Budget 2011 was tabled by Prime Minister Datuk Seri Najib Razak last Friday, Oct 15.
"After talking to our members, we feel that with the import duty abolishment, the industry will achieve double digit growth," said H C Chan, president of the Malaysian Association for Shopping and Highrise Complex Management (PKKM) during a joint press conference with the Malaysian Retailer-Chains Association (MRCA) and the Malaysia Retailers Association (MRA) on Friday, Oct 22.
According to Joyce Yap, PKKM adviser and Pavilion Kuala Lumpur chief executive officer, about 90% of retailers in Pavilion have revised their sales forecast from between 5% and 8% earlier to between 10% and 12% following the Budget announcement. Yap is confident that the improved targets are achievable.
The current individual tourist spend is at 26%, compared to 35% in Singapore and 56% in Hong Kong for total tourist spend in shopping.
However, MRCA secretary general Valerie Choo is more cautious. "With the economic environment in Europe and America, we are looking at a conservative 5% to 8% growth for 2011."
However, Choo believes the move will benefit tourists, local consumers and ultimately, the country.
For MRA council member Datuk Ameer Ali Mydin, who is also the managing director of Mydin Wholesale Hyper Market, the benefits are threefold.
"First, we can now say we are a duty free country and change the perception that our goods are more expensive than countries such as Singapore. Secondly, it's a great marketing tool — and lastly, for us retailers, it saves a lot of paper work, time and manpower which translate into cost," he said.
This move, said PKKM's Chan, will also place local brands on the same playing field with foreign brands.
"Duty is imposed for two reasons — revenue and to protect the local brands. With this abolishment, local brands will have to keep up with the foreign brands," he said.
Yap added that the country produces fairly good quality products in the mid-range segment.
"Branding contributes about 30% to 50% of the price. And we have produced a few competitive global brands such as Bonia, British India, Royal Selangor Pewter and Vincci to name a few. Our local brands should concentrate on the export business, design and research in order to evolve," offered Yap.
Additionally, taking into account the lower rents, labor and operating cost in the country compared with Singapore and Hong Kong, Chan believes Malaysia goods will now be one of the cheapest in Asia.
"Wherever tourists may go, shopping is always a key components. So, with cheaper prices, we believe that we will see more tourists coming into Malaysia," said Chan.
Tourists will not be the only ones coming into Malaysia, according to Yap who shared that in the past week, two major international retailers have approached Pavilion for retail space and five more contacted them.
"This is a good sign. It shows that international retailers are watching us. I believe soon, we will see more new brands coming to Malaysia," said Yap.
Among the 300 tourism-related products are handbags, suitcases, footwear, jewellery and textile goods.
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