Foreign e-commerce threat for retailers in Malaysia?
By Karamjit Singh December 3, 2012
- Big difference in pricing of US and European branded clothing when shopping online at US sites vs Malaysian outlets
- As US-only shopping sites start opening up to international markets, physical outlets here may be affected
I HAVE a confession to make. Over the past five years, I have spent way more money buying branded personal items from the United States than I have in Malaysia. I have been an avid Black Friday-Cyber Weekend shopper since 2008 when I got myself a 4MB broadband line. I am now on UniFI.
That was important because it made the experience of surfing image-heavy sites a breeze. All of a sudden, the world of online shopping beckoned and, boy, is it an enticing world!
There is a caveat to my online shopping though. I have a sister who lives in the United States, and I have her buy what I want and she brings them during her yearly trips back to Malaysia. I save on shipping costs and have access to many sites which only allow online shopping from the United States.
And also, with the no-questions asked return policy of US retailers, I just send back anything I don’t like. So, again, mine is a unique situation.
Well, maybe not so unique. “It seems like all Brazilians with family in the US shop online during the Black Friday weekend,” laughed an American I met last year who is married to a Brazilian. His suitcases on his trips to Brazil are always filled with items his family there have bought from US online sites. Brazilians too feel shopping in the US is much cheaper.
But now some of the sites that previously restricted online sales to the United States have started shipping internationally. One of the leading retail stores now actually changes its prices into the local country currency. And it ships to Singapore.
What will the impact of this be on our retailers of branded goods? Not only are the prices in the United States eye-popping, so is the selection.
But pricing is the obvious draw. That first year I started shopping, in 2008, I picked up six Ralph Lauren dress shirts at one go. For the same price, I only would have gotten one and a half shirts in Kuala Lumpur!
That’s why I say eye-popping prices. And mind you, the exchange rate is even more in our favor today.
Seeing how most of the items I buy (clothes, belts, shoes, socks, etc.) come with Made-in-China labels, it is a source of frustration that our merchants charge an arm and a leg for them in Malaysia while they are so affordable in the United States.
Even taking into account that the US population is 11 times larger than the Malaysian and that its 2011 Gross Domestic Product (GDP) Per Capita of US$48,442 is five times Malaysia’s at US$9,656 (according to the World Bank), the large price differential in branded clothes versus income still does not make sense to me.
But with the freedom to shop where I want, I have taken my business elsewhere. And it is a no-brainer with at least 50% cost savings. For Malaysian retailers of US and European branded clothing, this price differential will surely be a cause of concern, if not now, then eventually. And it they don’t react correctly, they could be in trouble.
Unless of course I am wrong and one of the main attractions of buying branded goods is the pride buyers get from leisurely walking the malls with their branded shopping bags.
How many of you readers out there buy stuff online from the United States and what is your experience like?
Malaysians increasingly prefer online shopping to mall visits
Are Malaysians ready for e-commerce?