In the first six months of 2016, Malaysia’s revenue from shopping tourism saw year-on-year (YoY) growth of +17.1%, with Chinese tourists becoming the third largest group of foreign shoppers by nationality, according to Malaysian national news agency Bernama.
At the beginning of November Malaysia’s minister of tourism and culture, Dato’ Seri Mohamed Nazri bin Abdul Aziz, announced that the country’s visa-exemption policy for Chinese citizens will be extended until 31 December 2017, reported the New Straits Times. Since March 2016, Chinese citizens have not required a visa to travel to Malaysia for a stay of up to 15 days. As a result, inbound tourism grew 26.3% in the first eight months of 2016 compared to the same period the previous year. The minister expects Malaysia to reach its target of over two million Chinese visitors by the end of the 2016.
With more than 500 shopping centres, including three of the 10 biggest malls in the world, Malaysia has seen a significant increase in tourism shopping, according to Bernama. Destinations such as Johor Bahru have seen an increase in popularity not only among Indonesians and Singaporeans, but also with Chinese travellers to South East Asia, the Malay Mail reported. Bernama also reported that, while attending the opening of the 2016 1Malaysia Year End Sale (1M YES), deputy minister of tourism and culture Datuk Mas Ermieyati Samsudin commented that the event (which runs from the beginning of November to the end of December) aims to encourage shopping by both local and foreign tourists. Spending by visitors from China, Indonesia and Bangladesh has reached record levels, with Chinese tourists spending 3.4bn ringgit (730m euro) in the first half of 2016.
At a Tourism Malaysia event with Alitrip in early November, Malaysia’s prime minister Najib Abdul Razak stated that the online payment platform Alipay is expected to start operating in the country from next year, according to Ifeng News. He also said that Malaysia Airlines will be increasingly focusing on second-tier cities in China, including Haikou, Nanjing, Fuzhou, Chengdu, Wuhan and Chongqing, in addition to first-tier cities such as Shanghai and Shenzhen. On the same day, Sohu Sport reported that the prime minister had signed the Belt and Road marathon cooperation project with China’s sports administration, with Malaysia being one of the venues for the marathon series. According to Sina Finance report in early November, China is the biggest business partner of Malaysia, as well as one of the most important member countries of the Belt and Road initiative.
Global Blue takeouts:
• With the visa-free policy for Chinese tourists, which is being extended to the end of 2017, Malaysia is on target to reach more than two million Chinese visitors during 2016, with a significant amount of ‘shopping tourism’ during the 1Malaysia Year End Sale.
• Economic cooperation between China and Malaysia will become increasingly close, with Malaysia Airlines opening new routes in China, and projects such as the Belt and Road initiative.
• For more on Asia’s changing Tax Free Shopping (TFS) performance, read our October data analysis: Asia update: rising middle-class Chinese change TFS spending dynamic.