This is the second year in a row that Malaysia is in third place in the survey. China is placed first with India in second spot.
Kearney said in a statement that retail sales in Malaysia grew by 3.8% in 2016, driven in large part by a 6.1% increase in private consumption.
Retail sales are being boosted by a healthy tourism sector. It noted that the number of tourists is projected to grow from 26 million in 2016 to 36 million by 2020.
More Chinese travellers are expected to come to Malaysia, as they have been granted visa-free entry since March 2016.
Malaysia’s online retail was expected to grow at 23% per year through 2021, driven by electronics and media, said Kearney..
It said Malaysia’s high ranking was driven by an influx of tourists, higher disposable income and government investments in infrastructure. All, this it added, provided a boost to the retail industry, according to a report in The Edge.
“Malaysia’s retail market continued to grow despite a slight dip in overall gross domestic product growth and short-term pressures of currency fluctuation and inflation. The long-term prospects of the sector continue to remain strong,” The Edge quoted it as saying yesterday.
The statement said the GRDI, now in its 16th edition, analysed 25 macroeconomic and retail-specific variables.
“Malaysia’s successful performance in this year’s index is consistent with the increased interest foreign retailers are showing in this market, in both traditional and online channels.
“Aggressive moves are being made into the convenience segment by companies such as Japanese retailer Aeon Co (M) Bhd, which is set to triple its number of stores in Malaysia to 150 within the next three years,” said Kearney partner and head of Southeast Asia, Soon Ghee Chua.
Soon said FamilyMart Malaysia planned to open 1,000 stores by 2025. The 7-Eleven chain, too, plans to expand.
“Guardian opened its first concept store in Kuala Lumpur City Centre in November 2016 and it plans to open 30 more stores and refurbish 70 stores this year,” The Edge quoted Soon as saying.
He added: “The growth in online retail, along with the rise in mobile phone adoption across the nation, will continue to provide momentum to the sector’s growth and attract further investment.”