Malaysia: A Market with a Growing Demand (Part-2)

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In the latest Export Connect online forum series, we collaborated with Food and Fibre Gippsland, Shyan Trading, Global Victoria and AUSVEG to deliver an online forum on the Malaysian export market. In this final instalment of a two-parter blog, we share the key retailing and channel trends observed by our in-market specialists and buyer panel.

Malaysia may not have been at the top of the pile for many exporters in the past, but with a customer base that is growing and changing, it is one many are starting to think seriously about. Like many Asian countries, the urban population is growing, the middle class is expanding, and expectancy and education is also on the increase. With these changes comes a demand for more international products as well as health and lifestyle based products. 

For exporters, there is some excellent news when dealing with Malaysia. The country is an open economy with over 50 bilateral investment treaties and over 20 treaties with investment provisions. For ease of doing business, the nation sits relatively high compared to the world and has trade partners with Australia, New Zealand, Canada, the USA, Japan, Hong Kong, South Korea, India, Chile, Mexico, Vietnam and Indonesia, to name a few. 

In the latest Export Connect Webinar series, we collaborated with Food and Fibre Gippsland, Shyan Trading, Global Victoria and AUSVEG to deliver a webinar on the Malaysian export market. 

Retailing and Channel Trends 

There is one rather interesting point about Malaysia, where they seem to be beating many countries around the world – coming out of the pandemic, and foodservice is expected to pick up over the next five years. Unlike many other countries where it is expected to take some time, COVID has seen several “cloud” restaurants start-up, where restaurants have been able to share cooking space to keep their businesses going. These foodservice businesses have started partnering with more delivery services, which has allowed them to continue growing. 

The Malaysian foodservice channel is dominated by Asian cuisine, both in casual and fine dining; however, there is an increase in plant-based, organic and low-calorie menus that fit in with that growth towards healthier food options. Again, this opens up another opportunity for exporters to supply products to both quick service and full-service restaurants. 

Rebecca Hall, Commissioner for South-East Asian with Global Victoria, notes that movement control orders are changing how people access food, what they are eating, how they are preparing it and the types of food they are trying. She also notes that those exporters who already had products on the shelf in Malaysia have been able to move to e-commerce with relative ease. 

There has been a small amount of growth in the last five years when it comes to grocery retailing. However, that is expected to increase in the next five. In the past, hypermarkets have had a greater share of grocery retailing, but with COVID has come the need for hypermarkets to downsize or restructure, while consumers are preferring to shop at premium grocery stores, as well as convenience and grocery e-tailers. 

Fresh produce and the availability of international products are pushing the growth in supermarkets. Consumers who have the income to spend are going to supermarkets with a larger international range. On the flip side, however, is that consumers with lower incomes are still trending towards buying local products. 

It is interesting to note that both Ms Hall and Mr Lim note that they would encourage exporters of fresh, organic, and quality assured products to be looking at the Malaysian market. Australian products are held in high regard, and Mr Lim notes that despite there often being a higher price tag on the Australian product, shelves are often empty – consumers are looking for that quality and providence over low cost. 

Malaysia certainly has plenty of potential for Australian exporters, and with the growth of the middle class demanding more imported products and fresh products, it’s worth spending the time doing research now to break into the market. 

This is the end of the second part of a two-parter insights series. We hope you’ve found this overview of our recent online forum on the Malaysia market helpful. As always, if you’ve got any questions or want to discuss export opportunities for your company, feel free to drop us a line at Export Connect – we’d love to hear from you.