Shopping mall operators and retailers expect their businesses to increase up to 15 and 6 per cent respectively next year, buoyed by tax-free incentive on 300 imported goods announced in the 2011 Budget.
The Malaysian Association for Shopping and Highrise Complex Management (PPK) president H.C. Chan said its members are confident that the shopping industry will register double-digit growth by next year.
"Members previously felt the industry would register single-digit growth. With the tax abolishment, they expect double-digit expansion. The industry is looking at between 10 and 15 per cent growth for next year.
"They hope that higher FDIs (foreign direct investments) will provide a multiplier effect that will push for higher industry growth," Chan said.
He was speaking at a joint press conference with Malaysian Retailer-Chains Association (MRCA) and Malaysian Retailers Association (MRA) in Petaling Jaya, Selangor, yesterday.
Chan described the tax-waiver proposal as "bold" and "strategic" to promote Malaysia as a key shopping destination, of which shopping mall rents are one quarter of Singapore's and one eighth of Hong Kong's.
"The announcement is a breakthrough for the tourism and shopping industries. What it means is the operational costs would be much lower," he said.
PPK adviser Joyce Yap expects the retail industry to post 10 to 12 per cent growth in 2011, although retailers group MRCA only anticipates 6 per cent growth.
"Prior to this, the retail forecast was between 5 and 8 per cent. Now, more than 90 per cent of the retailers at the Pavilion, for instance, are raising their sales target to between 10 and 12 per cent.
"We are confident they can achieve that," said Yap, who is also Kuala Lumpur Pavilion Sdn Bhd chief executive officer for retail.
She expects more international brands to open outlets in Pavilion next year.
"Two international brands that we have courted for about a year are knocking on our doors. Initially, we are looking at bringing one brand in 2011 but now there are five already making contacts.
"The minimum investment they are bringing in to do the fit-out (at the Pavilion) is between RM3 million and RM5 million. It is a good size," she said.
The MRCA is bullish too, but remains cautious on the global economic scenario.
"As far as MRCA is concerned, our forecast for 2010 is still within the range of 5 to 8 per cent," its secretary general Valerie Choo said.
"For 2011, the target is slightly lower, between 5 and 6 per cent, because of the global scenario," she added.
"The proposal is a boost to consumers spending. I can say that positive consumer sentiment is back. Once consumers start spending again, the multiplier effect on the economy is very great," she added.
MRA vice-president Datuk Ameer Ali Mydin said the proposal was crucial to help businesses remain competitive and reduce costs.
It will not only benefit tourists but also the locals who can now buy branded goods at lower prices, Ameer said.
By Business Times
