Retail goes cashless but overhang still a sticky point

Remain vibrant: Specialty malls are mainly located in the Klang Valley and buyers and traders from around the country come to these wholesale sites to buy in bulk in order to supply to retailers in other parts of the Malaysia.

PETALING JAYA: The retail sector enters 2020 with the long-unresolved issue of an oversupply of mall space but with much excitement about going cashless.

Retail mall owners and retailers are working with e-wallet providers to enable shoppers to opt for cashless transactions, retail consultancy Henry Butcher Retail said.

“All Sunway malls in Malaysia offer this cashless facility. We expect more retailers to offer e-wallet payment facility in the near future, ” said managing director Tan Hai Hsin.

He said malls are also increasingly offering credit card payment option for car parking. Autopay machines, which previously accept cash only, today also accept Touch n Go cards. A few of them also accept Visa and Mastercard credit cards. Plaza Sungei Wang is an example, said Tan.

Tan: Going cashless in a mall is just a matter of time in Malaysia.Tan: Going cashless in a mall is just a matter of time in Malaysia.

“Therefore, going cashless in a mall is just a matter of time in Malaysia, ” he said. In many modern malls in US cities, shoppers do not need a single cash note or coin to shop even at kiosks, dine in the food court and for car parking facilities.

Tan expects the acceptance level of e-wallet payment system in Malaysia to be high, going forward. He gives his reasons for this:

> a bank account is not needed, at least for some e-wallet providers. This appeals to the young, particularly teenagers

> a credit card account is not needed for many e-wallet providers

> the entry cost and maintenance fee for e-wallet is low, or none at all, compared with a credit card.

Going further into demographics, Tan said there are many retirees and elderly who do not qualify for credit cards. They do not want to carry cash and the e-wallet system is an option for them.

“Eventually, the e-wallet payment system will become another channel of payment, ” he said.

As for the supply of malls in the Klang Valley, Tan said the weak purchasing power has exacerbated the oversupply situation.

The glut is obvious in the Damansara area, between the Taman Tun Dr Ismail and the Bandar Sri Damansara stretch.

Within this vicinity are 3 Damansara, Glo Damansara, Seventeen Mall, Atria Shopping Gallery, The Starling, Centrepoint Bandar Utama, One Utama, Tropics Shopping Centre, Paradigm PJ, the Curve where Ikano Power Centre, Tesco Mutiara are located and Empire City Mall which is yet to open.

This situation in Damansara has affected retail centres in Petaling Jaya like Jaya Shopping Centre, Jaya One, Jaya33, Centrestage, Pacific Star in Section 13 and Pinnacle Mall which is across the road from Asia Jaya LRT station, he said.

On how to resolve the situation, Tan said there has to be a change in the trade and tenant mix for the Klang Valley malls – smaller grocery stores instead of hypermarkets and recreational components like swimming school and rock-climbing activities.

“Retail trades like art galleries, home furnishings, barber shops and property galleries are going into malls. Co-working space and medical and beauty wellness services are also entering malls, ” he said.

Tan said some malls also offered an education component.

He said mall managers are also engaging social media to market their malls.

According to Tan, the retail scene can be broadly divided between the regular malls and specialty malls. While shoppers are familiar with the regular malls and certain specialty malls like Low Yat Plaza, Plaza Imbi and the Digital Mall in Section 14, Petaling Jaya which offer information, communication and technology (ICT) goods and services, there are also other types of specialty malls which cater to bulk wholesale purchasers.

Known as wholesale malls, they include Kenanga Wholesale City which focuses on fast fashion and GM Plaza and GM Klang which offer bags, apparels and accessories on a bulk basis.

Tan said specialty malls are mainly located in the Klang Valley and buyers and traders from around the country came to these wholesale sites to buy in bulk in order to supply to retailers in other parts of the Malaysia. The sizes of these outlets vary and can be as small as 200 sq ft or less.

A visit to GM Plaza in the Chow Kit area and Kenanga Wholesale City in Pudu, both in Kuala Lumpur, is an educational experience itself. The term “slowdown” seems alien in GM Plaza.

While regular malls are changing their tenant and trade mix by putting in as many components as possible to give the everything-under-one-roof effect, specialty malls, however, devoted more than 60% of their space to a specific category of goods or services, said Tan.

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