Online biz thriving but physical stores here to stay

Many job opportunities for IT-related service providers created


THE significant success seen in the e-commerce sector this year is attributed to shorter delivery time and businesses adapting to online transactions.

According to the Malaysian Retail Chain Association (MRCA), many retailers invested money and energy to improve their online presence via websites, social media content and e-commerce platforms.

In turn, many job opportunities for information technology (IT)-related service providers were created.

“It has not been an easy transition for most retailers that were not already on board with any e-commerce platform due to the abrupt change in the business model.

“Even for retailers with an e-commerce setup, it was a steep learning curve as the contribution from e-commerce, which grew significantly during this pandemic, did not make up for the loss of sales from the conventional brick-and-mortar stores,” the council told The Malaysian Reserve (TMR).

Retailers had to implement aggressive marketing strategies both online and offline to clear any excess inventory.

Non-perishable goods retailers and food and beverage operators find it easier to jump into e-commerce due to the reliability of the logistics infrastructure.

However, it was more difficult for retailers selling perishable goods such as temperature-sensitive products since not all logistic providers are capable of maintaining the cold chain.

“On the other hand, fashion retailers may have difficulty convincing shoppers to buy clothes or shoes without being able to try them on first.

“Suffice to say each retail segment comes with its own fair share of challenges,” it added.

While e-commerce provides value-for-money and convenient shopping experience, MRCA believes that most consumers would still prefer shopping in brick-and-mortar stores.

“Experiential retail remains relevant for consumers as shoppers seek unique shopping experiences in-store.

“This is evident with the surge in sales of physical stores when economic restrictions were lifted,” it added.

MRCA hopes that next year, they would observe a higher number of integration between retail and e-commerce through the online-to-offline model.

The council is confident that retailers would be able to target the right market with the right offering with the right price, with better data analytics.

“Ultimately, e-commerce allows businesses to gain a greater understanding of the customer’s needs and requirements,” said MRCA.

This year was not a great year overall due to the Covid-19 pandemic worldwide and political turmoil within the country.

To make matters worse, as the country heads towards recovery, it ended up encountering one of the worst flood crises Malaysians had experienced.

“For businesses whose distribution centres or warehouses are affected, this could potentially set off a supply chain crisis which may take some time to resolve depending on the manufacturer’s lead time and extent of repair required to the existing facilities,” MRCA told TMR.

Meanwhile, e-commerce platform Shopee has recorded an increase in the number of micro, small and medium enterprises (MSMEs) embracing online business.

This was in response to the growing reliance of customers towards e-commerce and digital payments, and many local businesses are able to fast-track their e-commerce growth by jumpstarting on the platform.

This year, Shopee observed 80 local sellers who recently hopped onboard and managed to achieve more than RM1 million in sales in just their first year on the platform.

Shopee COO Terence Pang said 2021 has been another year of Malaysians adapting to the pandemic.

He believes that it is now more important than ever for businesses to embrace digitalisation and reach out to more online-dominated customers.

“This year, we saw more local traders and sellers either taking their first step online or continuing their journey with us.

“Our sellers’ achievements is also a testament of e-commerce’s ability to create inclusive and sustainable livelihoods amid a challenging business landscape,” Pang added.

Similarly, according to the Alibaba Group 2021 Investor Day Key Takeaways, the Chinese multinational technology company managed to garner 1.24 billion global annual active consumers.

It continued to expand across SouthEast Asia and build a solid global logistics infrastructure where its subsidiary Lazada managed to grow across its six markets. In turn, it successfully generated 80% of consumers within 18 months to 130 million.

“We are devoted to serving more than 300 million consumers and achieving a gross merchandise value of USD$100 billion (RM418.53 billion) per year,” Lazada group CEO Li Chun said in a statement.

On the other hand, Alibaba Group Holding Ltd’s logistic company Cainiao Smart Logistics Network has continued to enhance its infrastructure to ensure cross-border delivery is fast and cost-effective despite the Covid-19 pandemic’s restriction on logistics.

Cainiao CEO Wan Lin said its international revenue managed to grow by 40% in the first half of its fiscal year.

“We see globalisation as a critical part of Alibaba’s strategy and Cainiao’s strategy alike,” he added.