Competition in the retail sector is getting intense

THE retail sector in Iskandar Malaysia is in for exciting times with more investments and new players expected to enter the market in the future.

Southern region representative of the Malaysian Association for Shopping and Highrise Complex Management (PPK), Jenny Chan, said competition in the sector had become more intense in recent years.

Five new shopping complexes and hypermarkets were opened in the second half of 2008 in Iskandar Malaysia. They are Tesco Extra Plentong, Sutera Mall, Danga City Mall, Tesco Tebrau City and AEON Bukit Indah.

This year will see the opening of Ikea Tebrau City, Tesco Bukit Indah and Komtar (now undergoing upgrading works). KSL City, Hilltop Nusajaya and Ponderosa Mall@Taman Impian Emas will open in 2010.

In the pipeline are Nusajaya shopping mall and the expansion of IOI Mall II at the existing IOI Bandar Putra Kulai by IOI Properties Bhd, but the opening dates have not been decided.

“Competition is good, as it helps raise the standard in the sector and consumers too can look forward to having more choices in terms of products and pricing,” Chan said.

She said existing complexes must upgrade in terms of physical set-up and product offerings in view of more new players coming into the market.

In the past, Johor Baru was not seen as offering much choice in the retail segment; even its denizens went to Kuala Lumpur or Singapore to shop.

However, Chan disagreed that shopping was actually localised and said most of the times, residents would shop locally unless they happened to be outside their residential area.

The retail sector in Iskandar Malaysia has transformed tremendously over the past 10 years and now the denizens are spoilt for choice when it comes to retail therapy.

There are more than 25 shopping complexes and hypermarkets within Iskandar Malaysia.

The shopping complexes and hypermarkets here are popular among Singaporeans due to the strong Singapore dollar and they do not mind the daily traffic congestion at the causeway.

Soon, Iskandar Malaysia will also have the Malaysian Premium Outlet (MPO) centre, to be built on 20ha in the Asiatic Indahpura Kulaijaya township.

The project is a joint venture between Asiatic Land Development Sdn Bhd, a wholly-owned subsidiary of Asiatic Development Bhd and a member of the Genting group, and US-based Simon Property Group Inc’s division, Chelsea Property Group.

It is reported that the MPO would be Chelsea’s first premium outlet in South-East Asia, offering international branded items at discounted prices.

Chelsea Property is the world’s largest owner, developer and operator of upscale outlet centres with 38 outlets in the United States, six in Japan, and one each in South Korea and Mexico.

“Prospects for the retail sector in Iskandar Malaysia are good as the stakeholders want to transform south Johor into a retail hub in the southern region,” Chan said.

Iskandar Malaysia covers 2,216.3 sq km within the southern most part of Johor covering Johor Baru, Senai-Kulai, Gelang Patah-Pontian and Pasir Gudang-Tanjung Langsat.

Chan said suburban Johor Baru had a lot of choices in terms of shopping now, probably more than the city centre as growth was spilling over into the suburban areas.

Johor Baru is the fourth most populated city in Malaysia with a population of 876,000 (2006 census) while the district has a population of 1.73 million and the Singapore-Johor Baru conurbation 6.49 million, which is one of the highest in South-East Asia. The population growth rate is also among the highest in Malaysia.

Under the Iskandar Malaysia master plan, Johor Baru is expected to grow into a large urban area with over three million residents by 2025, second only to the Klang Valley.

“Retailers here are anticipating a slowdown this year, but PKK believes that sometimes a slowdown is an opportunity for them to re-strategise to emerge even stronger when the economy recovers,” Chan said.

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