KUALA LUMPUR, 22 May 2020 – Gone are the teeming crowds of shoppers that usually throng the streets of the Kuala Lumpur before Eid al-Fitr, a day that Muslims around the world celebrate after a month of fasting. Instead, many are opting to buy their essentials like food online and foregoing spending on new clothes and furniture, which they would typically purchase during this shopping boom period.
The pandemic and measures aimed at curbing infections have battered this year’s Eid retail sales in Malaysia and Indonesia, home to the bulk of Southeast Asia’s 240 million-strong Muslim population. In Indonesia, where the Eid festive season counts for nearly half of annual revenue, retailers are seeing sales fall by almost 90%, while their Malaysian counterparts estimate an 80% drop.
In Kuala Lumpur’s main Jalan Tuanku Abdul Rahman street, the few shops that are open attract little foot traffic. Two masked youths stand by the entrance of a garment store, temperature scanner in one hand and a pen in the other, as they take down the details of customers who trickle in.
In any other year, the streets would be teeming with shoppers squeezed between rows of stalls selling colorful clothing and roasted peanuts, with sellers blasting discounts and festive music through crackling speakers.
Domestic expenditure contributes more than half of Indonesia and Malaysia’s gross domestic product, making the two countries heavily reliant on consumers. Already, the economies of both nations are seen contracting in the second quarter as this key pillar of growth falls away.
The Eid celebrations traditionally stretch out for a month in Malaysia, as families gather for reunions and share food, posting happy photos on social media in their new finery. This year, restrictions on travel and group gatherings are putting a dampener on celebrations across the region.
In Indonesia, major cities like the greater Jakarta area and other provinces home to about 100 million people have imposed large-scale social distancing rules, which includes closing shopping malls and places of worship. Retailers now have to rely on just 5% to 10% of their usual sales through online platforms, said Roy Mandey, chairman of the Indonesian Retailers Association.
Safe from coughing crowds, grimy fingers and movement restrictions, online stores are gaining in popularity. PT Mitra Adiperkasa, the Indonesian operator of global brands such as Zara and Starbucks with over 2,500 lifestyle retail stores, is focused on e-commerce as malls are shut, said corporate secretary Ratih Gianda.
Asian online fashion platform Zalora says it’s seen consumer interest rebound after an initial slump in sales when news of the virus first spread. In the fasting month before the Eid celebration — also called Hari Raya in many Southeast Asian countries — the company said it saw sales rise for modest wear clothing.
“With movement restrictions in place, we are pleased to be able to give customers the option of ready-to-wear for their Raya purchases, as we are able to deliver directly to them with ease and in full security,” Giulio Xiloyannis, Zalora’s chief commercial officer, said in an email.
Still, online stores may not replace the brick-and-mortar environment that encourages more spending.
“Impulse buying or unplanned purchases usually happens because customers visit the stores and it usually accounts for 40% of modern retail transaction,” said Mandey, of the Indonesian retailers group. “But now, customers tend to buy only basic needs, so impulse buying doesn’t happen.” He sees overall sales growing 3%-4% in Indonesia this year, compared to 8.5%-9% last year.
Basic needs usually translate to food, not new clothes — but even those essential goods may register a drop compared to previous years.