The craze, which began in China, was introduced by e-commerce giants as the Singles’ Day sales
pic by BLOOMBERG
THE 11.11 sales on Monday will definitely attract a lot of interest among shoppers with various e-commerce platforms aggressively promoting the event. The craze, which began in China, was introduced by e-commerce giants as the Singles’ Day sales.
Now, local e-commerce platforms like Lazada Malaysia and Shopee Malaysia have replicated the event by offering big discounts, exclusive privileges, cash backs and prizes to draw in the public.
The growth of the digital economy has made such shopping events ever popular with even cheaper options. For manufacturers, e-commerce has provided a platform to scale up market reach and sales. Shopee claims to have 11 million orders on the same day last year, up some 2,400% from 2016 when it launched its maiden 11.11 sale day.
With thousands of products on offer from across the world and the convenience each transaction can be done, it’s not surprising why bricks-and-mortar retailers are having a hard time attracting footfalls to their establishments.
The performance of the e-commerce platforms will give some indication of the financial health and appetite of the consumers in the country.
As it is, Bank Negara Malaysia (BNM) is quite confident that the Malaysian economy has the legs to sustain the pace of growth within the forecast range despite external headwinds.
It has kept the Overnight Policy Rate unchanged at 3%, which means any rate action will only take place next year driven by what transpires over the next quarter at least.
In its carefully crafted statement, the central bank said the country’s economic growth rate would be within expectations this year and the momentum sustained into 2020, barring a deterioration in the external environment and a weaker commodity sector cycle.
Economic growth is expected to remain anchored by firm private sector expenditure, while private investment is projected to remain modest and household spending supported by continued employment and wage growth.
The bank said the monetary policy stance would remain conducive to sustain growth amid price stability.
While BNM has taken a hold position since May, other central banks have been quick to cut — with the Bank of Thailand being the latest to slash its benchmark policy rate by 25 basis points for the second time to a record low of 1.25% this week.
The US Federal Reserve has slashed its policy rate by three times this year to support the growth momentum amid the ongoing trade tension with China.
The rate cuts tend to have an impact after lagged period, but the cheaper money will benefit some much faster.
The low interest rates and accommodative monetary policy stance will likely rekindle investors’ appetite for assets, which means it will benefit the wealthier segments of society, at least in the short term, given that asset holdings are usually concentrated with the wealthier households.
The local market has seen about RM360 million in inflows in the past two weeks according to MIDF Research and judging from the 16 points rise this week so far, the figure is set to rise.
Hopefully, this wealth effect will in turn, encourage shoppers’ confidence to spend and help make this 11.11 a record year for the e-commerce platforms and benefit the wider economy.
Bhupinder Singh is the corporate desk editor of The Malaysian Reserve.