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Quarterly revenue improved by 1% from previous year.

Positive expectations for remainder of 2018

7-Eleven Malaysia reported third quarter earnings of MYR568.5m, driven by its increased store network, a higher average spend from shoppers and targeted promotion activities. The improvement in sales revenues also boosted net profits by 4.1% to MYR16.8m.

Moving into the end of the year, the retailer foresees a sustained momentum and expects trading as well as gross margins to improve further. This will be achieved through a focussed execution of key strategies.  

It is targeting to boost sales of private label products by increasing the range and assortment. The other focus for 7-Eleven is developing its fresh food category as well as rationalising its existing product portfolio to maintain a profitable product mix.

Colin Harvey, CEO 7-Eleven Malaysia said, “We expect to see further improvements in the next quarter by pursuing our core strategy pillars of operations excellence, cost management and commercial innovation. I look forward to the challenges ahead in ensuring that 7-Eleven Malaysia remains the customers first choice convenience store.”

 

Find out more information Seven & i Holdings here.

 

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Government shows support for traditional trade.

Hypermarkets will not be allowed in some parts of the country

The Malaysian government has stated that it will not permit hypermarkets to operate in certain areas of the country. The announcement is intended to support the traditional channel, also known as kedai runcit, and to allow them to continue operations.

The minister of Domestic Trade and Consumer Affairs, Datuk Seri Saifuddin Nasution Ismail said, “The hypermarkets really want the government to lift the restrictions, so they can also operate in the interior areas. We will not allow that because it will affect the small retail industry.”

Although the minister acknowledged that hypermarkets have the advantage of cheaper products, he also said that the government had to weigh the overall situation and the impact hypermarkets may have on these smaller sundry stores.

If they allow them to go to the fringe areas, it would benefit the consumers, but the result will be that the sundry shops will die off, so we have to weigh the situation,” he said.

 

Find out more about the Malaysian grocery retail market here.

 

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We have seen several retailers across Asia launch their own e-wallets recently, including AEON in Malaysia, and FamilyMart and Carrefour in Taiwan.

AEON launches its own e-wallet

Earlier this year, AEON introduced its e-wallet app. Available to download on Google Play and Apple App store, AEON's e-wallet allows shoppers to pay and earn points at participating AEON stores (AEON Big Hypermarkets, AEON MaxValu Prime and AEON Wellness) seamlessly. Users can pay by scanning the QR code at the point of sale and earn points for credit when making purchases with the app.

Users just need to add their credit card to the e-wallet and will then be able to monitor their balance and transaction history real-time. The app has a biometric login feature and multi-factor authentication to help reassure users any concerns about security.

AEON Asia Sdn Bhd.'s Managing Director, Shinobu Washizawa, said, "We realise that there is an increase in the use of mobile payments, thus the AEON e-wallet will not only provide our customers with convenience, but also a safe and secure payment system [...]."

Last year, the retailer announced plans to invest JPY500bn (US$4.4bn) in online operations over the next three years. It posted a robust set of H1 results earlier this month.

Other epayment solutions in Asia

The introduction of mobile payment services in Taiwan has been relatively slow despite high smartphone penetration. Many shoppers still prefer to purchase online and collect and pay in cash in-store. However, retailers are beginning to invest in more digital solutions, for example, FamilyMart (My FamiPay) and Carrefour (Carrefour Pay) have recently launched their own e-wallets in Taiwan. The latter allows users to add up to five credit cards in one app. Two of the most well-known epayment solutions in Asia are Alipay and WeChat pay.

Partnership with BingoBox, a well-known Chinese unstaffed store operator.

Two stores opened as trial

Following on from recent trials in Indonesia and India, the unmanned store has now entered the Malaysian market. A Malaysian startup, Scientific Retail Sdn. Bhd., has partnered with e-wallet provider Boost and BingoBox, who runs over 400 unmanned stores in China.

The innovative convenience store can be found in two locations – at Bukit Ceylon and the Shell Select at Jalan Tun Razak, Kuala Lumpur. If successful, Shell Malaysia is ready to roll out a similar concept to 300 more stations. In addition, Scientific Retail is expecting to transfer this technology to help 500 small retailers grow its business by the end of 2019.

A seamless shopping experience

The technology is relatively simple: download the BingoBox app and scan a QR code to enter the store; after selecting your items, an automatic checkout counter will total up your purchases and charge your credit card or your Boost e-wallet. BingoBox promises a retail experience that can be completed in under one minute.

Shairan Huzani Husain, Managing Director of Shell Malaysia Trading Sdn Bhd said, “We are proud to be the first in the industry to provide this innovation to our Shell customers. Our mission is to make life’s journey better for our customers and we believe that Shell Select powered by BingoBox Retail Technology will do exactly that.”

 

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This in-depth guide to Malaysia explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

Five year growth forecasts for the grocery market, the leading retailers and modern trade grocery channels in Malaysia+.

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