meet the minimum requirement
for local supplies. The incapacity of these suppliers to meet the demand by retailers is also
known to cause retailers to resort to sourcing for supplies from large/foreign suppliers.
Inability for local SME suppliers to adhere to requirements: Another issue faced by retailers
with SME suppliers is that some SMEs do not adhere to the minimum requirements set by large
retailers particularly with regards to quality and safety of products i.e. displaying expiry date for
their products, etc. There were cases where the local food suppliers unethically extended the
lifespan of their almost expired products by just replacing the old date with stickers displaying a
new expiry date, instead of disposing of/replacing the expiring products. This behaviour is
damaging retailers‟ reputation and affects the image of the retail brand.
Back margin/ trading terms: Interviews with distributors revealed that large retailers
(hypermarkets/supermarkets) tend to impose commercial conditions on distributors/suppliers.
Back-margins (other discounts/allowances, listing fees) are imposed on distributors/suppliers for
promoting and selling their products, affecting distributors‟ profit margins particularly SMEs.
These back-margins can range between 5 to 30% depending upon the product as well as the
retailer.
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Prevalent high logistics cost in Sabah, Sarawak, and rural areas: Industry players in rural
areas in Sabah and Sarawak as well as in Semenanjung face high logistics cost to transport
their products due to infrastructure issues. The retailers are forced to increase their selling price
and charging different pricing to these locations to make up for the high logistics cost. To
overcome this, under “Program Penyeragaman Harga Barang Keperluan Asas” by KPDNHEP, a
subsidy „Pengangkutan Barang Keperluan ke Luar Bandar‟ was introduced to logistics
companies. However, currently only seven products namely rice, sugar, flour, cooking oil, petrol,
diesel, and LPG are covered under this subsidy program. The prices of other basic necessities
are still subject to high logistics costs.
8.1.2 Regulatory Driven Issues
Lack of understanding of the Anti-Profiteering Act among retailers: Anti-profiteering Act is
surely a promising step towards protecting consumers‟ interests and regulating the retail industry
in the country. This act is however claimed to be unjust to retailers and the process involved in
controlling the Anti-Profiteering Act is too hassle and defeating its purpose to industry players.
Retailers expressed their disappointments that the Act will cripple their business operations
because their profit margins are being “monitored” and their prices are being “controlled” and
held below natural levels in time of high cost of doing business. Retailers also expressed their
dissatisfactions over the process involved during investigation and claimed the paperwork
process for each product under investigation is tedious and the time given to them to revert is too
short when the process required a lot of time and efforts from retailers to comply and retailers
find it troublesome especially when the complaints were invalid. Most retailers find that this Act is
unnecessary as it caused them to spend their resources unproductively. Retailers also claimed
that in the end, this Act will hurt the consumers as most retailers would hesitate to significantly
reduce their pricing, worrying that they would violate the act if they want to increase the price
later.
Frequent Review of Statutory Minimum Wage: Labour cost contributes more than 50% to the
cost of doing business for industry players. Any increase in the cost of doing business, when
cannot be mitigated by businesses, will be passed on to consumers. When the government
decided to frequently review the statutory minimum wage, the impact on the cost is mostly
apparent in smaller businesses. Large/foreign businesses would not feel the impact much as
they are already operating within the guideline, but the new ruling caused huge impact on small
and medium businesses and this problem is more prominent for small and medium businesses
in Sabah and Sarawak as they are already operating within thin margins due to logistics cost, etc.
Industry players gave feedback that the present economic situation is hardly the time to increase
the minimum wage. It is claimed that the impact of minimum wage increase will not be confined
to just RM100, instead, there will be knock-on effects where salaries of other employees will also
have to be adjusted to maintain the wage differentials between grades and seniority as well as
an increase of other benefits.
Logistics issues for products shipped from Semenanjung to Sabah/Sarawak: Retailers
from Semenanjung that have outlets in Sabah and Sarawak encountered restocking issues and
their outlets in those areas are consistently facing out-of-stocks issue due to local authority
delays in processing their suppliers‟ shipment from peninsular Malaysia. The local authorities in
Sabah and Sarawak required that these retailers to source their supplies from local suppliers first
before they can ship their supplies from Semenanjung Malaysia, as indicated in their licensing
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agreement. There are cases where the local authorities still make it difficult for the retailers to
restocks from Semenanjung, even though there are no such suppliers available in those states.
Limited awareness of MyCC and Competition Act 2010: Based on the responses from the
industry survey, most companies indicated that prevailing regulations do not affect their
businesses. However, when asked on their awareness level on Competition Act 2010, the
majority of the respondents, on the other hand, responded that they are not aware of the roles of
MyCC and also the Competition Act and its prohibitions.
Introduction of digital tax: With the introduction of digital tax from 1st January 2020 on any
digital service provided by a foreign-registered person (FRP) to any consumer in Malaysia can
lead to increase in prices of those products and services as the companies might transfer the
cost to the consumers.
Statutory reporting requirement for only foreign players: Currently only foreign players are
subject to periodic monitoring and reporting to KPDNHEP while the local players are only
required to get business licenses and adhere to PBT guidelines for setting up a business. As a
result, the conduct of local players does not come under any scrutiny unless and until any
complaints are made against them.
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8.2 Preliminary Recommendations
The proposed recommendations are aimed towards framing the subsequent course of action plans
for the WRT industry.
Table 32: Preliminary Proposed Initiatives
Preliminary Proposed Initiatives
1 Facilitating structural reforms that ensures efficiency and resiliency
1.1 Encourage strategic partnerships and cooperative mechanisms along the supply
chain to better optimize flow with the objective of reducing the cost of procuring and of
doing business. This may include facilitation programs between buyer and supplier, local
suppliers (including capacity building e.g. small suppliers to scale up), and between
retailers (e.g. joint sourcing).
Crucially there should also be clearer avenues and platforms for an industry feedback loop
to the relevant authorities for raising of business concerns such as inappropriate payment
terms, inability to enter certain market jurisdictions, and other contractual obligations
deemed unfair.
Stakeholders: MDTCA, MEDAC, SMECorp, PNS, SKM, PBT
1.2 Smaller markets and geographically less concentrated states such as in Sabah and
Sarawak, the Peninsular east coast, rural towns have higher prices of retail goods due in
part through the higher cost of doing business. This includes higher sourcing cost,
exposure to labour wage policies and logistics burdens.
There is a need to revisit the „local first‟ sourcing practise (balance with wider supplier
options), increase volumes (e.g. less SKUs) and create regular interactions with
government in order to identify and prioritise interventions needed (e.g. logistics facilitation,
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shared distribution centres, rural infrastructure improvements)
Stakeholders: State government, MDTCA, industry associations
1.3 Develop a comprehensive and structured plan for eCommerce within the WRT
industry to ensure sustainability and competitiveness amongst traditional players and
online players are balanced. The industry players (in particular retailers) have indicated that
eCommerce is potentially the most disruptive development but is unsure about strategies,
time to peak impact and how to compete. Through the existing National eCommerce
Strategic Roadmap under MITI (implemented through the National eCommerce Council
(NeCC) secretariat by MDEC), the government should consider necessary customization or
localization of eCommerce to the Malaysian way of doing business, and consumer
preferences. It should also safeguard businesses (e.g. level playing field) and consumers
(eg genuine quality product).
To support players by providing the necessary programs to equip the industry, especially
smaller retailers, to compete in this space. Examples include IT skills training programs,
eCommerce platform (local and foreign) matching for players and other capacity building
areas (e.g. payment gateways, purchase fulfilment).
Stakeholders: MDEC, MDTCA, SME Corp, MITI, MCMC, KKMM, MEDAC
2 Fostering a competitive environment towards industry best practices
2.1 Enhance awareness of the Competition Act 2010 and its Guidelines especially for
SMEs as many are still unaware of practises that are potentially non-compliant with the
Act. As the Act seeks to prohibit unfair trade practises, this may include practises that
exhibits superior bargaining power (e.g. back margin practises), unfair trading terms and
condition imposed (e.g. mandated display shelf allocation). The guidelines are deemed
important in particular to SMEs, to avoid accidental non-compliance with the Act but also as
a means for players to identify anti-competitive conduct around them.
Advocating the usage of the e-learning platform among the industry players
especially SMEs through ROS and industry association collaboration to strengthen
understanding of the Competition Act 2010.
Stakeholders: MyCC, MDTCA, SME Corp, ROS, industry associations
2.2 Rethink implementation of the Price Control and Anti-Profiteering Act 2011 to
balance the benefit to consumers and the viability of the industry over the longer
term given that it has been in force since January 2017. This Act should be seen together
with the Competition Act 2010 to decide which would be the most appropriate route that
would be effective in protecting the consumer at the same time for businesses to not be
overly encumbered.
Stakeholders: MDTCA, MyCC, industry associations
3 Establishing progressive policies and regulations with long term positive impact
3.1 Need to periodically update the rules, policies, and regulations governing WRT to
keep up with developments in the WRT sector. Currently, there are separate requirements
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that must be adhered to by foreign players that were originally put in place to level the
playing field for inherently smaller local players. This has since served its objective in
promoting strong local players that today represent the majority share of the market.
Conversely, effective rules such as those requiring foreign players to regularly report their
performances, and minimum local labour hires are absent in rules for local players. Policies
and regulations that are closer to being an equal level playing field with a clear
regulatory framework would promote a long term competitive environment that
businesses can plan for in their growth strategies. In parallel, updates should overtime
strive to reduce regulatory burden for WRT players.
Stakeholders: MyCC, MDTCA, SME Corp, PEMUDAH, state government
4 Enhancing industry -government platforms that promotes understanding and
collaboration
4.1 Revisit existing channels and avenues for government-industry interaction which are
currently in place, but may have redundancy and overlaps in purpose and limits of
authority. For the government, more collaboration is required in addressing cross-
jurisdiction issues. For industry, more awareness and clarity of these platforms is needed.
Done efficiently, two important purposes can be met: (1) for government to disseminate
information and updates related to the industry (e.g. Competition Act 2010, Anti-
Profiteering Act 2011); and (2) for industry players to raise issues, concerns, grievances.
It is also notable that in other international jurisdictions, industry association participation by
players is mandatory, so as to ensure a strong collective industry voice, and ease of
government to consult with industry when considering possible new policies and
regulations.
Stakeholders: MyCC, MDTCA, SME Corp, PEMUDAH, state government, industry
associations
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8.2.1 Mapping of the Preliminary Recommendation to Issues/Challenges
The proposed preliminary initiatives are recommended to address the issues and challenges
identified in this market review.
Shown below is the mapping of the preliminary recommendation to issues and challenges.
1. Facilitating structural reforms that ensures efficiency and resiliency
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2. Fostering a competitive environment towards industry best practices
3. Establishing progressive policies and regulations with long term positive impact
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4. Enhancing industry -government platforms that promotes understanding and collaboration
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9 APPENDICES
9.1 Findings from Industry Survey
9.1.1 Profile of Survey Participants
The industry survey was conducted with n=400 companies within the wholesale and retail industry
for the selected products covered in this study. It covered companies of different business nature,
geographical location, years of operation and size.
Figure 54: Business Nature of the Surveyed Companies
5% 8%
22%
77%
Distributor Manufacturer Wholesaler Retailer
(n=400)
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Figure 55: Product Offerings
Mini Market, 45%
Supermarket, 29%
Convenience Stores, 2%
Specialized Store - Personal care, 7%
Specialized Store - Pharmacy store (incl. chinese medical hall),
6%
Specialized Store - Clothing, 6%
Specialized Store - F&B, 5%
Type of Retailer (n=309)
70% 67% 66%
56%
24%
Food (processed) Household cleaningproducts
Beverages(processed)
Personal care andtoiletries
Clothing
(n=400)
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Figure 56: Location of Main Business Activities
Note:
Central region – Kuala Lumpur and Selangor
Northern region – Perlis, Kedah, Penang and Perak
Southern region – Johor, Melaka and Negeri Sembilan
Eastern region – Pahang, Terengganu, Kelantan
Figure 57: Years of Operating in Malaysia
35%
21%
16% 14%
7% 6%
Central Region Northern Region Southern Region Eastern Region Sarawak Sabah
<3 years, 2% 3-5years, 2%
6-10 years, 18%
11-15 years, 18%
16-20 years, 24%
>20 years, 36%
(n=400)
(n=400)
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Figure 58: Company’s Ownership and Public Listing status
Majority local, 99%
At least half
foreign, 1%
Company's Foreign Ownership Status
(n=400)
No, 92%
Yes, 6%
Don't know,
2%
Woman-owned Company
(n=400)
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Figure 59: Company’s Size
Note: Based on SME Corp’s definition, for the services sector, SMEs are defined as firms with sales turnover/revenue
not exceeding RM20 million OR number of full-time employees not exceeding 75. Although 8% (32) of the surveyed
companies have more than 75 full time employees, none of them exceeded the RM20 million mark to be classified as
a large company.
< RM300k
, 45%
RM300k < RM1
mil, 44%
RM1 mil < RM3 mil, 6%
RM3 mil < RM10 mil, 4%
RM10 mil -
RM20 mil, 1%
Revenue in 2018
(n=400)
< 5, 41%
5-29, 36%
30-75, 15%
> 75, 8%
Number of Full-time Employees in 2018
(n=400)
No, 100%
Public Listed on the Main Board
(n=400)
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9.1.2 Business Operations
9.1.2.1 Operating profit margin
The operating profit margin of the surveyed retailers are quite low as compared to that of the
surveyed distributors or wholesalers, with 67% of the retailers claimed that their profit margin in 2018
was 5% or lower, while more than 60% of the distributors and wholesalers earned more than 5%
profit margin. Companies that had higher profit margin are typically those that manufacture their own
products or are wholesaler and retailer at the same time.
By geographical location, majority of the industry players in the central region and southern region
reported a profit margin of 5% or less, while around half of them in northern region stated slightly
higher revenue of 6%-10%.
Figure 60: Operating Profit Margin in 2018 - Breakdown by Business Nature
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q7. Please indicate the operating profit margin of your company in Malaysia in 2018.)
60%
39%
36%
67%
33%
22%
43%
30%
6%
33%
16%
1%
2%
6%
3%
1%
2%
TOTAL
Distributor
Wholesaler
Retailer
≤ 5% 6%-10% 11%-15% 16%-20% > 20%
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Figure 61: Operating Profit Margin in 2018 - Breakdown by Location of main Business Activities
Central region n=142; Northern region n=84; Southern region n=66; Eastern region n=56; Sarawak n=30; Sabah
n=26
Figure 62: Operating Profit Margin in 2018 - Breakdown by Product Offering
Multiple Product Categories n=220; Only F&B n=70; Only Personal Care n=53; Only Clothing n=52
Note: The sample size of companies who only sell cleaning products is too small to be analyse separately (n=5)
70%
39%
79%
50%
50%
50%
22%
49%
20%
41%
43%
50%
6%
2%
9%
2%
3%
1%
4%
2%
3%
2%
Central Region
Northern Region
Southern Region
Eastern Region
Sarawak
Sabah
≤ 5% 6%-10% 11%-15% 16%-20% > 20%
73%
60%
38%
27%
25%
26%
49%
62%
1%
10%
11%
10%
1%
3%
2%
1%
2%
Multiple Product Categories
Only F&B
Only Personal Care
Only Clothing
≤ 5% 6%-10% 11%-15% 16%-20% > 20%
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9.1.2.2 Key operating cost components
Procurement of products contributed the highest cost for all industry players, followed by labour cost
and logistics. For the distributors, their logistics cost is higher than labour costs.
Figure 63: Top 5 Operating Cost Components
Key Cost Components Ranking (All) Ranking
(Distributor)
Ranking
(Wholesaler)
Ranking
(Retailer)
Procurement of products 1 1 1 1
Labour cost / Payroll 2 3 2 2
Rental/lease of office /stores
/warehouse
3 5 4 3
Logistics 4 2 3 5
Marketing 5 4 5 4
(Q9. What is your company’s top 5 input cost? Please rank 1 to 5, where 1 is the highest cost.)
9.1.2.3 Revenue breakdown by product category
Among those surveyed retailers who offer multiple product categories, on average food & beverages
contributed to more than 50% of their revenue, while household cleaning products made up more
than 20% and personal care product category is the third largest contributor.
Figure 64: Average Contribution of the Different Product Categories to Company’s Revenue
(Q13. Please indicate the contribution of the following product segment to your company’s revenue.)
Food & beverages
52% Household cleaning products
24%
Personal care
products 14%
Clothing 10%
Supermarket
Food & beverages
59%
Household cleaning products
22%
Personal care
products 19%
Mini Market
(n=89) (n=138)
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9.1.2.4 Distribution channel
More than 90% of the retailers surveyed felt that brick and mortar store is an important distribution
channel for them and they only sell their products in physical store.
The distributors surveyed are mostly selling their products through intermediaries or online, while the
wholesalers also sell their products in brick and mortar store on top of these two distribution
channels. The reason of selling products through intermediaries or online is mainly due to customer
demand.
Figure 65: Key Distribution Channel
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q15.Which distribution channels are important for your company? Could you please explain why do you
say so?)
84%
17%
49%
94%
17%
78%
53%
6% 10%
67%
43%
1%
TOTAL Distributor Wholesaler Retailer
Brick and mortar stores Selling through intermediaries Online
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9.1.2.5 Number of product suppliers
Within each product category, it is very common for the industry players to have more than 1 product
supplier. Less than 10% of the industry players reported to have only 1 supplier for processed food &
beverages and clothing products, and only around 15% of the industry players have 1 supplier for
personal care and household cleaning products. The median number of suppliers across all product
categories is between 3 to 7.
While similar trend is observed across the different geographical areas, larger industry players tend
to have higher number product suppliers.
Figure 66: Number of Product Suppliers
Min 1 1 1 1 1
Max 100 60 200 50 32
% with 1
supplier
6% 6% 13% 17% 8%
Processed Food n=278; Processed Beverages n=270; Personal Care Products n=269; Household Cleaning Products
n=223; Clothing n=97
(Q16.How many suppliers /distributor /wholesalers do you have for the following product categories?)
9.2
7.8
11.9
5.6
7.5
5.0 5.0
3.0 3.0
7.0
Processed Food ProcessedBeverages
Personal CareProducts
HouseholdCleaning Products
Clothing
Mean
Median
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9.1.2.6 Concerning areas in business
Sales is the most concerning areas in the industry across industry players of different business
nature, with more than 80% of the surveyed companies indicating it as a key concern. Among the
retailers, purchasing and inventory management are the other two key concerning areas. Besides
sales, majority of the distributors are worried about logistics/transportation, while majority of the
wholesalers are concern about purchasing and logistics/transportation.
Higher percentage of the surveyed companies in Sabah and Sarawak highlighted purchasing and
logistics/transportation as key concerning areas as compared to those in the central region.
Figure 67: Top 3 Most Concerning Areas in Business – Breakdown by Business Nature
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q17. Which are the top 3 most concerning areas in your business?)
92%
71%
58%
32%
15%
14%
7%
6%
89%
28%
22%
78%
33%
0%
28%
17%
84%
61%
32%
54%
15%
13%
24%
9%
94%
74%
65%
25%
14%
14%
2%
6%
Sales
Purchasing
Inventory Management
Logistics/Transportation
Packing / Repacking
Customer Service
Marketing
Warehousing
TOTAL
Distributor
Wholesaler
Retailer
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Figure 68: Top 3 Most Concerning Areas in Business – Breakdown by Geographical Location
Central region n=142; Northern region n=84; Southern region n=66; Eastern region n=56; Sarawak n=30; Sabah
n=26
94%
63%
64%
27%
22%
6%
9%
5%
93%
67%
54%
37%
13%
17%
5%
10%
89%
73%
67%
27%
23%
8%
5%
5%
88%
77%
50%
34%
7%
30%
5%
7%
92%
88%
38%
46%
8%
15%
12%
0%
83%
83%
50%
40%
3%
23%
7%
10%
Sales
Purchasing
Inventory Management
Logistics/Transportation
Packing / Repacking
Customer Service
Marketing
Warehousing
CentralRegionNorthernRegionSouthernRegionEasternRegionSabah
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9.1.2.7 Frequency of checking inventory
Around half of the surveyed industry players check their inventory for clothing items on a monthly
basis and 24% of them do that every 3-5 months. More than 30% of the surveyed companies
conduct inventory check for food & beverages, household cleaning products and personal care
products once a month, while the others perform it at a different frequency depending on sales
turnover.
Figure 69: Frequency of Checking Inventory
Food & Beverages n=289; Personal Care Products n=269; Household Cleaning Products n=223; Clothing n=97
(Q 20. How frequent does your company check inventory for the following product segments?)
4%
1%
1%
2%
15%
12%
10%
2%
4%
7%
6%
2%
35%
36%
38%
49%
17%
15%
16%
24%
16%
17%
17%
10%
10%
12%
11%
10%
Food & beverages
Household cleaning products
Personal care products
Clothing
Daily Weekly Bi-weekly Monthly
Once in 3-5 months Once in 6 months Once a year
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9.1.3 Pricing and Promotion
9.1.3.1 Frequency of price review
While price review is typically conducted on a quarterly basis among the distributors, most retailers
review their product prices monthly. For the wholesalers, 47% of them review product prices every
quarter and 45% do it monthly.
Companies that sell food & beverages only tend to differ among themselves in terms of price review
practice, whereas other companies typical perform price review on a monthly basis.
Figure 70: Frequency of price review – Breakdown by Business Nature
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q21. How often does your company review the price of the products?)
1%
1%
12%
11%
6%
14%
50%
6%
45%
52%
34%
72%
47%
29%
2%
6%
2%
1%
2%
6%
3%
TOTAL
Distributor
Wholesaler
Retailer
Weekly Bi-weekly Monthly Quarterly Yearly When product cost increased
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Figure 71: Frequency of price review – Breakdown by Product Offering
Multiple Product Categories n=220; Only F&B n=70; Only Personal Care n=53; Only Clothing n=52
Note: The sample size of companies who only sell cleaning products is too small to be analyse separately (n=5)
1%
1%
11%
23%
4%
6%
52%
39%
51%
62%
33%
31%
43%
29%
1%
2%
4%
3%
4%
Multiple Product Categories
Only F&B
Only Personal Care
Only Clothing
Weekly Bi-weekly Monthly Quarterly Yearly When product cost increased
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9.1.3.2 Factors influencing product pricing
The key factors that influence product pricing are market demand, competitor‟s pricing and cost of
purchase. Logistics costs also play an important role in the product pricing for distributors and
wholesalers.
Figure 72: Factors Influencing Product Pricing
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q22. What are the factors that influence your company’s decision on product pricing?)
78%
73%
69%
28%
22%
18%
5%
3%
61%
50%
89%
89%
6%
6%
6%
6%
80%
67%
66%
57%
3%
20%
3%
2%
78%
75%
70%
19%
27%
17%
6%
3%
Market demand
Competitor‟s pricing
Cost of purchase from manufactures/suppliers/ distributors/ wholesalers
Logistics cost
Competition intensity in the area
Perceived value of the product
Nature of products (e.g. FMCG versusslow moving)
Warehouse/ storage cost
TOTAL
Distributor
Wholesaler
Retailer
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Majority of the surveyed companies indicated that their suppliers do not influence or control the
selling price of the products bought from them. For those that feel their suppliers have an influence,
most of them decide their pricing based suppliers‟ pricing, i.e. if the supplier increases the selling
price, they would increase their selling price too. Similar trend is observed across different
geographical region and industry players that have different business nature as well as product
offerings.
Figure 73: Supplier’s Influence on Product Pricing
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q23a. Do your company’s suppliers influence or control the selling price of your products bought from
them?)
21%
33%
25%
20%
79%
67%
75%
80%
TOTAL
Distributor
Wholesaler
Retailer
Yes No
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9.1.3.3 Product Pricing Practices
Currently, more than 90% of the surveyed companies do not have a systematic mechanism to
monitor and set product prices, regardless of their business nature, geographical location and types
of products sold.
Figure 74: Availability of a Systematic Mechanism to Monitor and Set the Prices of Products Sold
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q24. Does your company use any systematic mechanism to monitor and set prices of the products
sold?)
Almost all the surveyed companies claimed that the pricing of their products the same across all
their shops / for all their clients. Only one of the surveyed distributors stated otherwise, where the
price difference would be between 6-10%, depending on its client‟s volume, potential sales and
business nature.
4%
6%
9%
2%
96%
94%
91%
98%
TOTAL
Distributor
Wholesaler
Retailer
Yes No
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Figure 75: Price consistency across different shops or for different clients
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q25a. Is the pricing of your products the same across all your shops / for all your clients?)
For those surveyed companies who also sell their products online, almost all of them stated that the
price of their products is similar whether online or in-store.
Figure 76: Price consistency between online and in-store
(Q26a. Does the price of your products vary between online and in-store?)
6%
100%
94%
100%
100%
TOTAL
Distributor
Wholesaler
Retailer
Is the pricing of your products the same across all your shops / for all your clients?)
No Yes
Yes, 2%
No, 98%
(n=48)
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It is very uncommon among the surveyed companies to sell any product below cost price. Only 5
companies (1%) have done this before, mainly to boost sales and to clear old / near expiring stock.
Figure 77: Practice of Products below Cost Price
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q27a. Have your company sold any product below cost price before?)
9.1.3.4 Price volatility and frequency of price changes
Generally, the surveyed industry players feel that price volatility of the selected products is low (i.e.
the magnitude of price difference is low), except for essential food items which 41% of the industry
players rated it as moderate and 22% rated it as high or very high. 70% of these companies claimed
that the price difference for essential food items is 6-10% and 15% said the price difference is 11-
15%.
1%
6%
2%
1%
99%
94%
98%
99%
TOTAL
Distributor
Wholesaler
Retailer
Yes No
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Figure 78: Rating of Price Volatility by Product Segment - Food & Beverages
n= 254-260
(Q28a. Please rate the price volatility of the following product categories:)
5%
26%
31%
33%
34%
35%
34%
34%
33%
33%
37%
31%
36%
36%
36%
37%
36%
36%
39%
39%
34%
36%
41%
37%
31%
28%
25%
26%
25%
24%
25%
28%
24%
20%
2%
3%
3%
3%
3%
5%
3%
3%
4%
3%
2% Essential food items
Frozen food
Noodles, pasta
Canned food
Baked goods
Snacks
Dairy products
Cold beverages
Confectionary
Hot beverages
Condiment
Very low (1) Low (2) Moderate (3) High (4) Very high (5)
Mean
2.83
2.15
2.05
2.01
1.98
1.96
2.02
1.96
1.98
2.04
1.93
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Figure 79: Rating of Price Volatility by Product Segment - Household Cleaning Products
n= 217-220
(Q28a. Please rate the price volatility of the following product categories:)
30%
31%
30%
32%
32%
33%
31%
31%
31%
31%
41%
40%
42%
39%
40%
38%
41%
42%
41%
41%
28%
28%
26%
28%
28%
28%
27%
26%
27%
27%
1%
1%
1%
1%
1%
1%
Laundry cleaningdetergent
Dish detergent
Multipurpose cleaner
Floor cleaner
Kitchen cleaner
Toilet/bathroom cleaner
Mop and broom
Garbage bag
Disinfectants anddisinfectant cleaners
Glass and multi-surfaceCleaners
Very low (1) Low (2) Moderate (3) High (4) Very high (5)
Mean
2.01
2.00
2.00
1.98
1.98
1.96
1.96
1.99
1.99
1.99
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Figure 80: Rating of Price Volatility by Product Segment - Personal Care Products
n= 220-229
(Q28a. Please rate the price volatility of the following product categories:)
37%
37%
38%
36%
35%
35%
34%
34%
35%
33%
33%
35%
35%
38%
37%
37%
38%
38%
36%
38%
28%
26%
26%
25%
26%
27%
26%
27%
28%
28%
2%
2%
2%
1%
1%
1%
1%
Body Soap / Shower Gel
Hand wash
Tooth paste
Tooth brush
Mouthwash
Hair Shampoo
Hair Conditioner
Deodorant
Facial wash
Lotion/Moisturiser
Very low (1) Low (2) Moderate (3) High (4) Very high (5)
Mean
1.96
1.94
1.93
1.91
1.93
1.96
1.95
1.97
1.96
1.97
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Figure 81: Rating of Price Volatility by Product Segment – Clothing
n= 85-96
(Q28a. Please rate the price volatility of the following product categories:)
27%
28%
31%
39%
51%
47%
33%
39%
31%
33%
31%
30%
66%
63%
56%
49%
38%
42%
53%
50%
57%
54%
57%
61%
8%
9%
12%
11%
11%
10%
14%
10%
12%
12%
11%
9%
1%
1%
1%
1%
1%
1%
Men innerwear
Men daily clothes
Men business attire
Men sportswear
Women innerwear
Women daily clothes
Women business attire
Women sportswear
Children innerwear
Children daily clothes
Children school uniform
Children sportswear
Very low (1) Low (2) Moderate (3) High (4) Very high (5)
Mean
1.81
1.81
1.84
1.73
1.60
1.66
1.81
1.72
1.81
1.81
1.82
1.79
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In terms of the frequency of adjusting selling price for food and beverages products, around 30% of
the surveyed companies change their selling price for essential food items and frozen food every 6
months, while around 35% of them amend selling price of other food and beverages products at the
same time interval. A quarter of the companies adjust the selling price of the food and beverage
products on a yearly basis.
Figure 82: Frequency of Changing Selling Price - Food and Beverages
n= 254-260
(Q29. How frequent does your selling price of the following product categories change?)
9%
10%
10%
11%
10%
10%
10%
10%
9%
9%
10%
1%
2%
2%
2%
2%
3%
2%
2%
2%
2%
2%
15%
9%
7%
8%
8%
9%
8%
8%
8%
8%
8%
24%
24%
22%
22%
20%
17%
19%
19%
19%
22%
20%
27%
31%
35%
35%
36%
37%
35%
35%
37%
33%
34%
24%
24%
24%
24%
24%
25%
25%
26%
26%
24%
26%
Essential food items
Frozen Food
Noodles, pasta
Canned food
Baked goods
Snacks
Dairy products
Cold beverages
Confectionary
Hot Beverages
Condiment
Weekly Bi-weekly Monthly Once in 3-5 months Once in 6 months Once a year
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For all cleaning products, around 35% of the industry players change their selling price every 6
months, while 25% of them implement price change once a year.
Figure 83: Frequency of Changing Selling Price - Household Cleaning Products
n= 217-220
(Q29. How frequent does your selling price of the following product categories change?)
8%
8%
9%
9%
9%
9%
9%
9%
9%
9%
4%
4%
3%
3%
3%
3%
3%
3%
3%
3%
9%
8%
8%
8%
8%
9%
8%
8%
8%
8%
22%
21%
21%
20%
19%
19%
19%
20%
20%
18%
33%
34%
33%
35%
36%
35%
36%
34%
35%
37%
25%
26%
26%
25%
25%
25%
25%
25%
25%
25%
Laundry cleaning detergent
Dish detergent
Multipurpose cleaner
Floor cleaner
Kitchen cleaner
Toilet/bathroom cleaner
Mop and broom
Garbage bag
Disinfectants &disinfectant cleaners
Glass and multi-surface Cleaners
Weekly Bi-weekly Monthly Once in 3-5 months Once in 6 months Once a year
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The frequency of changing selling price across all types of personal care products is similar to that of
household cleaning products.
Figure 84: Frequency of Changing Selling Price - Personal Care Products
n= 220-229
(Q29. How frequent does your selling price of the following product categories change?)
8%
8%
8%
8%
8%
8%
8%
8%
8%
8%
3%
3%
3%
3%
3%
3%
4%
3%
4%
4%
8%
8%
8%
8%
8%
8%
8%
8%
8%
8%
20%
20%
19%
18%
19%
21%
19%
21%
21%
21%
35%
34%
33%
35%
34%
34%
35%
33%
34%
34%
26%
27%
28%
28%
28%
26%
27%
26%
25%
26%
Body Soap/ Shower gel
Hand wash
Tooth paste
Tooth brush
Mouthwash
Hair Shampoo
Hair Conditioner
Deodorant
Facial wash
Lotion/Moisturiser
Weekly Bi-weekly Monthly Once in 3-5 months Once in 6 months Once a year
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For clothing, the changes in selling price typically occur once a year across all different types of
clothing items.
Figure 85: Frequency of Changing Selling Price - Clothing
n= 85-96
(Q29. How frequent does your selling price of the following product categories change?)
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
4%
4%
6%
4%
4%
4%
5%
5%
4%
4%
4%
4%
6%
8%
7%
7%
7%
8%
9%
6%
6%
6%
7%
6%
24%
21%
19%
19%
19%
22%
22%
22%
21%
23%
22%
21%
20%
23%
29%
24%
24%
21%
24%
21%
22%
23%
22%
22%
43%
42%
36%
43%
44%
43%
38%
43%
44%
42%
43%
44%
Men innerwear
Men daily clothes
Men business attire
Men sportswear
Women innerwear
Women daily clothes
Women business attire
Women sportswear
Children innerwear
Children daily clothes
Children school uniform
Children sportswear
Weekly Bi-weekly Monthly Once in 3-5 months Once in 6 months Once a year
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9.1.3.5 Discounts/Promotions
30% of the industry players reported that they offer regular discounts or promotions and such
promotions usually take place during festive seasons, e.g. Hari Raya, Chinese New year, Deepavali,
Christmas, etc.
Figure 86: Discounts or Promotions
Yes 30%
No 70%
Do you offer regular discounts or promotions?
2%
4%
4%
7%
10%
11%
14%
22%
25%
81%
Every Weekend
Weekly
Once a year
School Holidays
Quarterly
Once in 6 months
Megasale Carnival
Public Holidays
Monthly
Festive Seasons
Discount/ Promotion Period
(n=400) (n=118)
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9.1.4 Level of Competition and Experience/Observation of Potential Anti-
Competitive Practices
9.1.4.1 Key client/customer attractions
Across all industry players of different business nature, the surveyed companies perceived that price
is top criteria that attracted their clients/customers to buy from them, followed by convenience. For
retailers, proximity to customers is the third key attraction, whereas availability of promotion/discount
play a more important role than proximity for the distributors and wholesalers.
Figure 87: Top 5 Client/customer Attractions
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q31. In your opinion, what are your customers’ top 5 key considerations to buy from your store /
company?)
96%
82%
74%
52%
24%
16%
15%
13%
2%
100%
67%
56%
61%
50%
33%
6%
22%
100%
72%
56%
75%
41%
11%
11%
25%
95%
85%
79%
45%
18%
17%
17%
9%
2%
Price
Convenience
Proximity
Promotion/ discount
Online presence
Customer service
Availability of credit
Product delivery
Loyalty card/ points
TOTAL
Distributor
Wholesaler
Retailer
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9.1.4.2 Perception of the wholesale and retail trade industry
Around 80% of the surveyed companies agreed/strongly agreed with the following statements:
Figure 88: Perception of the Wholesale and Retail Trade Industry in Malaysia
n= 400
(Q38. How much do you agree with the following statements on the distributive trade industry in
Malaysia?)
15%
23%
14%
15%
15%
17%
17%
19%
52%
33%
46%
53%
55%
46%
60%
62%
34%
44%
41%
32%
30%
37%
23%
19%
There are too many playersin the market
Price war competition exists
The increasing cost ofbusiness is deterioratingoperating profit margin
The increasing cost ofbusiness is further pass on
to consumers
Large players aredominating and influence
the market
Suppliers are having higherbargaining power than
buyers
Many stores are closingdown in the past three years
It is difficult for new playersto enter the market
Strongly Disagree (1) Disagree (2) Neutral (3) Agree (4) Strongly Agree (5)
Mean
4.19
4.22
4.27
4.16
4.16
4.21
4.06
4.06
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9.1.4.3 Observation and Perception of Potential Anti-Competitive Practices
Based on the survey conducted with 400 industry players within the wholesale and retail trade
industry, there is no potential anti-competitive practice observed in terms of exclusive distribution
agreement, price parity clause, unfair conditions in contract, controlling or limiting sales of goods and
tying to a single supplier.
Figure 89: Existence of Potential Anti-Competitive Practices
No 100%
Exclusive Distribution Agreement
No 100%
Price Parity Clauses
No 100%
Clause(s) in the Contract that are Detrimental to Business
No 100%
Unfair Conditions Imposed on the Quantity of Products that can be
Purchased
(n=400) (n=400)
(n=400) (n=400)
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(Q32a. Do you have any exclusive distribution agreement with any of your supplier/wholesaler?)
(Q33a. Is your company subject to any price parity clauses? (i.e. obliged to sell your products at a given
price or to sell to a customer at a price no higher and/or at terms no less agreeable than offered to other
customers.)
(Q34a. Are there any clauses in the contract detrimental to your business?)
(Q35. Are there any unfair conditions imposed on the quantity of products that can be purchased?)
(Q36. Have you observed any practices of controlling or limiting sales of goods in the market?)
(Q37a. Is your company tied to a single supplier for any of the products sold?)
(Q41a. Have you ever experienced any manufacturer/ distributor/ retailer/ wholesaler that impose
different terms and condition for the same transaction?)
However, majority of the surveyed companies agreed/strongly agreed with the following statements
on anti-competitive practices in the Malaysian distributive trade industry:
Yes 1%
No 99%
Observed any practices of controlling or limiting sales of goods
in the market
No 100%
Tied to a single supplier for any of the products sold
No 100%
Manufacturer/ distributor/ retailer/ wholesaler impose different terms & condition for the same transaction
(n=400) (n=400)
(n=400)
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Figure 90: Perception of anti-competitive practices in Malaysian wholesale and retail trade industry
n=400
(Q40. How much do you agree with the following statements on anti-competitive practices in the Malaysian distributive trade industry?)
1%
20%
37%
25%
28%
29%
29%
29%
32%
35%
60%
39%
47%
52%
48%
49%
53%
52%
50%
21%
25%
28%
20%
24%
23%
19%
16%
15%
Some group of businesses “fix” their product prices and dissuades others to compete.
Some competitors agree to divide or allocate customers, suppliersor territories among themselves rather than allowing competitive
market forces to work
Some parties collude to choose the winner of a bidding processwhile others submit uncompetitive bids
Some companies provide a product or service on the condition thatthe customers purchase some other products or services
Some retailers/ distributors/ wholesalers are 'tied' to purchase froma supplier on the understanding that no other distributor will be
appointed or receive supplies in a given area.
There is an agreement between competing companies, or betweena company and an individual or business, that stipulates that they
refuse to do business with another
There is an agreement between a manufacturer and a wholesaler/distributor/ retailer not to sell a product below a specified price.
Some companies sell the same product at different prices todifferent buyers, in order to maximize sales and profits.
Some companies are pricing their goods/services at such a lowlevel that other firms cannot compete and are forced to leave the
market.
Strongly Disagree (1) Disagree (2) Neutral (3) Agree (4) Strongly Agree (5)
Mean Score
4.01
3.88
4.03
3.93
3.94
3.90
3.84
3.80
3.95
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9.1.5 Industry Trends
Generally, majority of the surveyed companies are positive with the industry growth in the next 3
years, with 84% of the distributors, 74% of the wholesalers and 62% of the retailers expected the
market to grow in the near future. Most of them believe that the growth will be within 10%.
Larger companies (in terms of employment size) tend to be more positive about the future of the
industry.
Figure 91: Expectation of industry growth in the next 3 years – Breakdown by Business Nature
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q42. How do you see the growth of the wholesale and retail industry in the next 3 years?)
Figure 92: Expectation of industry growth in the next 3 years – Breakdown by Employment Size
12%
6%
10%
12%
6%
6%
3%
7%
11%
6%
12%
6%
6%
7%
6%
26%
39%
26%
25%
23%
33%
36%
20%
16%
12%
12%
17%
TOTAL
Distributor
Wholesaler
Retailer
Shrink by >10% Shrink by 6-10% Shrink by 1-5% Stagnant (0%)
Grow by 1-5% Grow by 6-10% Grow by >10%
19%
8%
8%
7%
6%
10%
13%
12%
2%
10%
3%
6%
10%
17%
25%
29%
20%
24%
18%
26%
32%
21%
16%
13%
17%
27%
Micro (<5 FTE)
Small (5-29 FTE)
Medium (30-75 FTE)
Large (>75 FTE)
Shrink by >10% Shrink by 6-10% Shrink by 1-5% Stagnant (0%)
Grow by 1-5% Grow by 6-10% Grow by >10%
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FTE = Full-time employee
Micro n=167; Small n=145; Medium n=59; Large n=29
Nevertheless, only a small fraction of the surveyed companies have a plan to expand/ open new
stores/ distribution centres/ warehouses within the next 3 years.
Figure 93: Plan to expand/ open new stores/ distribution centres/ warehouses within the next 3 years
Total n=400; Distributor n=18; Wholesaler n=87; Retailer n=309
(Q45. Does your company plan to expand/ open new stores/ distribution centres/ warehouses within the
next 3 years?)
Industry players believe that there will be an increasing market demand for wholesale and retail
services online. Besides, the economy is growing and this will lead to higher market/product
demand. They also perceived that increasingly more foreign players will enter the Malaysian
wholesale and retail market and this will stimulate the growth of the industry. Nonetheless, with more
players entering the market and the opening of more stores, competition is going to be stiffer.
97%
78%
92%
99%
3%
22%
8%
1%
TOTAL
Distributor
Wholesaler
Retailer
No Yes
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Figure 94: Key Industry Trends
(Q43. Could you highlight the key industry trends which are changing the dynamics in your market?)
9.1.6 Awareness of MyCC
The surveyed industry players are neither aware of MyCC nor the competition law.
Figure 95: Awareness of MyCC and Competition Law
(Q32a. Are you familiar with Malaysia Competition Commission (MyCC) and its roles in Malaysia before
this survey?)
(Q47. Are you familiar with the competition law and its prohibition?)
No 100%
Awareness of MyCC
No 100%
Awareness of Competition Law
1
2.
3.
4.
(n=400) (n=400)
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All of them are satisfied with the existing rules, regulations and laws and did not feel that there is any
regulation in Malaysia that affects their business.
Figure 96: Perception of the existing rules, regulations and laws
No 100%
Is there any prevailing regulation in Malaysia that affects your business?
Yes 100%
Do you think that the existing rules, regulations and laws are sufficient to address anti-competitive practices in
your industry?
(n=400) (n=400)
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9.2 Findings from Consumer Survey
9.2.1 Profile of Survey Participants
A survey was conducted with n=400 consumers of different demographics across different parts of
Malaysia. These survey participants have purchased processed food, processed beverages,
household cleaning products, personal care & toiletries and/ or clothing items within the past 12
months.
Figure 97: Profile of Survey Participants
Central, 30%
Northern, 23%
Southern, 19%
Eastern, 13%
Sarawak, 9%
Sabah, 6%
Geographical Region
(n=400)
Urban, 75%
Rural, 25%
Geographical Type
18-29 y.o., 21%
30-39 y.o., 23% 40-49
y.o., 22%
50-59 y.o., 19%
≥ 60 y.o., 15%
Age
Male, 48%
Female, 52%
Gender
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Note:
Monthly Household Income (MHI) range based on Household Income and Basic Amenities Survey
Report 2016:
B40: < RM4,360
M40: RM4,360 - RM9,619
T20: ≥ RM9,620
9.2.2 Consumer Purchasing Behaviour
9.2.2.1 Food & Beverages
Within the food and beverages category, essential food items such as rice, sugar, flour and oil are
the most frequently purchased products among the consumers. This is followed by baked goods
(biscuits, cakes, breads and other bakery products) and hot beverages (coffee, tea, cocoa). The
same trend is observed across the different household income group. Consumers in the eastern
region consume more dairy products and condiments (spices and sauces) as compared to other
regions, whereas those in Sarawak also frequently purchase noodles/pasta and canned food, and
those in Sabah frequently consume snacks and frozen food on top of essential food items, baked
goods and hot beverages.
Malay, 63%
Chinese, 25%
Indian, 9%
Others, 3%
Race
≤ 4,000, 40%
4,001 - 10,000,
40%
>10,000, 20%
Monthly Household Income (RM)
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Figure 98: Top 5 Most Frequently Purchased / Consumed Food & Beverages
(Q1. What are the top 5 items for each product category (food & beverages, cleaning products, personal
care & toiletries and clothing) that you have purchased frequently and mostly consumed?)
Top 5 Most Frequently Purchased / Consumed Food & Beverages Items
- Breakdown by Geographical Region
Central
(n=120)
Northern
(n=94)
Southern
(n=75)
Eastern
(n=52)
Sarawak
(n=34)
Sabah
(n=25)
1. Essential food
items (89%)
1. Essential food
items (83%)
1. Essential food
items (91%)
1. Essential food
items (90%)
1. Essential food
items (94%)
1. Baked goods
(84%)
2. Baked goods
(78%)
2. Baked goods
(81%)
2. Baked goods
(76%)
2. Dairy products
(73%)
2. Baked goods
(85%)
2. Essential food
items (72%)
3. Hot beverages
(72%)
3. Cold
beverages (53%)
3. Hot beverages
(60%)
3. Baked goods
(69%)
3. Hot beverages
(65%)
3. Snacks (72%)
4. Cold
beverages (55%)
4. Hot beverages
(50%)
4. Cold
beverages (45%)
4. Hot beverages
(54%)
4. Noodle/ pasta
(44%)
4. Frozen food
(60%)
5. Dairy products
(36%)
5. Dairy products
(46%)
5. Dairy products
(41%)
5. Condiment
(50%)
5. Canned food
(41%)
5. Hot beverages
(56%)
88%
86%
89%
89%
78%
78%
77%
81%
61%
59%
62%
61%
48%
43%
52%
48%
43%
38%
47%
45%
TOTAL
MHI ≤ RM4,000
MHI RM4,001 - RM10,000
MHI > RM10,000
Top 5 Most Frequently Purchased / Consumed Food & Beverages Items - Breakdown by Monthly Household Income (MHI)
Essential food items (rice,sugar, flour, oil)
Baked goods (biscuits, cakes,breads and other bakeryproducts)
Hot beverages (coffee, tea,cocoa and other beverages)
Cold beverages (juices,cordial drinks)
Dairy products
(n=160)
(n=160)
(n=80)
(n=400)
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Thirty five per cent of Malaysians spend between RM101-RM300 and 32% spend between RM301-
RM500 on purchasing food and beverages products on a monthly basis. The expenditure on food
and beverages increase with household income, with majority of the low income households (MHI ≤
RM4,000) spent not more than RM300 while around 50% of the high income households (MHI
>RM10,000)spend more than RM500 monthly on food and beverages.
Figure 99: Monthly Expenditure on Food & Beverages
(Q2. Based on your experience and estimation, how much do you spend on the selected items on
monthly basis?)
Consumers typically purchase essential food items and hot beverages once a month, whereas for
baked goods and dairy products on a weekly basis. The frequency of cold beverages purchase
varies from one consumer to another, with some of them purchase on a weekly basis, while others
on a bi-weekly or monthly basis.
1%
1%
1%
3%
4%
3%
8%
14%
5%
3%
35%
44%
34%
19%
32%
29%
36%
30%
21%
8%
21%
49%
TOTAL
MHI ≤ RM4,000
MHI RM4,001 - RM10,000
MHI > RM10,000
Monthly Expenditure on Food & Beverages
≤ RM25 RM26 - RM50 RM51 - RM100
RM101 - RM300 RM301 - RM500 > RM500
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Figure 100: Frequency of Product Purchase - Food & Beverages
(Q3. How frequent do you buy the selected items?)
9.2.2.2 Household Cleaning Products
Laundry cleaning detergent is the top consumption product within the household cleaning product
category for the Malaysians. Besides that, consumers also frequently purchase dish detergent,
toilet/bathroom cleaner, floor cleaner and kitchen cleaner.
3%
47%
18%
35%
45%
32%
33%
12%
29%
26%
61%
18%
64%
32%
23%
3%
3%
5%
4%
5%
Essential food items
Baked goods
Hot beverages
Cold beverages
Dairy products
Frequency of Product Purchase - Food & Beverages
Weekly Bi-weekly Monthly Once in 3-5 months
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Figure 101: Top 5 Most Frequently Purchased / Consumed Household Cleaning Products - Breakdown by Monthly Household Income (MHI)
(Q1. What are the top 5 items for each product category (food & beverages, cleaning products, personal
care & toiletries and clothing) that you have purchased frequently and mostly consumed?)
Top 5 Most Frequently Purchased / Consumed Household Cleaning Products
- Breakdown by Geographical Region
Central
(n=120)
Northern
(n=94)
Southern
(n=75)
Eastern
(n=52)
Sarawak
(n=34)
Sabah
(n=25)
1. Laundry
cleaning
detergent (97%)
1. Laundry
cleaning
detergent (91%)
1. Laundry
cleaning
detergent (89%)
1. Laundry
cleaning
detergent (94%)
1. Laundry
cleaning
detergent (97%)
1. Laundry
cleaning
detergent (84%)
2. Dish detergent
(78%)
2. Toilet/
bathroom
cleaner (66%)
2. Toilet/
bathroom
cleaner (60%)
2. Toilet/
bathroom
cleaner (67%)
2. Dish detergent
(74%)
2. Dish detergent
(76%)
3. Floor cleaner
(67%)
3. Dish detergent
(61%)
3. Floor cleaner
(65%)
2. Kitchen
cleaner (67%)
3. Kitchen
cleaner (65%)
3. Toilet/
bathroom
cleaner (36%)
4. Toilet/
bathroom
cleaner (65%)
4. Floor cleaner
(59%)
4. Dish detergent
(57%)
4. Floor cleaner
(54%)
4. Toilet/
bathroom
cleaner (56%)
4. Multipurpose
cleaner (32%)
93%
91%
95%
93%
67%
66%
64%
76%
62%
53%
66%
73%
60%
51%
65%
69%
48%
43%
53%
49%
TOTAL
MHI ≤ RM4,000
MHI RM4,001 - RM10,000
MHI > RM10,000
Top 5 Most Frequently Purchased / Consumed Household Cleaning Products - Breakdown by Monthly Household Income (MHI)
Laundry cleaningdetergent
Dish detergent
Toilet/bathroom cleaner
Floor cleaner
Kitchen cleaner
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5. Kitchen
cleaner (43%)
5. Kitchen
cleaner (41%)
5. Kitchen
cleaner (53%)
5. Dish detergent
(60%)
5. Floor cleaner
(53%),
5. Floor cleaner,
Kitchen cleaner
(20%)
Around half of the consumers surveyed spend not more than RM50 monthly on household cleaning
products. Majority of the high income households spend up to RM100 on household cleaning
products on a monthly basis.
Figure 102: Monthly Expenditure on Household Cleaning Products
(Q2. Based on your experience and estimation, how much do you spend on the selected items on
monthly basis?)
Malaysians generally buy the required household cleaning products once a month, regardless of
household income level, geographical location, race and age.
22%
34%
18%
4%
31%
33%
32%
25%
35%
28%
36%
49%
12%
5%
14%
23%
TOTAL
MHI ≤ RM4,000
MHI RM4,001 - RM10,000
MHI > RM10,000
Monthly Expenditure on Household Cleaning Products
≤ RM25 RM26 - RM50 RM51 - RM100 RM101 - RM300
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Figure 103: Frequency of Product Purchase - Household Cleaning Products
(Q3. How frequent do you buy the selected items?)
9.2.2.3 Personal Care & Toiletries
Tooth paste, body soap/shower gel and hair shampoo are the top 3 consumer products within the
personal care & toiletries category, regardless of household income and geographical location.
Around 50% of the consumers surveyed also purchase facial wash frequently. The consumption of
mouthwash is more prominent among the high income earners and around one-third of the
consumers in the central and southern region use deodorant frequently.
7%
5%
13%
8%
3%
75%
68%
60%
67%
77%
18%
26%
22%
23%
18%
1%
4%
2%
2%
Laundry cleaning detergent
Dish detergent
Toilet/bathroom cleaner
Floor cleaner
Kitchen cleaner
Frequency of Product Purchase - Household Cleaning Products
Bi-weekly Monthly Once in 3-5 months Once in 6 months
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Figure 104: Top 5 Most Frequently Purchased / Consumed Personal Care & Toiletries- Breakdown by Monthly Household Income (MHI)
(Q1. What are the top 5 items for each product category (food & beverages, cleaning products, personal
care & toiletries and clothing) that you have purchased frequently and mostly consumed?)
Top 5 Most Frequently Purchased / Consumed Personal Care & Toiletries
- Breakdown by Geographical Region
Central
(n=120)
Northern
(n=94)
Southern
(n=75)
Eastern
(n=52)
Sarawak
(n=34)
Sabah
(n=25)
1. Body Soap/
Shower Gel
(96%)
1. Tooth paste
(96%)
1. Tooth paste
(92%)
1. Tooth paste
(98%)
1. Tooth paste
(97%)
1. Body Soap/
Shower Gel
(88%)
2. Tooth paste
(90%)
2. Body Soap/
Shower Gel
(94%)
2. Body Soap/
Shower Gel
(87%)
2. Body Soap/
Shower Gel
(88%)
2. Body Soap/
Shower Gel
(91%)
2. Tooth paste
(80%)
3. Hair Shampoo
(78%)
3. Hair Shampoo
(88%)
3. Hair Shampoo
(83%)
2. Hair Shampoo
(88%)
3. Hair Shampoo
(85%)
3. Hair Shampoo
(76%)
4. Facial wash
(58%)
4. Facial wash
(49%)
4. Facial wash
(56%)
4. Facial wash
(58%)
4. Tooth brush
(62%)
4. Tooth brush
(48%)
5. Deodorant
(33%)
5. Tooth brush
(32%)
5. Deodorant
(35%)
5. Tooth brush
(27%)
5. Facial wash
(56%)
5. Hair
conditioner
(40%)
93%
96%
89%
94%
92%
91%
93%
93%
80%
81%
85%
85%
54%
47%
61%
55%
29%
34%
28%
23%
24%
19%
22%
36%
TOTAL
MHI ≤ RM4,000
MHI RM4,001 - RM10,000
MHI > RM10,000
Top 5 Most Frequently Purchased / Consumed Personal Care & Toiletries - Breakdown by Monthly Household Income (MHI)
Tooth paste
Body Soap/ ShowerGelHair Shampoo
Facial wash
Tooth brush
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Malaysians have higher expenditure on personal care toiletries as compared to household cleaning
products. Around 60% of the households spend more than RM50 monthly on personal care items.
58% of the low income households spend not more than RM50 on personal care & toiletries on a
monthly basis, while more than 60% of medium income households and more than 70% of high
income households‟ fork out more than RM50 for such products.
Figure 105: Monthly Expenditure on Personal Care & Toiletries
(Q2. Based on your experience and estimation, how much do you spend on the selected items on
monthly basis?)
Most of the key personal care & toiletries are purchased once a month, except for toothbrush which
is changed every 3-5 months.
19%
32%
14%
1%
24%
26%
23%
23%
37%
33%
38%
41%
18%
8%
23%
25%
3%
1%
3%
8%
1%
3%
TOTAL
MHI ≤ RM4,000
MHI RM4,001 - RM10,000
MHI > RM10,000
Monthly Expenditure on Personal Care & Toiletries
≤ RM25 RM26 - RM50 RM51 - RM100
RM101 - RM300 RM301 - RM500 > RM500
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Figure 106: Frequency of Product Purchase - Personal Care & Toiletries
(Q3. How frequent do you buy the selected items?)
9.2.2.4 Clothing
Within clothing product category, women and men daily clothes are the top most frequently
purchased items, followed by children daily clothes. Households with high monthly income tend to
purchase men business attire and men innerwear more frequently than those with lower monthly
income.
2%
4%
1%
1%
1%
33%
75%
74%
66%
72%
37%
49%
22%
22%
32%
25%
53%
18%
1%
1%
1%
7%
Tooth paste
Body Soap/ Shower Gel
Hair Shampoo
Facial wash
Tooth brush
Mouthwash
Frequency of Product Purchase - Personal Care & Toiletries
Bi-weekly Monthly Once in 3-5 months Once in 6 months
(n=371)
(n=367)
(n=333)
(n=216)
(n=117)
(n=94)
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Figure 107: Top 5 Most Frequently Purchased / Consumed Clothing Items - Breakdown by Monthly Household Income (MHI)
(Q1. What are the top 5 items for each product category (food & beverages, cleaning products, personal
care products and clothing) that you have purchased frequently and mostly consumed?)
Top 5 Most Frequently Purchased / Consumed Clothing Items
- Breakdown by Geographical Region
Central
(n=120)
Northern
(n=94)
Southern
(n=75)
Eastern
(n=52)
Sarawak
(n=34)
Sabah
(n=25)
1. Women daily
clothes (78%)
1. Men daily
clothes (73%)
1. Women daily
clothes (71%)
1. Women daily
clothes (77%)
1. Women daily
clothes (79%)
1. Men daily
clothes (72%)
1. Men daily
clothes (78%)
2. Women daily
clothes (70%)
2 Men daily
clothes (67%)
1. Men daily
clothes (77%)
2. Men daily
clothes (62%)
2. Men
innerwear (60%)
3. Women
innerwear (44%)
3. Children daily
clothes (50%)
3. Children daily
clothes (57%)
3. Children daily
clothes (71%)
2. Children daily
clothes (62%)
3. Women daily
clothes (56%)
4. Children daily
clothes (43%)
4. Women
innerwear (37%)
4. Women
innerwear (37%)
4. Women
innerwear (29%)
4. Women
innerwear (56%)
4. Women
innerwear (52%)
73%
73%
77%
66%
73%
72%
69%
84%
52%
48%
58%
48%
41%
42%
41%
38%
34%
36%
28%
43%
30%
21%
30%
45%
28%
22%
36%
25%
TOTAL
MHI ≤ RM4,000
MHI RM4,001 - RM10,000
MHI > RM10,000
Top 5 Most Frequently Purchased / Consumed Clothing Items - Breakdown by Monthly Household Income (MHI)
Women daily clothes
Men daily clothes
Children daily clothes
Women innerwear
Men innerwear
Men business attire
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4. Men business
attire (43%)
5. Men
innerwear (30%)
5. Men
innerwear (35%)
4. Men
innerwear (29%)
5. Men
innerwear (26%)
5. Children daily
clothes (24%)
Clothing is the second highest expenditure category for Malaysians within the scope of the study and
the monthly spending amount varies greatly across different household income level. The low
income households generally do not spend more than RM300 monthly on clothing, however 8% of
the medium income household fork out more than RM300 and 23% of the high income households
pay more than RM500 on clothing on a monthly basis.
Figure 108: Monthly Expenditure on Clothing
(Q2. Based on your experience and estimation, how much do you spend on the selected items on
monthly basis?)
Generally, Malaysians buy daily clothes (men, women and children) once a month, whereas
innerwear (men and women) and business attire (men and women) are purchased every 3-5
months.
8%
16%
3%
20%
25%
23%
3%
25%
27%
23%
25%
37%
31%
43%
36%
6%
1%
7%
14%
5%
0%
1%
23%
TOTAL
MHI ≤ RM4,000
MHI RM4,001 - RM10,000
MHI > RM10,000
Monthly Expenditure on Clothing
≤ RM25 RM26 - RM50 RM51 - RM100
RM101 - RM300 RM301 - RM500 > RM500
(n=400)
(n=160)
(n=160)
(n=80)
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Figure 109: Frequency of Product Purchase - Clothing
(Q3. How frequent do you buy the selected items?)
9.2.3 Preferred Retail Channel
Supermarket is the most preferred retail format to purchase food and beverages products, followed
by mini market. Hypermarket is within the top two popular venue for consumers in the central and
northern region to purchase such products, where such retail format is widely available. The
popularity of purchasing food and beverages from provision stores decreases with household
income level.
2%
1%
1%
1%
1%
1%
1%
48%
40%
54%
25%
14%
31%
27%
38%
40%
31%
53%
53%
45%
47%
10%
15%
12%
16%
27%
19%
21%
3%
3%
1%
2%
4%
4%
4%
Women daily clothes
Men daily clothes
Children daily clothes
Women innerwear
Men innerwear
Men business attire
Women business attire
Frequency of Product Purchase - Clothing
Bi-weekly Monthly Once in 3-5 months Once in 6 months Once a year
(n=293)
(n=292)
(n=206)
(n=163)
(n=135)
(n=118)
(n=112)
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Figure 110: Place of Purchase - Food & Beverages
(Q4. Where typically do you buy the selected items?)
For the purchase of key household cleaning products, supermarket is the top preferred retail
channel, followed by mini market and hypermarket. Similar to the purchase of food and beverages
products, hypermarket is a popular venue for consumers in the central and northern region to
purchase such products, whereas significantly less households from the high income group make
their purchases from the provision stores.
47%
41%
42%
41%
39%
79%
77%
71%
76%
77%
51%
51%
47%
49%
40%
4%
18%
16%
23%
13%
43%
48%
47%
43%
44%
11%
6%
7%
7%
9%
Essential food items
Baked goods
Hot beverages
Cold beverages
Dairy products
Hyper-market
Super-market
Mini-market
Convenience store
Provision store (Kedai Runcit)
Department Store
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Figure 111: Place of Purchase - Household Cleaning Products
(Q4. Where typically do you buy the selected items?)
Supermarket is the top preferred venue for consumers to buy key personal care & toiletries, followed
by hypermarket. Significant ratios of consumers also purchase such items from pharmacy stores,
especially shampoo and facial wash, and among the high household income group.
44%
48%
39%
42%
29%
79%
76%
80%
77%
91%
45%
46%
40%
42%
42%
1%
1%
1%
0%
1%
26%
24%
25%
24%
30%
7%
4%
8%
9%
9%
2%
0%
0%
0%
1%
Laundry cleaningdetergent
Dish detergent
Toilet/bathroomcleaner
Floor cleaner
Kitchen cleaner
Hyper-market
Super-market
Mini-market
Convenience store
Provision store (Kedai Runcit)
Department Store
Pharmacy
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Figure 112: Place of Purchase - Personal Care & Toiletries
(Q4. Where typically do you buy the selected items?)
Most of the Malaysian consumers prefer to purchase clothing from department stores. This is
followed by hypermarket and specialised store.
41%
47%
42%
35%
45%
46%
71%
69%
72%
65%
69%
70%
34%
34%
31%
27%
26%
27%
2%
1%
2%
1%
3%
5%
16%
15%
15%
10%
14%
5%
11%
14%
13%
20%
6%
20%
30%
27%
40%
41%
25%
31%
Tooth paste
Body Soap/ ShowerGel
Hair Shampoo
Facial wash
Tooth brush
Mouthwash
Hyper-market
Super-market
Mini-market
Convenience store
Provision store (KedaiRuncit)
Department Store
Pharmacy
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Figure 113: Place of Purchase - Clothing
(Q4. Where typically do you buy the selected items?)
Convenience and reasonable price are the top two criteria for Malaysian consumers to decide where
to make their purchases. Around three quarter of the high income households also place emphasis
on the availability of a wide range of products/brands, strategic locations, and discount and
promotion.
45%
44%
46%
48%
41%
39%
53%
10%
11%
11%
11%
11%
8%
7%
75%
79%
78%
77%
74%
85%
83%
22%
21%
16%
18%
16%
24%
26%
Women dailyclothes
Men daily clothes
Children dailyclothes
Women innerwear
Men innerwear
Men business attire
Women businessattire
Hyper-market
Super-market
Department Store
Specialised Store /Night or day market
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Figure 114: Reasons for Purchasing the Selected Items at the Selected Retail Outlets
(Q5. What are the reasons for purchasing the selected items at the selected retail outlets?)
80%
75%
70%
64%
63%
29%
8%
73%
69%
59%
58%
54%
25%
14%
84%
78%
75%
65%
66%
29%
4%
84%
80%
80%
75%
75%
38%
1%
Convenience
Reasonable price
Wide range of products/brandsavailable
Strategic location
Discount and promotion
Loyalty card/collecting points
No other options in the area
Total MHI ≤ RM 4,000 MHI RM 4,001 - RM 10,000 MHI > RM 10,000
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9.2.4 e-Commerce
Around 95% of the consumers surveyed have never bought food and beverages products online.
Figure 115: Adoption of e-Commerce - Food & Beverages Items
(Q6. Do you purchase the selected items from e-Commerce platforms (e.g. Lazada, Shopee, Happy
Fresh, Tesco Online, Mydin Online)?)
The purchase of household cleaning products through e-commerce is also uncommon.
1%
1%
1%
1%
1%
3%
4%
2%
4%
4%
96%
95%
96%
95%
96%
Essential food items
Baked goods
Hot beverages
Cold beverages
Dairy products
Often Sometimes Seldom Never
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Figure 116: Adoption of e-Commerce - Household Cleaning Products
(Q6. Do you purchase the selected items from e-Commerce platforms (e.g. Lazada, Shopee, Happy
Fresh, Tesco Online, Mydin Online)?)
A small fraction of the consumers do purchase personal care products online, especially hair
shampoo and facial wash. The adoption of e-commerce for the purchase increases with the
household income.
Figure 117: Adoption of e-Commerce - Personal Care & Toiletries
2%
1%
5%
6%
6%
9%
7%
93%
93%
94%
90%
93%
Laundry cleaning detergent
Dish detergent
Toilet/bathroom cleaner
Floor cleaner
Kitchen cleaner
Often Sometimes Seldom Never
1%
1%
1%
2%
3%
8%
10%
1%
7%
5%
5%
10%
13%
4%
3%
92%
91%
81%
77%
94%
89%
Tooth paste
Body Soap/ Shower Gel
Hair Shampoo
Facial wash
Tooth brush
Mouthwash
Often Sometimes Seldom Never
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(Q6. Do you purchase the selected items from e-Commerce platforms (e.g. Lazada, Shopee, Happy
Fresh, Tesco Online, Mydin Online)?)
As compared to other fast moving consumer goods, the adoption of e-commerce is the highest
within the clothing product category; with around 20% of the consumers sometimes purchase daily
clothes and business attire online.
Figure 118: Adoption of e-Commerce - Clothing
(Q6. Do you purchase the selected items from e-Commerce platforms (e.g. Lazada, Shopee, Happy
Fresh, Tesco Online, Mydin Online)?)
The key attractions for consumers to purchase their products online are discount and promotion
available online, cheaper than normal retail shops and convenience. These aspects are especially
attractive for consumers who stay in the rural areas; with more than 85% of them make their
purchases online due to these reasons.
3%
2%
2%
2%
2%
26%
21%
19%
8%
4%
19%
19%
19%
17%
19%
13%
7%
20%
27%
51%
61%
59%
79%
89%
59%
53%
Women daily clothes
Men daily clothes
Children daily clothes
Women innerwear
Men innerwear
Men business attire
Women business attire
Often Sometimes Seldom Never
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Figure 119: Reasons for Purchasing the Selected Items Online
(Q7. What are the reasons for purchasing selected items online?)
86%
81%
74%
65%
65%
64%
3%
85%
77%
71%
62%
61%
65%
3%
93%
100%
86%
79%
79%
59%
Discount and promotion
Cheaper than normal retail shops
Convenience
Can review and compare productseasily
The products are not sold in retailstore in my area
Overseas products that are notavailable locally
Others
Total Urban Rural(n=153)
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9.2.5 Competitive Landscape and Product Offerings
On average, there are around 4 to 6 groceries retail stores within the survey respondents‟ housing
area. The urban areas have around 5 to 6 market players within each housing area, whereas the
rural areas have around 3 to 4. Only 2% from the 400 consumers surveyed indicated that there are
only 1 groceries retail store in their housing area.
Figure 120: Number of Groceries Retail Stores within Respondent's Housing Area
(Q10. Could you indicate approximately how many groceries retail stores are there within your housing
area?)
Sixty six per cent of the respondents in central region, 59% in southern region and 53% in east
Malaysia have noticed price difference for the same retail outlet brand in different locations. Half of
the respondents who noticed such phenomena stated that the price difference is within 5%, while
30% of the respondents said the price difference is around 6% to 10%.
More than half of the consumers surveyed across all geographical region noticed price difference for
the same product sold by competing retail outlets within their housing areas. Nonetheless, the price
difference is typically quite small (within 5%).
5.32 5.72
4.48
5.90
3.79
7.24
5.08
5.85
3.73
4.50
5.00
4.00
5.00
4.00
5.00 5.00 5.00
3.00
TOTAL CentralRegion
NorthernRegion
SouthernRegion
EasternRegion
Sarawak Sabah Urban Rural
Mean Median
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Figure 121: Price Difference for the Same Retail Outlet Brand in Different Locations
(Q11.Have you noticed any price difference for the same retail outlet brand in different locations? (e.g.
The product price of Company X in store A is different than in store B). If yes, please indicate
approximately how much is the price difference.)
Figure 122: Price Difference for the Same Product Sold by Competing Retail Outlets
Yes 54%
No 44%
Not applicabl
e 3%
Observed price difference for the same retail outlet brand in
different locations
≤ 5%, 51%
6-10%, 30%
11-15%, 7%
16-20%, 5% > 20%,
7%
Magnitude of Price Difference
Yes 64%
No 36%
Observed price difference for the same product sold by competing retail outlets
≤ 5%, 60%
6-10%, 26%
11-15%, 6%
16-20%, 4%
> 20%, 4%
Magnitude of Price Difference
(n=400) (n=214)
(n=400) (n=256)
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(Q12. Do you notice any price difference of the same product sold by competing retail outlets in your
area? If yes, please indicate approximately how much is the price difference.)
A big majority of the consumers surveyed (more than 80%) indicated that the retail outlet where they
purchased their products offer several brands of similar products and they are satisfied with the
brand options and variations provided. The dissatisfaction level is higher in the central region as
compared to other locations, where nearly 30% of the consumers are unhappy with the brand
options and variations provided.
Figure 123: Availability and Satisfactions with Brand Options
(Q15. Does the retail outlet where you purchased your product carry several brands of similar product?)
(Q16. Are you satisfied with the brand options and variations provided by the retail outlet where you
purchased your product?)
9.2.6 Product Pricing
Within the food and beverages category, almost 60% of the consumers in central region noticed
price increase of up to 5% for essential food items in the last 12 months. More than 50% of the
consumers in southern region highlighted price increase for canned food, frozen food and dairy
products within the same period. Such price increase is typically within 5%. In Sarawak, 57% of the
consumers indicated price increase of 6-10% in canned food.
In terms of household cleaning products and personal care & toiletries, most of the surveyed
respondents did not notice any price increase for the products within these two product categories in
the last 12 months.
No 13%
Yes 87%
Availability of Several Brands for Similar Products
No, 16%
Yes, 84%
Satisfaction with the brand options and variations
(n=400) (n=400)
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For clothing, more than half consumers in the central region noticed price increase for men daily
wear, children daily wear and men business attire in the past 12 months. 53% of the consumers in
eastern region also observed price increase in men daily wear. Consumers in eastern region
indicated that the price increase for men daily wear is between 6% and 10%. In the central region,
consumers have very diverse opinion on the magnitude of price increase for men daily wear and
men business attire, .however 41% of them feel that the price increase for children daily wear is
between 6% and 10%.
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Figure 124: Observed Price Increase in the Past 12 Months - Food & Beverages
(Q17. Have you noticed any increased in price for the selected items at your selected retail outlets in the
past 12 months? If yes, please specify the percentage of price increase.)
34%
27%
20%
22%
37%
35%
42%
57%
32%
22%
30%
37%
38%
29%
23%
20%
17%
14%
40%
23%
41%
35%
37%
29%
18%
52%
63%
71%
15%
17%
11%
19%
26%
18%
17%
9%
24%
18%
31%
33%
45%
57%
39%
19%
7%
0%
25%
7%
0%
Essential food items
Baked goods
Hot beverages
Cold beverages
Dairy products
Frozen food
Canned food
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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Figure 125: Observed Price Increase in the Past 12 Months - Household Cleaning Products
(Q17. Have you noticed any increased in price for the selected items at your selected retail outlets in the
past 12 months? If yes, please specify the percentage of price increase.)
32%
26%
23%
30%
22%
46%
29%
22%
21%
25%
21%
25%
34%
35%
26%
31%
37%
18%
33%
18%
18%
16%
17%
39%
23%
36%
20%
32%
33%
18%
24%
16%
0%
0%
0%
Laundry cleaning detergent
Dish detergent
Toilet/bathroom cleaner
Floor cleaner
Kitchen cleaner
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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Figure 126: Observed Price Increase in the Past 12 Months - Personal Care Products
(Q17. Have you noticed any increased in price for the selected items at your selected retail outlets in the
past 12 months? If yes, please specify the percentage of price increase.)
21%
28%
33%
25%
18%
27%
31%
44%
41%
34%
20%
40%
19%
14%
33%
20%
17%
15%
7%
25%
24%
26%
5%
25%
18%
20%
37%
20%
21%
29%
36%
32%
34%
21%
33%
10%
18%
16%
11%
8%
Tooth paste
Body Soap/ Shower Gel
Hair Shampoo
Facial wash
Tooth brush
Mouthwash
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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Figure 127: Observed Price Increase in the Past 12 Months - Clothing
(Q17. Have you noticed any increased in price for the selected items at your selected retail outlets in the
past 12 months? If yes, please specify the percentage of price increase.)
35%
37%
30%
22%
16%
36%
29%
44%
54%
52%
38%
36%
61%
45%
30%
19%
21%
14%
4%
10%
20%
28%
30%
26%
25%
4%
17%
19%
45%
53%
27%
13%
21%
31%
26%
33%
19%
11%
22%
33%
7%
6%
15%
7%
0%
Women daily clothes
Men daily clothes
Children daily clothes
Women innerwear
Men innerwear
Men business attire
Women business attire
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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9.2.7 Product Bundling
Product bundling is not very common in the Malaysian retail space, especially for clothing, which
usually only some children daily clothes are bundled together for sales. Consumers are always given
a choice to purchase a single item.
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Figure 128: Observed Product Bundling - Food & Beverages
5%
8%
7%
17%
19%
3%
9%
6%
32%
21%
3%
7%
6%
4%
14%
12%
12%
9%
15%
35%
0%
0%
0%
0%
11%
13%
17%
27%
23%
17%
0%
0%
17%
17%
0%
Essential food items
Baked goods
Hot beverages
Cold beverages
Dairy products
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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Figure 129: Observed Product Bundling - Household Cleaning Products
17%
16%
16%
27%
27%
19%
14%
17%
28%
33%
5%
12%
13%
25%
28%
28%
35%
24%
24%
20%
18%
3%
14%
30%
26%
21%
20%
16%
28%
27%
14%
16%
Laundry cleaning detergent
Dish detergent
Toilet/bathroom cleaner
Floor cleaner
Kitchen cleaner
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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Figure 130: Observed Product Bundling - Personal Care Products
16%
16%
16%
13%
21%
22%
15%
18%
20%
7%
15%
13%
11%
5%
8%
13%
20%
23%
26%
25%
19%
19%
30%
25%
6%
15%
9%
7%
21%
35%
33%
26%
28%
21%
29%
25%
10%
9%
16%
22%
8%
Tooth paste
Body Soap/ Shower Gel
Hair Shampoo
Facial wash
Tooth brush
Mouthwash
TOTAL
Central Region
Nothern Region
Southern Region
Eastern Region
Sarawak
Sabah
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9.3 Price Trends Comparison
9.3.1 Rempah Ratus
Average prices of Rempah Sup, Biji Sawi, Serbuk Kunyit, Jintan Manis, Buah Pala in 2019 seem to
vary significantly across different formats. The price difference for Rempah Sup was 40% higher, Biji
Sawi 34%, Serbuk Kunyit 31%, Jintan Manis 27% and Buah Pala was 25% higher across formats.
Figure 131: Average Price of Rempah Ratus by Format, Malaysia (2019)
- 2.00 4.00 6.00 8.00 10.00 12.00 14.00
Kulit Kayu Manis (100g)
Serbuk Rempah - Kari Daging (TidakBerbungkus) (100g)
Rempah Kurma (Tidak Berbungkus) (100g)
Serbuk Rempah - Kari Ikan (Tidak Berbungkus)(100g)
Serbuk Cili (Tidak Berbungkus) (100g)
Jintan Manis (Kasar) (100g)
Serbuk Kunyit (Tidak Berbungkus) (100g)
Lada Putih (100g)
Buah Pala (100g)
Lada Hitam (100g)
Ketumbar (100g)
Buah Pelaga (100g)
Rempah Sup (Tidak Berbungkus) (100g)
Bunga Cengkih (100g)
Biji Sawi (100g)
Halba (100g)
Buah Keras (100g)
Bunga Lawang (100g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
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Figure 132: Average Price of Rempah Ratus by State, Malaysia (2019)
9.3.2 Rempah Ratus (Berbungkus)
Average price of Garam Halus Biasa (Pelbagai Jenama) (±350g), Serbuk Kari Kurma Alagappas
(200g), Serbuk Cabai Alagappas (230g), Serbuk Kari Daging Alagappas (250g) and Perencah Nasi
Goreng Cina Adabi (17g) were found to be significantly different with price difference ranging from
32% for Garam Halus Biasa (Pelbagai Jenama) to 21% for Perencah Nasi Goreng Cina Adabi.
- 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00
Kulit Kayu Manis (100g)
Serbuk Rempah - Kari Daging (Tidak Berbungkus)(100g)
Rempah Kurma (Tidak Berbungkus) (100g)
Serbuk Rempah - Kari Ikan (Tidak Berbungkus)(100g)
Serbuk Cili (Tidak Berbungkus) (100g)
Jintan Manis (Kasar) (100g)
Serbuk Kunyit (Tidak Berbungkus) (100g)
Lada Putih (100g)
Buah Pala (100g)
Lada Hitam (100g)
Ketumbar (100g)
Buah Pelaga (100g)
Rempah Sup (Tidak Berbungkus) (100g)
Bunga Cengkih (100g)
Biji Sawi (100g)
Halba (100g)
Buah Keras (100g)
Bunga Lawang (100g)
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
KL
Kelantan
Kedah
Johor
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Figure 133: Average Price of Rempah Ratus (Berbungkus) by Format, Malaysia (2019)
9.3.3 Beras
Average prices of rice Beras super Cap Jati TWR 5% (import) 10kg was found to be 29% higher in
Pasar Mini and Beras Pulut Thailand (Biasa) Cap Floral (1kg) was 20% higher in Supermarket.
- 5.00 10.00
Garam Halus Biasa (Pelbagai Jenama)…
Asam Jawa (Tidak Berbiji) Adabi (200g)
Asam Jawa (Berbiji) Cap Penguin (200g)
Perencah Nasi Goreng Ikan Bilis Seri Aji…
Perencah Nasi Goreng Cina Adabi (17g)
Perencah Tom Yam Adabi (40g)
Kiub Sup Tomyam (Maggi) (2x10g)
Serbuk Kari Daging Alagappas (250g)
Serbuk Kunyit Babas (250g)
Serbuk Cabai Alagappas (230g)
Serbuk Cili Babas (250g)
Serbuk Cili Kijang (250g)
Serbuk Kunyit Alagappas (250g)
Sup Punjut Mak Siti (10g)
Serbuk Rempah Sup Mak Siti (250g)
Serbuk Kunyit Adabi (250g)
Sup Bunjut Adabi (8g)
Serbuk Perencah Sup Adabi (250g)
Serbuk Kurma Babas (125g)
Serbuk Kurma Ayam & Daging Adabi (250g)
Serbuk Sup Faiza (220g)
Serbuk Kari Kurma Alagappas (200g)
Serbuk Kari Daging Babas (250g)
Serbuk Kari Ikan Adabi (250g)
Serbuk Kari Ikan Alagappas (250g)
Serbuk Kari Ikan Babas (250g)
Serbuk Kari Ayam dan Daging Adabi (250g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
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Figure 134: Average Price of Beras by Format, Malaysia (2019)
- 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00
Beras Super Cap Jati TWR 5% (Import) (10kg)
Beras Pulut Thailand (Biasa) Cap Floral (1kg)
Beras Pulut Thailand (Susu) Cap Sakura (1kg)
Beras Basmathi - Faiza (Kashmir) (5kg)
Beras Super Cap Rambutan 5% (Import)(10kg)
Beras Super Tempatan (ST15%) (10kg)
Beras Cap Faiza Emas (SST5%) (10kg)
Beras Cap Rambutan (SST5%) (10kg)
Beras Cap Jasmine (SST5%) (10kg)
Beras Cap Jati (SST5%) (10kg)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
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Prices of most of the rice are significantly higher in Sabah and Sarawak, particularly for Beras Super
Cap Jati TWR 5% (Import) (10kg) where the price difference was found to be 49%.
Figure 135: Average Price of Beras by State, Malaysia (2019)
- 10.00 20.00 30.00 40.00 50.00 60.00
Beras Super Cap Jati TWR 5% (Import) (10kg)
Beras Pulut Thailand (Biasa) Cap Floral (1kg)
Beras Pulut Thailand (Susu) Cap Sakura (1kg)
Beras Basmathi - Faiza (Kashmir) (5kg)
Beras Super Cap Rambutan 5% (Import) (10kg)
Beras Super Tempatan (ST15%) (10kg)
Beras Cap Faiza Emas (SST5%) (10kg)
Beras Cap Rambutan (SST5%) (10kg)
Beras Cap Jasmine (SST5%) (10kg)
Beras Cap Jati (SST5%) (10kg)
Average Price
Overall Terengganu
Selangor Sarawak
Sabah Putrajaya
Perlis Perak
Pahang P.Pinang
N Sembilan Melaka
Labuan KL
Kelantan Kedah
Johor
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9.3.4 Bihun
Across the formats, average price difference is less than 10% for Bihun.
Figure 136: Average Price of Bihun by Format, Malaysia (2019)
Average prices for bihun is highest in Sarawak while lowest in Sabah with a difference of 54% for
Bihun Kering (Cap Bintang) (400g) and 31% for Bihun Kering (Cap Jasmine) (400g).
Figure 137: Average Price of Bihun by State, Malaysia (2019)
- 0.50 1.00 1.50 2.00 2.50 3.00 3.50
Bihun Kering (Cap Jasmine)(400g)
Bihun Kering (Cap Bintang)(400g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00
Bihun Kering (Cap Jasmine) (400g)
Bihun Kering (Cap Bintang) (400g)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
KL
Kelantan
Kedah
Johor
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9.3.5 Roti
Though the average price of bread is similar across formats, Roti Sandwich Gardenia (400g) was
31% higher in Sabah and Labuan while Roti Gardenia WholeMeal (400g) was 26% higher in Sabah.
Figure 138: Average Price of Roti by Format, Malaysia (2019)
Though the average price of bread is similar across formats, Roti Sandwich Gardenia (400g) was
31% higher in Sabah and Labuan while Roti Gardenia WholeMeal (400g) was 26% higher in Sabah.
Figure 139: Average Price of Roti by State, Malaysia (2019)
- 0.50 1.00 1.50 2.00 2.50 3.00 3.50
Roti Sandwich Gardenia (400g)
Roti Gardenia WholeMeal (400g)
Sandwich Massimo DenganGerma Gandum (400g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 1.00 2.00 3.00 4.00 5.00
Roti Sandwich Gardenia (400g)
Roti Gardenia WholeMeal (400g)
Sandwich Massimo Dengan GermaGandum (400g)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
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9.3.6 Gula
Average price difference Gula Merah Lembut (Pelbagai Jenama) (500g) was 16% higher while Gula
Halus Castor (Pelbagai Jenama) (500g) was 12% at Pasar Mini.
Figure 140: Average price of Gula by Format, Malaysia (2019)
Average price of Gula Merah Lembut (Pelbagai Jenama) (500g) was found to highest at Labuan with
a difference of 32% compared to Melaka similarly average price of Gula Halus Castor (Pelbagai
Jenama) (500g) was 20% more in Labuan.
Figure 141: Average Price of Gula by State, Malaysia (2019)
- 0.50 1.00 1.50 2.00 2.50 3.00 3.50
Gula Halus Castor (PelbagaiJenama) (500g)
Gula Merah Lembut (PelbagaiJenama) (500g)
Gula Putih Bertapis Kasar(Pelbagai Jenama) (1kg)
Gula Putih Bertapis Halus(Pelbagai Jenama) (1kg)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00
Gula Halus Castor (PelbagaiJenama) (500g)
Gula Merah Lembut (PelbagaiJenama) (500g)
Gula Putih Bertapis Kasar (PelbagaiJenama) (1kg)
Gula Putih Bertapis Halus (PelbagaiJenama) (1kg)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
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9.3.7 Tepung
Average prices of most of flour did not vary much across various formats. Highest difference of 17%
was found for Tepung Jagung (Star Brand) (400g).
Figure 142: Average Price of Tepung by Format, Malaysia (2019)
When compared to formats, the price difference was significant across states. On an average
Tepung Jagung (Star Brand) (400g) was 48% higher at Labuan, followed by Tepung Beras
(Pelbagai Jenama) (500g) which was 39% higher at Sabah and Tepung Naik Sendiri Cap 'MFM'
(850g) was 35% higher at Labuan.
Figure 143: Average Price of Tepung by State, Malaysia (2019)
- 1.00 2.00 3.00 4.00 5.00
Tepung Beras (Pelbagai Jenama)(500g)
Tepung Gandum NGP(Berbungkus, Cap Sauh) (1kg)
Tepung Gandum NGP(Berbungkus, Cap Faiza) (1kg)
Tepung Gandum GP(Berbungkus) Pelbagai Jenama…
Tepung Jagung (Star Brand)(400g)
Tepung Naik Sendiri Cap 'MFM'(850g)
Tepung Pulut (Pelbagai Jenama)(500g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 1.00 2.00 3.00 4.00 5.00
Tepung Beras (Pelbagai Jenama)(500g)
Tepung Gandum NGP (Berbungkus,Cap Sauh) (1kg)
Tepung Gandum NGP (Berbungkus,Cap Faiza) (1kg)
Tepung Gandum GP (Berbungkus)Pelbagai Jenama (1kg)
Tepung Jagung (Star Brand) (400g)
Tepung Naik Sendiri Cap 'MFM'(850g)
Tepung Pulut (Pelbagai Jenama)(500g)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
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9.3.8 Minyak Dan Lemak
With the exception of Minyak Jagung Cap Mazola (2kg), the difference in average prices of oil
across various formats was found to be less than 10%. Minyak Jagung Cap Mazola (2kg) average
price was 39% lower in KEDAI RUNCIT format.
Figure 144: Average Price of Minyak Dan Lemak by Format, Malaysia (2019)
Average price of Minyak Jagung Cap Mazola (2kg) was 47% higher in Melaka, while Minyak Masak
Tulen Cap Vesawit (5kg) and Minyak Masak Campur Cap Helang (5kg) were 23% and 21%
respectively higher at Labuan.
- 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00
Minyak Sapi Cap Windmill Gheeblend (400g)
Minyak Sapi Cap QBB (400g)
Minyak Masak Paket (Pelbagai Jenama) (1kg)
Minyak Masak Tulen Cap Vesawit (1kg)
Minyak Masak Tulen Cap Seri Murni (1kg)
Minyak Masak Tulen Cap Buruh (1kg)
Minyak Masak Campur Cap Pisau (1kg)
Minyak Masak Campur Cap Neptune (1kg)
Minyak Masak Campur Cap Helang (1kg)
Minyak Jagung Cap Vecorn (1kg)
Minyak Jagung Cap Daisy (1kg)
Minyak Jagung Cap Mazola (1kg)
Minyak Masak Tulen Cap Vesawit (2kg)
Minyak Masak Tulen Cap Seri Murni (2kg)
Minyak Masak Tulen Cap Buruh (2kg)
Minyak Masak Campur Cap Pisau (2kg)
Minyak Masak Campur Cap Neptune (2kg)
Minyak Masak Campur Cap Helang (2kg)
Minyak Jagung Cap Vecorn (2kg)
Minyak Jagung Cap Daisy (2kg)
Minyak Jagung Cap Mazola (2kg)
Minyak Jagung Cap Vecorn (3kg)
Minyak Jagung Cap Daisy (3kg)
Minyak Jagung Cap Mazola (3kg)
Minyak Masak Tulen Cap Vesawit (5kg)
Minyak Masak Tulen Cap Seri Murni (5kg)
Minyak Masak Tulen Cap Buruh (5kg)
Minyak Masak Campur Cap Pisau (5kg)
Minyak Masak Campur Cap Neptune (5kg)
Minyak Masak Campur Cap Helang (5kg)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
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Figure 145: Average Price of Minyak Dan Lemak by State, Malaysia (2019)
9.3.9 Ikan Dalam Tin
Average prices for canned fish did not vary significantly across various formats and states
- 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00
Minyak Sapi Cap Windmill Gheeblend (400g)
Minyak Sapi Cap QBB (400g)
Minyak Masak Paket (Pelbagai Jenama)…
Minyak Masak Tulen Cap Vesawit (1kg)
Minyak Masak Tulen Cap Seri Murni (1kg)
Minyak Masak Tulen Cap Buruh (1kg)
Minyak Masak Campur Cap Pisau (1kg)
Minyak Masak Campur Cap Neptune (1kg)
Minyak Masak Campur Cap Helang (1kg)
Minyak Jagung Cap Vecorn (1kg)
Minyak Jagung Cap Daisy (1kg)
Minyak Jagung Cap Mazola (1kg)
Minyak Masak Tulen Cap Vesawit (2kg)
Minyak Masak Tulen Cap Seri Murni (2kg)
Minyak Masak Tulen Cap Buruh (2kg)
Minyak Masak Campur Cap Pisau (2kg)
Minyak Masak Campur Cap Neptune (2kg)
Minyak Masak Campur Cap Helang (2kg)
Minyak Jagung Cap Vecorn (2kg)
Minyak Jagung Cap Daisy (2kg)
Minyak Jagung Cap Mazola (2kg)
Minyak Jagung Cap Vecorn (3kg)
Minyak Jagung Cap Daisy (3kg)
Minyak Jagung Cap Mazola (3kg)
Minyak Masak Tulen Cap Vesawit (5kg)
Minyak Masak Tulen Cap Seri Murni (5kg)
Minyak Masak Tulen Cap Buruh (5kg)
Minyak Masak Campur Cap Pisau (5kg)
Minyak Masak Campur Cap Neptune (5kg)
Minyak Masak Campur Cap Helang (5kg)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
KL
Kelantan
Kedah
Johor
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239
Figure 146: Average Price of Ikan Dalam Tin by Format, Malaysia (2019)
Figure 147: Average Price of Ikan Dalam Tin by State, Malaysia (2019)
- 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00
Tuna Cap TC Boy (Sandwich Delite)…
Tuna Cap Ayam (Tuna Mayonnaise)…
Mackarel Cap King cup (Sos Tomato)…
Mackarel Cap King cup (Sos Tomato)…
Mackarel Cap Ayam (Sos Tomato) (425g)
Mackarel Cap Ayam (Sos Tomato) (155g)
Sardin Cap Ayam (Sos Tomato) (155g)
Sardin Cap Ayam (Sos Tomato) (425g)
Sardin Cap King Cup (Sos Tomato) (155g)
Sardin Cap King Cup (Sos Tomato) (425g)
Sardin Cap Adabi (Sos Tomato) (425g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00
Tuna Cap TC Boy (Sandwich Delite) (180g)
Tuna Cap Ayam (Tuna Mayonnaise) (160g)
Mackarel Cap King cup (Sos Tomato) (425g)
Mackarel Cap King cup (Sos Tomato) (155g)
Mackarel Cap Ayam (Sos Tomato) (425g)
Mackarel Cap Ayam (Sos Tomato) (155g)
Sardin Cap Ayam (Sos Tomato) (155g)
Sardin Cap Ayam (Sos Tomato) (425g)
Sardin Cap King Cup (Sos Tomato) (155g)
Sardin Cap King Cup (Sos Tomato) (425g)
Sardin Cap Adabi (Sos Tomato) (425g)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
KL
Kelantan
Kedah
Johor
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240
9.3.10 Kicap Dan Sos
Similar to canned fish, average prices of kicap dan sos did not vary much across various formats.
Figure 148: Average Price of Kicap Dan Sos by Format, Malaysia (2019)
Average price of Kicap Tamin (Dark Soy Sauce) (330ml) was found to be 49% higher in Labuan,
Kicap Lemak Manis Cap Jalen (650ml) was 21% higher at Kelantan, price of Kicap Masin Adabi
(340ml) was found to be 20% higher at Labuan and average price of Sos Cili Life (340g) was 20%
higher at Sabah.
- 1.00 2.00 3.00 4.00 5.00 6.00 7.00
Sos Cili Lingham's (340g)
Sos Cili Kimball (340g)
Sos Cili Life (340g)
Sos Tomato Life (330g)
Sos Cili Life Thai (360g)
Sos Cili Maggi (340g)
Sos Tomato Maggi (325g)
Sos Cili Maggi (500g)
Sos Tiram Maggi (340g)
Sos Tiram Adabi (510g)
Sos Tiram Nona (510g)
Sos Tiram Kimball (510g)
Kicap Masin Adabi (340ml)
Kicap Lemak Masin Cap Kipas Udang…
Kicap Manis Adabi (340ml)
Kicap Lemak Manis Cap Kipas Udang…
Kicap Tamin (Dark Soy Sauce) (330ml)
Kicap Lemak Manis Cap Jalen (650ml)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
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241
Figure 149: Average Price of Kicap Dan Sos by State, Malaysia (2019)
9.3.11 Sapuan (Spreads)
With exception of Mainland Chesdale Cheddar Cheese Spread 12 Cheddar (250g), average prices
of rest of spreads were less than 10%. Average price of Mainland Chesdale Cheddar Cheese
Spread 12 Cheddar (250g) was 24% higher in Kedai Runcit.
- 1.00 2.00 3.00 4.00 5.00 6.00 7.00
Sos Cili Lingham's (340g)
Sos Cili Kimball (340g)
Sos Cili Life (340g)
Sos Tomato Life (330g)
Sos Cili Life Thai (360g)
Sos Cili Maggi (340g)
Sos Tomato Maggi (325g)
Sos Cili Maggi (500g)
Sos Tiram Maggi (340g)
Sos Tiram Adabi (510g)
Sos Tiram Nona (510g)
Sos Tiram Kimball (510g)
Kicap Masin Adabi (340ml)
Kicap Lemak Masin Cap Kipas…
Kicap Manis Adabi (340ml)
Kicap Lemak Manis Cap Kipas…
Kicap Tamin (Dark Soy Sauce)…
Kicap Lemak Manis Cap Jalen…
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
KL
Kelantan
Kedah
Johor
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242
Figure 150: Average Price of Sapuan (Spreads) by format, Malaysia (2019)
Average prices for Lepaan Buttercup (250g), Lepaan Farmcows (250g) was 27% and 36% higher in
Sarawak and Sabah respectively.
- 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00
Lepaan Buttercup (250g)
Lepaan Farmcows (250g)
Marjerin Planta (480g)
Marjerin Planta (240g)
Marjerin Daisy (480g)
Kraft Hi-Calcium Singles Processed Cheese12 Slices (250g)
Marjerin Daisy (240g)
Mayonis Sebenar Lady's Choice (220ml)
Mentega Kacang Halus Lady's Choice (500g)
Mentega Kacang Halus Lady's Choice (340g)
Jem Buah Campuran Lady's Choice (400g)
Seri Kaya Yeo's (480g)
Mainland Chesdale Cheddar Cheese Spread12 Cheddar (250g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
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243
Figure 151: Average Price of Sapuan (Spreads) by State, Malaysia (2019)
9.3.12 Mentega
Though average prices for butter saw only less than 10% difference across various formats,
Mentega SCS (Salted) (250g) average price was found to be 45% higher at Sarawak.
- 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00
Lepaan Buttercup (250g)
Lepaan Farmcows (250g)
Marjerin Planta (480g)
Marjerin Planta (240g)
Marjerin Daisy (480g)
Kraft Hi-Calcium Singles Processed Cheese 12Slices (250g)
Marjerin Daisy (240g)
Mayonis Sebenar Lady's Choice (220ml)
Mentega Kacang Halus Lady's Choice (500g)
Mentega Kacang Halus Lady's Choice (340g)
Jem Buah Campuran Lady's Choice (400g)
Seri Kaya Yeo's (480g)
Mainland Chesdale Cheddar Cheese Spread 12Cheddar (250g)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
KL
Kelantan
Kedah
Johor
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244
Figure 152: Average Price of Mentega by Format, Malaysia (2019)
Figure 153: Average Price of Mentega by Format, Malaysia (2019)
9.3.13 Santan (Kotak)
Average prices of Santan did not vary much across various formats and states with difference less
than 10%.
- 5.00 10.00 15.00 20.00
Mentega Anchor (Salted) (227g)
Mentega SCS (Salted) (250g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 5.00 10.00 15.00 20.00
Mentega Anchor (Salted) (227g)
Mentega SCS (Salted) (250g)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
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245
Figure 154: Average Price of Santan (Kotak) by Format, Malaysia (2019)
- 2.00 4.00 6.00 8.00 10.00 12.00
Santan Kelapa Jenama AyamBrand (1liter)
Santan Kelapa Jenama M&S(500ml)
Santan Kelapa Jenama Kara(200ml)
Santan Kelapa Jenama Harmuni(200ml)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
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Figure 155: Average Price of Santan (Kotak) by State, Malaysia (2019)
9.3.14 Penjagaan Diri
Berus Gigi Oral B (Complete Easy Clean - Soft) (1 btg) and Berus Gigi Colgate (Twister - Soft) (1
btg) average prices was found to be 13% higher at hypermarket when compared to the lowest
average prices.
- 2.00 4.00 6.00 8.00 10.00 12.00
Santan Kelapa Jenama Ayam Brand (1liter)
Santan Kelapa Jenama M&S (500ml)
Santan Kelapa Jenama Kara (200ml)
Santan Kelapa Jenama Harmuni (200ml)Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
KL
Kelantan
Kedah
Johor
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247
Figure 156: Average Price of Penjagaan Diri by Format, Malaysia (2019)
Berus Gigi Oral B (Complete Easy Clean - Soft) (1 btg) average price was 24% higher in Sabah
while Berus Gigi Colgate (Zig Zag - Soft) (1 btg) and Berus Gigi Colgate (Twister - Soft) (1 btg) was
found to be 16% higher in Selangor.
Figure 157: Average Price of Penjagaan Diri by State, Malaysia (2019)
9.3.15 Penjagaan Rumah
Average price difference of Sabun Buku Kuat Harimau (Pelbagai Jenis) (150g) was 25% higher and
Sabun Serbuk Breeze (Power Clean) (400g) was found to be 15% higher at Pasar Basah.
- 2.00 4.00 6.00 8.00 10.00 12.00
Sabun Palmolive (3 buku)Pelbagai Jenis (3 x 80g)
Sabun May (3 Buku) PelbagaiJenis (3 x 85g)
Sabun Lux (3 Buku) PelbagaiJenis (3 x 85g)
Ubat Gigi Fresh & White (PudinaSegar) (160g)
Berus Gigi Colgate (Zig Zag -Soft) (1 btg)
Berus Gigi Oral B (CompleteEasy Clean - Soft) (1 btg)
Berus Gigi Colgate (Twister -Soft) (1 btg)
Ubat Gigi Colgate (Pudina Segar)(250g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 2.00 4.00 6.00 8.00 10.00 12.00 14.00
Sabun Palmolive (3 buku) PelbagaiJenis (3 x 80g)
Sabun May (3 Buku) Pelbagai Jenis(3 x 85g)
Sabun Lux (3 Buku) Pelbagai Jenis(3 x 85g)
Ubat Gigi Fresh & White (PudinaSegar) (160g)
Berus Gigi Colgate (Zig Zag - Soft)(1 btg)
Berus Gigi Oral B (Complete EasyClean - Soft) (1 btg)
Berus Gigi Colgate (Twister - Soft)(1 btg)
Ubat Gigi Colgate (Pudina Segar)(250g)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
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Figure 158: Average Price of Penjagaan Rumah by Format, Malaysia (2019)
Pelembut Pakaian - Softlan (Floral Fantasy) (900ml) average price was found to be 32% higher in
KL while Dynamo Power Gel (Regular) (2kg) was 22% higher in Terengganu and Sabun Buku Kuat
Harimau (Pelbagai Jenis) (150g) was 22% at Kelantan.
Figure 159: Average Price of Penjagaan Rumah by State, Malaysia (2019)
9.3.16 Bahan-Bahan Minuman
Average prices of Bahan-Bahan Minuman did not vary much across various formats. Among the
states, only Serbuk Kopi Cap Kapal Api (Berbungkus) (180g) was found to be 26% higher at
Labuan.
- 10.00 20.00 30.00
Pelembut Pakaian - Downy…
Pelembut Pakaian - Softlan (Floral…
Sabun Pencuci Sunlight…
Sabun Pencuci Axion Paste…
Sabun Pencuci Glo (Lime/Lemon)…
Sabun Pencuci Kuat Harimau…
Daia (Floral Freshness/Lemon…
Dynamo Power Gel (Regular) (2kg)
Sabun Buku Fab (Pelbagai Jenis)…
Sabun Buku Kuat Harimau…
Sabun Serbuk Breeze (Power…
Sabun Serbuk Fab (Perfect) (720g)
Sabun Serbuk Attack (Colour…
Sabun Serbuk Top (Super Colour)…
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 5.00 10.00 15.00 20.00 25.00
Pelembut Pakaian - Downy…
Pelembut Pakaian - Softlan…
Sabun Pencuci Sunlight…
Sabun Pencuci Axion Paste…
Sabun Pencuci Glo (Lime/Lemon)…
Sabun Pencuci Kuat Harimau…
Daia (Floral Freshness/Lemon…
Dynamo Power Gel (Regular) (2kg)
Sabun Buku Fab (Pelbagai Jenis)…
Sabun Buku Kuat Harimau…
Sabun Serbuk Breeze (Power…
Sabun Serbuk Fab (Perfect) (720g)
Sabun Serbuk Attack (Colour…
Sabun Serbuk Top (Super… Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
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249
Figure 160: Average Price of Bahan-Bahan Minuman by Format, Malaysia (2019)
Figure 161: Average Price of Bahan-Bahan Minuman by State, Malaysia (2019)
9.3.17 Tersedia Diminum
Average prices of Dutch Lady UHT Coklat (Kotak) (200ml) was 24% higher and Dutch Lady UHT
Fullcream (Kotak) (200ml) 22% higher at Pasar Basah.
- 5.00 10.00 15.00 20.00 25.00
Teh Lipton (Uncang) (100 beg)
Teh Lipton (Uncang) (25 beg)
Teh Boh (Serbuk) (500g)
Pearl Café Power Root 4 in 1…
Serbuk Kopi Hang Tuah…
Alicafé Power Root 5 in 1…
Quaker Oats Instant Oatmeal…
Nescafe Blend & Brew 3 in 1…
Nescafe Classic (Paket) (200g)
Milo (Paket) (1kg)
Kordial F&N (Oren) (2 liter)
Horlicks (Botol) (440g)
Nestle Coffee-Mate (450g)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 5.00 10.00 15.00 20.00 25.00
Teh Lipton (Uncang) (100 beg)
Teh Lipton (Uncang) (25 beg)
Teh Boh (Serbuk) (500g)
Pearl Café Power Root 4 in 1…
Serbuk Kopi Hang Tuah…
Alicafé Power Root 5 in 1…
Quaker Oats Instant Oatmeal…
Nescafe Blend & Brew 3 in 1…
Nescafe Classic (Paket) (200g)
Milo (Paket) (1kg)
Kordial F&N (Oren) (2 liter)
Horlicks (Botol) (440g)
Nestle Coffee-Mate (450g)
Average Price
Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
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Figure 162: Average Price of Tersedia Diminum by Format, Malaysia (2019)
Among Tersedia Dimimum, average price of Yogurt Nestle (Fat Free) (125g) was found to be 24%
higher at Sabah, while Drinho Soya (Kotak) (250ml) was 21% higher at Terengganu and Mirinda
Oren (Tin) (320ml) was 20% higher at Putrajaya.
Figure 163: Average Price of Tersedia Diminum by State, Malaysia (2019)
- 2.00 4.00 6.00 8.00
Livita With Honey (botol) (150ml)
Yogurt Marigold (Low Fat) (135g)
Jus Oren Sunkist (1liter)
Seven Up Lemon & Lime (Tin)…
Mirinda Oren (Botol) (1.5 liter)
F&N Oren (Botol) (1.5 liter)
F&N Oren (Tin) (325ml)
Coca Cola (Tin) (320ml)
Drinho Soya (Kotak) (250ml)
Dutch Lady UHT Fullcream…
Susu Marigold HL (1 liter)
Average Price
Overall
SUPERMARKET
PASAR MINI
PASAR BASAH
KEDAI RUNCIT
HYPERMARKET
- 2.00 4.00 6.00 8.00 10.00
Livita With Honey (botol) (150ml)
Yogurt Marigold (Low Fat) (135g)
Jus Oren Sunkist (1liter)
Seven Up Lemon & Lime (Tin)…
Mirinda Oren (Botol) (1.5 liter)
F&N Oren (Botol) (1.5 liter)
F&N Oren (Tin) (325ml)
Coca Cola (Tin) (320ml)
Drinho Soya (Kotak) (250ml)
Dutch Lady UHT Fullcream…
Susu Marigold HL (1 liter) Overall
Terengganu
Selangor
Sarawak
Sabah
Putrajaya
Perlis
Perak
Pahang
P.Pinang
N Sembilan
Melaka
Labuan
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