Major FMCG sales channels Malaysia Q3 2020, by market share

As of the third quarter of 2020, supermarkets held the highest market share in the fast-moving consumer goods (FMCG) retail channel in Malaysia. Offline channels are still a key part of the retail landscape in Malaysia. However, the number of online sales channels is likely to grow in the near future.

General trade operators in rural and urban areas in Malaysia

  The FMCG sales channels in Malaysia range from supermarkets, hypermarkets, minimarkets, and traditional stores to specialty retailers such as drug stores and pharmacies. More than 75 percent of Malaysia's total population live in urban areas, and larger stores such as supermarkets, hypermarkets, and department stores are mostly located in these areas. In comparison, the general trade operators are found in all cities and rural areas in Malaysia. Most general trade operators are small, family-run businesses that are an essential part of the local economy. They usually rely on consumers who need a smaller number of grocery items and other daily essentials. To protect these small operators, the government has prohibited new foreign hypermarkets in towns with less than 250,000 inhabitants. Due to this regulation, traditional stores such as wet markets are more commonly found in more rural areas than in urban areas.

Moving towards online purchase channels

  Although e-commerce takes up only three percent of the market share in the third quarter of 2020, the number of online sales channels is expected to rise accordingly with the increasing e-commerce market value in Malaysia. The e-commerce share of total retail sales is forecasted to increase fivefold in ten years. Due to the COVID-19 pandemic, Malaysian consumers have decreased their out-of-home spending. Many consumers started to purchase less in physical stores and more online. While most larger stores with higher capital can adapt faster to meet the demand for e-commerce, affordable technology and better infrastructure in smaller towns need to be developed further to enable the general trade operators to compete equally online.