logo
‘Treasure hunting' shoppers propel dizzying rise of Malaysia's dollar stores as inflation bites

‘Treasure hunting' shoppers propel dizzying rise of Malaysia's dollar stores as inflation bites

CNA30-05-2025
KUALA LUMPUR: In the leaner days leading up to her payday each month, supermarket cashier Azura Hanib turns to her local Eco-Shop in Selayang, Selangor, for everyday items such as dishwashing liquid.
At the budget-friendly chain store, most items, from biscuits to baby wipes, retail for RM2.60 (US$0.61), allowing Azura to stretch her dollar.
'Being able to buy things in small quantities – dish wash, a few exercise books – makes some difference," Azura, 44, told CNA while shopping with her 13-year-old daughter.
"With how difficult life is, you really have to be mindful of every single cent," added the mother of four children aged 10 to 20.
Since 2003 when it was started by businessman Lee Kar Whatt, his brother and two other people, Eco-Shop has expanded to over 350 stores across the country by catering to budget-conscious consumers.
It became Malaysia's biggest initial public offering (IPO) so far this year on May 23, listing on the Main Market of Bursa Malaysia. It ended its first day of trading at RM1.20, above the IPO price of 1.13 per share, making its founder Lee a billionaire.
The successful IPO highlighted the strength and potential of a business model offering consumers affordability amid economic uncertainty, analysts said.
"Because everybody wants to save money, dollar stores are generally seen as recession-proof. That's where people go, especially those in the low-income (B40) and some in the middle-income (M40) bracket," said Vincent Lau, equities broker Rakuten Trade's head of equity sales.
CNA takes a closer look at the rise of value chain stores in Malaysia and elsewhere, as well as what could curb their growth.
RISE OF DOLLAR STORES IN MALAYSIA
Starting with one RM2 store in the town of Gemas in Negeri Sembilan, Eco-Shop has grown to become Malaysia's leading dollar store chain and currently has 358 outlets across the country.
In its prospectus, it said it plans to add an average of 70 new stores annually for the next five years.
The company is worth about RM6.67 billion after its listing.
The vast majority of its more than 10,000 items each cost RM2.60 in Peninsular Malaysia and RM2.80 in East Malaysia.
Eco-Shop has also launched 22 Eco-Plus format stores featuring a wider range of products at various prices.
Its net profit has risen from RM27.09 million in 2022, to RM105.07 million in 2023 and RM177.28 million last year.
While Eco-Shop is the biggest dollar store player in Malaysia and commands almost 70 per cent market share, there are several other players such as Ninso and Eko Jimat.
Ninso originated in Kluang, Johor in 2017, and now has 99 outlets across the country.
Eko Jimat has 72 stores, while Japanese chain Daiso, whose items are mostly RM5.90 each, has 70 stores. NT Shop has 36 stores, while Setia has 34 stores.
Predominantly located on individual shoplots, some of these stores have also set up in malls.
According to a market research report by consulting firm Frost & Sullivan for Eco-Shop's IPO, the dollar store-based retail segment in Malaysia has experienced significant sales growth from around RM1 billion in 2016 to RM4 billion in 2024.
While their popularity may not be surprising to some, others have found it remarkable.
"I'm actually quite surprised at how big the dollar store trend has gotten,' said Mydin Hypermarket founder and managing director Ameer Ali Mydin, who has 70 branches in Malaysia.
With the ringgit weakening over the years and one American dollar now equivalent to RM4.25, 'you kind of think, 'What can you really buy for RM2.60?', Ameer said.
'But they seem to have enough things to keep people coming back," he said, adding that he does not intend to enter the fray as he did not want to spread his business thinly.
A walk through the Eco-Shop and Ninso branches in Selayang reveals no shortage of items ranging from the practical to the whimsical at the RM2.60 price point.
Besides plastic containers, file covers, a pack of 80 baby wipes, 500ml hand wash, shampoo, flower pots and tools such as spanners and sets of allen-keys, there are also toys and capybara-themed hairbands.
The shops also sell food items such as biscuits, chocolates and snacks.
Frost & Sullivan's report indicated further growth potential, noting that as of last year, the sector in Malaysia had a penetration rate of 23 stores per million population.
The rate is low compared to more mature markets such as Japan, which has 87 stores per million population, the United States with 119 stores per million population, and Canada with 127 stores per million population.
The report estimated that the penetration rate of dollar stores within Malaysia is 1.5 per cent of the sales value of the store-based retail sector.
Sales in Malaysia's dollar store industry are projected to reach RM7.8 billion by the end of 2029, it stated, up 95 per cent from 2024's RM4 billion.
'These stores have proven to be recession-proof, offering affordable options during economic downturns and high inflation rates,' Frost & Sullivan wrote.
'By providing a range of homogeneous goods at fixed prices, dollar stores attract new customers who would typically shop at higher-priced retailers, especially during times of economic uncertainty,' it said.
The concept also exists in other Southeast Asian nations like Singapore, with stores such as Valu$, and Thailand where there are 20-baht shops.
In Japan, meanwhile, 100-yen shops have become a fixture in the retail landscape.
Eco-Shop's chief executive Jessica Ng told CNA that the fixed-price retail model has gained global traction, particularly during periods of economic uncertainty.
'In Malaysia, we have seen growing demand for value-retailing, driven by rising cost-of-living concerns and increasing consumer awareness of smart spending,' she said via email.
'Notably, value retail has become more mainstream, attracting not just lower-income shoppers but also middle-income households looking for everyday essentials at affordable prices,' she said.
Eco-Shop's business model tends to be countercyclical – during inflationary periods or economic slowdowns, consumers become more price-sensitive, which tends to drive more traffic to fixed-price retailers, she added.
HOW ARE DOLLAR STORES ABLE TO SELL SO CHEAP?
What is the secret behind these dollar stores' ability to sell products relatively cheaply?
Economist Yeah Kim Leng, while surprised at the variety of items on sale for less than the price of a coffee, attributed it to the bulk purchasing ability of dollar stores.
Ng of Eco-Shop said its business model is built on high volume and scale – products are bought in bulk, so the company is able to sell them cheaply.
The fixed-price model boils down to scale, efficiency and strategic sourcing, she said.
'Our sourcing strategy is very deliberate. We've built strong, long-term relationships with suppliers from Malaysia and different parts of the world,' she said.
'Over the years, we've also established direct factory relationships, which helps us get better pricing and avoid middleman costs.'
Dollar stores are not immune to price pressures and other challenges, however. Just last month, Eco-Shop and Ninso hiked their prices from RM2.40 to RM2.60.
According to analyst reports, such stores are also labour-intensive and dependent on both foreign labour and suppliers.
Ng said key challenges range from managing rising costs from supply chain disruptions and foreign exchange fluctuations, to higher freight and logistics expenses.
Its draw lies not only in affordability, but also variety, Ng added. Which is why each Eco-Shop outlet offers 5,000 to 11,000 items.
'Whether it's homeware, personal care, snacks, or stationery, we make it a point to keep our product assortment fresh and relevant so that every trip to the store feels like there's something new to discover,' she said.
While Yeah noted there is competition from other brick-and-mortar stores as well as the global online marketplace – Chinese e-commerce giant Taobao launched a Malay-language interface that automates translation across the platform this week, for instance – dollar stores enable customers to 'have a feel' of the items on offer.
'That is why these stores can do well,' he said.
And while customers appreciate the affordability and range of items at value stores, some are mindful of impulse purchases while others say they would visit other shops and pay more for certain items.
Mary Agnes, 50, from Batu Caves, told CNA nearly half of her purchases from monthly visits to Eco-Shop are unintended – a behaviour Frost & Sullivan's report terms 'treasure hunting'.
'The perception of getting a good deal can drive impulse buys, even for things people might not need,' Mary acknowledged.
Mechanic Hazri Mukeri, 45, who is from Selayang, said that while stores such as Ninso and Eco-Shop are useful for small items such as plastic containers, he would be pickier when it comes to tools needed for work.
'Of course, you can purchase some things such as cable ties (here) but when it comes to tools such as spanners, the items sold would not last as long as those pricier products found in proper hardware stores, for example,' he said.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

SIA Engineering's Q1 FY2025 profit jumps 29.2% to S$42.9M amid rising MRO demand and flight volumes
SIA Engineering's Q1 FY2025 profit jumps 29.2% to S$42.9M amid rising MRO demand and flight volumes

Independent Singapore

time2 hours ago

  • Independent Singapore

SIA Engineering's Q1 FY2025 profit jumps 29.2% to S$42.9M amid rising MRO demand and flight volumes

FB screengrab/ Singapore Airlines SINGAPORE: SIA Engineering Company (SIAEC) reported a 29.2% year-on-year (YoY) increase in net profit to S$42.9 million for the quarter ended June 30, 2025, thanks to continued higher demand for the company's maintenance, repair and overhaul (MRO) services and flight volumes in its line maintenance network. The company noted that it handled 3.5% more flights in Singapore during the quarter compared to a year ago. The Edge Singapore reported revenue for the first quarter of FY2025 was at S$358.4 million, up 33.4% from the same period last year, outpacing the group's total expenditure, which climbed 32% YoY to S$353.3 million amid higher material and manpower costs. As a result, SIAEC achieved an operating profit of S$5.1 million—S$4.1 million more than the previous year. The group's share of profit from its associated and joint venture companies rose to S$37.8 million for the quarter, marking a 35% increase compared to the same period last year. The engine and component segment added S$9.5 million to profits, while the airframe and line maintenance segment contributed S$0.3 million. The company said aircraft maintenance check volumes at its Base Maintenance in Singapore remained healthy, while setup efforts in Malaysia are on track, with the first of the two Subang hangars expected to be ready by year-end. Its new line maintenance joint venture in Cambodia is also slated to begin operations in the second half of the year. In April, SIAEC renewed its two-year term Comprehensive Services Agreements with Singapore Airlines and Scoot valued at S$1.3 billion. Its 55%-owned subsidiary, JADE Engineering, also secured a contract for Boeing 777 cabin retrofit services. As of June 30, 2025, the group's total assets stood at S$2.15 billion, marking a slight increase of 0.3% from March 31, 2025. Looking ahead, the company said in its press release on Tuesday (July 22): 'The sustained growth in passenger traffic, especially in Asia-Pacific, is expected to continue to drive MRO demand. However, we remain vigilant to the challenges arising from the broader macroeconomic environment, such as heightened geopolitical tensions, tariff and trade policy developments, and ongoing supply chain issues.' /TISG Read also: Singapore Airlines tops Travel + Leisure's 2025 international airlines list again () => { const trigger = if ('IntersectionObserver' in window && trigger) { const observer = new IntersectionObserver((entries, observer) => { => { if ( { lazyLoader(); // You should define lazyLoader() elsewhere or inline here // Run once } }); }, { rootMargin: '800px', threshold: 0.1 }); } else { // Fallback setTimeout(lazyLoader, 3000); } });

‘Important' for Johor to get back 25 per cent of tax revenue given to federal government: Regent
‘Important' for Johor to get back 25 per cent of tax revenue given to federal government: Regent

CNA

time3 hours ago

  • CNA

‘Important' for Johor to get back 25 per cent of tax revenue given to federal government: Regent

KUALA LUMPUR: Johor Regent Tunku Ismail Sultan Ibrahim has again called for a larger portion of the state's income tax revenue that goes to federal coffers to be returned to it. This comes amid growing concerns over infrastructure development and project delays in the southern state, he said. 'When 25 per cent of Johor's income tax revenue is returned to Johor, Johor can stand on its own feet,' he wrote in a Facebook post on Tuesday (Jul 22). The regent had previously said that Johor gave the federal government about RM48 to RM49 billion (US$11.36 billion to US$11.59 billion) a year in tax revenue, but received only RM1.4 billion in return. That amounts to an estimated 2.85 per cent return. Tunku Ismail's latest comments came following news of the postponement of the Pasir Gudang Hospital's phased opening. Initially scheduled for next month, it has been delayed to January 2026, much to the regent's disappointment. Tunku Ismail also pointed to the issue of autogates system disruptions at Johor's major land checkpoints - the Sultan Iskandar Building and the Sultan Abu Bakar Complex - as well as matters related to flood mitigation projects as to why more of the state's revenue should be returned to them. 'I wish to convey to Johoreans how important it is for 25 per cent of the state's income tax revenue to be returned to Johor. 'Through this tax return, we would not need to burden the federal government or submit applications to (them) and then endure a long wait for approval,' he said. Malaysia's constitution centralises revenue collection - including all forms of taxes - at the federal level. The federal government then returns a percentage of this to the states based on their population. According to a commentary posted on the ISEAS-Yusof Ishak Institute's website in December 2023, state governments received revenue of RM926 per capita, about one-tenth of the federal government's RM8,969 per capita tax in the year 2022. In June last year, Tunku Ismail said Putrajaya should stop viewing Johor as 'belonging to Malaysia', likening the state to being a beggar for constantly having to highlight its needs. He had then also urged the federal government to consider allowing Johor to keep 20 per cent to 30 per cent of its tax revenue in the state 'Until when is Johor going to be a beggar? The system in the federal government from then until now must change, as Johor does not belong to Malaysia. We are partners, so you have to start treating us like partners,' he was quoted as saying by news portal Scoop. Tunku Ismail was appointed Johor regent at the end of January 2024 after his father ascended the throne to become Malaysia's king for a five-year term. Penang's chief minister Chow Kon Yeow had in June this year also renewed calls for the federal government to consider returning 20 per cent of tax revenue to the state for its development. He had said Penang continued to be among the top contributors to Malaysia's national coffers, but has been "shortchanged" when it comes to federal allocations. "Now is an appropriate time for the federal government to consider this seriously and not just push it aside," he was quoted as saying by the News Straits Times. Sabah has also for years also been trying to negotiate a return of its entitlement of 40 per cent of its revenue as stated in the federal constitution, which it says is crucial for economic development.

Malaysia PM Anwar announces US$24 cash handout for all adults to head off rising costs
Malaysia PM Anwar announces US$24 cash handout for all adults to head off rising costs

CNA

time6 hours ago

  • CNA

Malaysia PM Anwar announces US$24 cash handout for all adults to head off rising costs

KUALA LUMPUR: Malaysia's Prime Minister Anwar Ibrahim on Wednesday (Jul 23) announced new measures to address growing public disquiet about the rising cost of living, including a cash handout for all adult citizens and a promise to lower fuel prices. The announcement came ahead of a planned protest to be held in Malaysia's capital Kuala Lumpur on Saturday, calling for Anwar to step down over escalating prices and a failure to deliver on promised reforms, among other concerns. Anwar's administration has carried out a number of measures to boost revenue and productivity this year, including a minimum wage hike, increased electricity tariffs on heavy power users, and new sales taxes on some imported fruits and luxury goods. Anwar has said the moves were mainly targeted at large businesses and the wealthy, but critics have voiced fears that higher costs would eventually be passed down to consumers, including lower and middle income earners. On Wednesday, Anwar said all adult Malaysians above 18 years old will receive a RM100 (US$24) one-off cash aid to be disbursed from Aug 31. The government will spend a total RM15 billion in cash aid in 2025, up from RM13 billion originally allocated for the year, he said. Police have said they expect between 10,000 and 15,000 people to attend the Saturday protest, which has been organised by opposition parties. "I acknowledge the complaints and accept that the cost of living remains a challenge that must be addressed, even though we have announced various measures thus far," Anwar said. He added that further initiatives to aid those in poverty will be launched on Thursday. Anwar said the government will also announce details on a long-awaited plan to remove blanket subsidies on the widely used RON95 transport fuel before the end of September. Once the subsidy changes are implemented, Malaysians will see fuel prices at the pump drop to RM1.99 per litre, compared to the current price of RM2.50, Anwar said. Foreign nationals, however, will have to pay unsubsidised market prices for the fuel, he added. Anwar previously said in his Budget 2025 speech last year that RON95 subsidies will be cut for Malaysia's top 15 per cent income group. It is not clear whether this remains part of the rationalisation plan. Some middle-class Malaysians had expressed concerns that they could fall into this group - which a 2022 income survey defined as households with a combined monthly income of at least RM13,500 - despite already struggling with rising expenses. Anwar on Wednesday also announced additional allocations for a government programme aimed at increasing access to affordable goods and necessities, and vowed to improve other existing aid measures. Malaysia has seen inflation fall this year, but worries persist over increasing prices of basic necessities like food. Data released this week showed consumer prices rising 1.1 per cent from a year earlier last month, but the costs of food and beverages were up at a faster pace of 2.1 per cent.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store