Johor Baru — a strong magnet for foreign retailers

The city does not lose to the Klang Valley today in terms of concept, new entry and occupancy rate

By FARA AISYAH / Graphic By TMR

Johor Baru has outpaced the Klang Valley to become the top choice among foreign retailers setting up shops in Malaysia, as a result of the city’s increasing population amid mega property development projects, as well as its more robust economy.

Retail Group Malaysia (RGM) MD Tan Hai Hsin said Johor Baru has become the starting point for many foreign retailers before venturing to other places in the country.

“A majority of them come from Taiwan, followed by South Korea. The top categories are food and beverages, and fashion and accessories.

“We have also noticed that many foreign retailers who opened their first store in Johor Baru tend to do well there. From there, they move to the Klang Valley and other places in Malaysia,” Tan told The Malaysian Reserve at the Malaysia Retailers Association’s Retail Conference 2018 in Kuala Lumpur recently.

Tan said Johor Baru has generated strong economic activities, in addition to the many mega property developments which have increased its population over time.

He added that the city’s retail market does not lose to the Klang Valley today in terms of concept, new entry, as well as occupancy rate.

In fact, Tan said, the frequency of retail openings and closings in the southern city is higher than in the Klang Valley.

“It is common to see a shop being open for six months and closed six months later in Johor Baru, but a new shop with almost the same concept will replace it immediately.

“If you see a shop being closed in the Klang Valley, there is a high probability that it will remain closed for the next one year,” Tan said.

The main advantage that Johor Baru has compared to the Klang Valley is its location next to Singapore.

He added that Johor Baru has a high number of visitors from Singapore during weekends, which helps boost its retail market.

Tan also expects the trend of foreign retailers flocking to Johor Baru’s retail market to continue for the next few years, as there are big shopping centres such as Capital 21, Mid

Valley Southkey Megamall and Toppen Shopping Centre slated to open in the city soon.

According to Tan, in 2017 alone, 71 brands from several countries entered Malaysia’s retail industry.

These include famed cheese tea “Royaltea” and Korean fried chicken “Omaya”.

After a difficult 2017, RGM’s members are hopeful business will recover in 2018, as do supermarket and hypermarket operators, who expect their businesses to register a moderate growth of 2.4% in the first three months of 2018.

Sales in the first quarter of this year (1Q18) is expected to rise 5.4%, helped by the Chinese New Year shopping.

RGM expects retail sales to rise 4.7% year-on-year this year to RM104.4 billion based on 1Q18 projections.

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