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Malaysia's wholesale and retail trade plunge as online retail sales surges

KUALA LUMPUR (June 11): Malaysia's sales value of wholesale and retail trade plunged 36.6% year-on-year (y-o-y) in April 2020, which was the biggest decline in history after recording a decrease of 5.7% in March 2020, according to the Department of Statistics Malaysia.

Chief statistician of Malaysia Datuk Seri Dr Mohd Uzir Mahidin further said that in the normal business environment, it is estimated that the sales of wholesale and retail trade fell RM45 billion in April 2020.

"The steepest fall was recorded by motor vehicles which plummeted -93.2%, mostly due to precipitous drop in sales of motor vehicles of -93.7%. During MCO (Movement Control Order), car dealership centres and showrooms were not allowed to operate, thus affecting the sales of vehicles to customers," he said in a statement today.

However, it is noted that online retail sales continued to record a significant increase at 28.9% in April 2020, indicating the expansion of e-commerce activities.

Retail trade recorded a y-o-y decline of 32.4% to RM28.3 billion, as the imposition of the MCO since March 18 has resulted in negative growth for most retail activities.

"The main declines were observed in retail sales in specialist stores (-56.8%), retail sales of automotive fuel (-56.3%), retail sales of cultural & recreation goods (-53.2%) and retail sales of household equipment (-48.3%). Meanwhile, retail sale of food, beverages & tobacco recorded positive growth of 1.9% in April 2020," Uzir elaborated.

Wholesale trade also fell 26.3% y-o-y at RM37.7 billion, due to the disruption in the overall supply and demand chain domestically and globally due to Covid-19.

However, industries related to food such as wholesale of food, beverages & tobacco and wholesale of agricultural raw materials & live animals posted marginal positive growth.

Moving forward, Uzir said that the performance of wholesale and retail trade is expected to be better in May 2020 and the coming months, as the government partially lifted the nationwide lockdown by allowing most economic sectors to return to full operations beginning May 4.

"Sales are also expected to be on the rise due to delayed purchase from April 2020. This, coupled with various stimulus packages by the government to mitigate the impact of Covid-19 through financing, tax measures, cash handouts and wage subsidies, will likely increase the purchasing power of consumers, thus will boost the wholesale & retail trade sector.

"The shift in consumer behaviour towards digitalisation and more convenient methods of purchasing and payment will likely continue and will act as a catalyst for a rapid growth in retail sales," he added.

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