The latest implementation of the Conditional Movement Control Order (CMCO) will result in more business closures as major malls reported up to 90% loss in shopping traffic to date.
Retail Group Malaysia MD Tan Hai Hsin said when the second CMCO started, the general public started to avoid crowded and enclosed places, causing a significant drop in traffic for shopping and commercial centres.
“Shopping traffic dropped by as much as 60%. Several of the popular shopping malls suffered drop in shopping traffic by as much as 90%.
“Although shopping malls remain open, Malaysian shoppers are reluctant to shop around,” he told The Malaysian Reserve (TMR).
It is a stark contrast to the implementation of the recovery phase (RMCO) in June when popular restaurants and shopping malls thrived with crowds, and food and beverage outlets welcomed their customers back, albeit in fewer numbers.
“Compared to MCO in March and the first CMCO in May, the second CMCO is killing the retail industry, especially non-essential retailers as well as entertainment and recreational operators,” he said.
Tan urges the government to introduce more effective action plans or retail shops will close in big numbers in the next two months. Small and medium enterprises (SMEs) face similar predicament, according to Centre for Market Education CEO Dr Carmelo Ferlito, stressing that the recently unveiled Budget 2021 is missing a strategy for containment recovery.
“These containment measures will be effective only if there will be a wider strategy for recovery,” he told TMR.
Ferlito noted that the budget has support for SMEs and wages for a limited time, but it is missing a strategy to relaunch the economy effectively.
“In fact, there is a lack of labourers now in the dangerous, dirty and difficult (or 3D) jobs, so we would need people to de-skill unless a strategy is in place to seriously relaunch the economy. And I did not see it.”
He said one can expect a flat GDP for the year due to the lack of coverage on the region’s strategy and international borders.
“Nothing has been mentioned on liberalising the job market against the more recent moves from the Ministry of Human Resources, which will make multinational companies leave Malaysia and foreign direct investments to go elsewhere.
“There is nothing aiming for a real economic recovery, so under the present circumstances we can at best expect a flat GDP next year and rising unemployment,” Ferlito said.
Seeing soaring numbers from a short-term injection for consumers and a rise in e-commerce, Shopee regional MD Ian Ho expressed the platform’s encouragement by the continuation of initiatives like Shop Malaysia Online and micro, small and medium enterprises e-commerce campaigns.
“These campaigns are aimed at spurring local consumption, stabilising cashflow, boosting revenue, as well as driving economic growth through e-commerce platforms,” he said.
The confidence in e-commerce is not unfounded as cashback application ShopBack Malaysia found that 84% of its respondents indicated that they have shopped online more frequently versus before the MCO.
However, Tan said while Covid-19 forced retailers to pay attention to online shopping platforms, it is not replacing the role of physical retail stores.
“This is evident when the first CMCO started as Malaysian shoppers slowly returned to their favourite retail shops.
“Since RMCO was implemented, popular retail shops became very crowded on weekends.”
He added that online shopping is not the only future for retailing, as there are many problems that come with it.
“During the pandemic, many Malaysian consumers reported bad experiences in online shopping.
“These experiences include wrong products or wrong sizes compared to what were shown in photos, fake products, online payment difficulties, long delay in delivery, troublesome to return goods, scams, fully paid and sellers going missing, which is happening every day, as well as poor customer and after-sale services.”