Big retailers banking on online marketplaces to boost sales

Sales on e-commerce platforms record faster growth than conventional retail


Brick-and-mortar retailers are expanding into the cybersphere to boost sales and reach a wider audience, as purchases from walk-in customers plateaued and competition increased in a challenging market.

Even the larger retailers are banking on online marketplaces to have a slice of the footing among buyers in the digital world.

Marketplaces like 11street, Lazada and Shopee were previously seen as the online gateways for small and individual retailers to market their products.

However, today big names and product manufacturers like Nestle have partnered these marketplaces to boost sales.

11street Malaysia COO Chuljin Yoon said some retailers have approached online marketplaces to market their products, as it would be too time consuming to manage both their own online platform and physical store concurrently.

“Some of the offline retailers including Tesco, Watsons and Harvey Norman have been reaching online platforms — including ours — as they couldn’t handle both online and offline businesses by themselves.

“They expand the business to online because they see the consumers increase in the e-commerce market,” Yoon told The Malaysian Reserve.

Marketplaces are at the top in the search for goods from computers and handphones, to household appliances to car accessories.

Sales on e-commerce platforms are recording faster growth than conventional retail, despite the value still considered small from the country’s total retail sales.

Discounts and offers on these marketplaces also make these platforms highly attractive, although retailers have had to slash prices.

Traffic at these marketplaces had increased significantly over the last few years, further shrinking the traditional retail sphere.

Global retailer Toys ‘R’ Us recently filed for bankruptcy protection in US courts as consumers abandoned its stores for the lower prices and convenience of online shopping.

Toys sold at sites like have put retailers like Toys ‘R’ Us in a difficult situation.

Kantar TNS Malaysia MD MC Lai believes it is inevitable for retailers like Tesco, Watsons and Harvey Norman to further expand in the online sphere.

“For example, brands like Nestle and Unilever have started their own e-commerce practice. So, retailers definitely need to make their moves.

“In fact, most of the established brands have started their own e-commerce practice because it is the only way to move forward,” the head of the market research agency said.

He said grocery retailers might have higher chances to be successful in the e-commerce market because of its convenience and safety.

Meanwhile, Yoon also warned that local retailers are facing the threat of international sellers entering Malaysia’s e-commerce market and hiking up the competition.