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Post-MCO: Which INDUSTRIES Are Winning or Losing in M'sia?

BY Faiz Rahim

Updated 23 Jul 2020

As we move forward with conditional MCO, we are left to wonder what is the “new normal”. There are businesses that are making the best out of a global pandemic while others struggling to the point of retrenchment and closing down. It’s a hard time for us all.

On 1st May, our Prime Minister said the country rugi RM2.4 billion per day sewaktu MCO making the total of losses are at least RM63 billion. If prolonged for another month, we will hilang another RM35 billion. That’s a lot of money, let that sink in for a moment.

As we restart the economy, knowing which industries that will be doing good post-MCO would help immensely to look at which sector should we spend more our money to further stimulate domestic economy and all that jazz. With that, we will take a deeper dive to see what industries are expected to be doing quite well and doesn’t post MCO k?

What's covered in this article?

The Winners

1. E-Commerce

Online shopping has become the norm as people choose to stay home and only go out whenever necessary. As reported by Digital News Asia, The Commerce.Asia saw a surge of 149% year-on-year Gross Merchandise Volume (GMV) growth in the first quarter. The company asked around its merchants and found out there has been over 800% sales increase in cooking appliances, undergarments and latex gloves. This proves that the e-commerce industry is resilient to sustain current circumstances. It’s just a matter of are they digitally and logistically ready?


2. E-Wallet

Cashless delivery has been the buzzword these days. As the riders go around and about, it is a safer option especially to minimize daily contacts. Although there’s a decline in a retail transaction, Touch ‘n Go sees healthy volumes for essential services and online-based transactions. GrabPay Malaysia’s online transaction also has increased 1.7 times than before. Simply put, more people are putting e-wallets to good use.


3. Logistic/Delivery provider

The request for parcel deliveries via Pos Laju has increased more than 35%. It used to receive over 350,000 parcels daily and now it has reached over 730,00. The overhaul of pending deliveries has made Pos Laju tak cukup tangan and in need to hire new employees ASAP. Looking at the current buying behaviour, we can assume that it’s also happening to other logistic providers.


4. Streaming service provider

In the study by the Malaysian Digital Association with its partner SimilarWeb, there has been a mass migration of Malaysians to online services. With more time to spare, there has been never a perfect time to chill! The study shows Netflix has gained 195% in year-on-year growth in traffic in the middle of March. It also noted that visits to Tonton jumped 232% in sequential traffic, while dimsum and Viu increased by 140%. 


5. Pharmaceutical

Everyone has been buying disposable face masks and hand sanitizer since the outbreak. Early on, many pharmaceutical companies are at their limit due to the massive demands. As we settling into a new normal, the demands for pharmaceutical products are expected to remain high.  


The Losers

1. Tourism

Expected to rugi over RM3 billion in February, the tourism industry will be hit the hardest. A big part of the industry are hoteliers which 30% of them face temporary or permanent closure.

In the past few weeks, several hotels have decided to close down permanently citing similar reasons such as low occupancy rates, massive losses even before the pandemic hits and many others. The following months would be detrimental for the industry to sustain or they would, unfortunately, succumb.


2. Airlines

With no flights in and out during the MCO, the International Air Transport Association reported that Malaysia will see passenger demand reduced by 39% thus losses in revenue reaching RM14.4 billion in just three months. 

Although suffering a great loss, with CMCO, we can now fly domestically and internationally obviously with approvals from the authorities. With immense supports from the government, the industry will moderately be picking up the losses as time goes.  


3. Media 

Traditional media has been suffering quite some time but it seems to be the last straw for the largest magazine publisher Blu Inc Media as it ceased its entire operations. It is a massive shock as it holds over 10 titles and has been operating for almost four decades. With falling revenues, declining subscriptions and advertisements, one can only hope how long any media organization can last.


4. Retail 

It is not a shock that the retail industry is declining during the MCO as it is expected to suffer a negative growth rate for the first time in 22 years. Retail Group Malaysia estimated that retail sales in Malaysia to see growth rates of -18.8% and -9.3% in the first and second quarter of the year. In comparison to last year, the industry is projected to suffer a decline in sales by -5.5%. With the CMCO, the industry expects a slow recovery in the next three to six months.


5. Housing 

According to PropertyGuru, the real estate market is expected to see a minimum price adjustment of 10%. It is due to the market will shift to a buyer’s market from a seller’s market. Fortunately, Malaysia will not see a reduction of less than 50%. However, it is highly unlikely for some people to buy property this year due to the unstable economy.


So, what does that mean?

Although some industries are showing some improvements, nothing sets in stones as of yet. The MCO might make a comeback (hopefully not) which means there could be another wave. What all of us can do now is to continue supporting the domestic economy (as we should!) while staying safe.

Regardless, it’s going to be a long road ahead of us and the businesses to fully win the fight against Covid-19. Read here to learn how the pandemic will affect the country’s income.

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About the Author

Faiz Rahim


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