A special report by the French Trade Commission - Business France Malaysia (March 2019)
In 2017, Malaysia welcomed a total of 26 million international tourists and recorded a 0.1% growth in tourism receipts, representing a contribution of EUR 7.4 billion to the country's income. In 2018, Malaysia received 26.8 million tourists, a slight increase of 3.4% compared to 2017 (26 million) with revenues of about 18.35 billion EUR, 3.4% more than last year.
28.1 million tourists are expected for 2019 generating EUR 20.1 billion in revenue.
All promotional efforts will culminate with the planned "Visit Malaysia 2020" campaign in the year 2020 to achieve the ultimate goal of the country, namely 36 million tourist arrivals and revenue of EUR 35.6 billion.
In addition to being ranked among the top 10 tourist destinations in the world, Malaysia has also been recognized as the 5th largest travel destination in the world by Expedia UK 2016 and the "medical travel destination of the year" for the third year in a row at the International Medical Travel Awards 2017.
Malaysia receives a majority of tourists from Singapore, Indonesia, China, Thailand and Brunei. Almost half of the visitors are Singaporeans. Because of the history of the two countries, their proximity, and much cheaper prices in Malaysia, many Singaporeans travel to Malaysia for holidays, short business trips, and weekends.
Malaysia enjoys a strategic location and easy access to 60 international airlines and more than 100 destinations. The country has a stable political situation, a high-quality infrastructure, first-class accommodation, and competitively priced services.
The development of halal tourism makes Malaysia a preferred destination for many Muslims.
Medical tourism is one of the key segments of development for the country. The Malaysia Healthcare Travel Council serves as a one-stop shop for all matters related to health travel, including helping travellers with inquiries on health care promotion policies and programs.
Malaysia wants to become a filming destination by producing film sequences for filmmakers, on demand, as well as providing still images from Malaysia to filmmakers during the storyboard stage.
Agritourism is a tourism concept that is rapidly gaining popularity in Malaysia as it offers tourists an assortment of activities related to the agricultural sector. Malaysia is a country rich in agricultural resources.
In fact, the agricultural sector has been the backbone of the Malaysian economy for many years
Among the agritourism activities that have proven popular are visits to orchards and farms, research centres and homestays.
Malaysia is developing a number of tourist attractions such as Ipoh's Movie Animation Park Studios (MAPS), Premium Shopping Outlets, the development of the Desaru Coast, and the upcoming 20th Century Fox World theme park in Genting Highlands.
2,264 hotels are registered and listed by the Malaysian Ministry of Tourism and Culture (MOTAC) as 1- to 5-star hotels, 20 of which are classified as green hotels.
A large number of hotel projects can be expected in Malaysia:
- Hyatt Place Melaka, 2019
- Fairmont Residences and Hotel, 2020
- Kempinski Hotel and Residences, 2020
- Crown Plaza Hotel, 2021
To develop the tourism industry, the Malaysian Ministry of Tourism and Culture (MOTAC) provides mortgage assistance through the Tourism Development Infrastructure Fund (TDIF) under the Malaysian Development Bank (BPMB).
The Government of Malaysia has created the Malaysian Investment Development Authority (MIDA) to attract foreign investment and serve as a focal point for legal and regulatory issues.
Organized within the framework of the Ministry of International Trade and Industry (MITI), MIDA serves as a guide for foreign investors interested in the manufacturing sector and in many service sectors.
Malaysia has one of the world's most trade-dependent economies, with trade reaching 165% of annual GDP according to the World Trade Organization. The Government of Malaysia views foreign investment as a powerful force for the economic development of the country but is hampered by restrictions in some sectors and a sometimes heavy regulatory regime. However, the Government continues to liberalize and, in some cases, eliminate investment restrictions.
This article was first published by the Malaysian-German Chamber of Commerce and Industry (Nov/Dec 2019)
30 January 2020
The Perhentian Islands are islands in Besut District, Terengganu, Malaysia.
Malaysia’s tourism industry has developed into a significant generator of revenue for the economy. The Annual Tourism Report recorded 25.9 million tourists visiting the country in 2017, generating RM82.2 billion of income for the state. However, to reduce the economy’s dependence on exports, the tourism sector is to be further expanded. The Malaysia Tourism Promotion Board has thus expanded its advertising activities considerably. Already in 1999, the campaign “Malaysia, Truly Asia” was initiated to attract more international visitors to the country. Currently, the tourism board is heavily promoting its campaign “Visit Malaysia 2020”. To achieve the target of 30 million tourist arrivals, the government has allocated RM1.1 billion from the Budget 2020 to the Ministry of Tourism, Arts and Culture, including an allocation of RM90 million to drive awareness, promotions and programmes for the “Visit Malaysia 2020” campaign.
Today, a majority of income is still generated by domestic tourism. To attract more international visitors, the Malaysian tourism industry has extended its activities mainly to Western Europe, with arrivals from these countries rising by 12.1% last year, according to official government press releases. Especially the German market, with 128.644 arrivals in 2018, holds great potential. For 2019, the tourism board expected over 140,000 German tourists. In March, Malaysia participated as the official partner country in the world’s leading trade fair ITB in Berlin. As part of the event, a Memorandum of Joint Collaboration was signed between Malaysia Airport Holdings (MAHB) and Condor Airlines to ensure the Kuala Lumpur-Frankfurt route.
In Berlin, the Malaysian delegation focused their advertising on cultural, health- and ecotourism. The latter has developed in recent years from a niche market to an essential sector of the global tourism industry. In Western developed countries, the “eco” trend has become an integral part of the lifestyle industry, as the middle class shows a growing interest in sustainable products and services. As these consumers are usually willing to pay higher prices in exchange for a “green feeling”, the offer of ecotourism services has developed especially in the middle and high-end sector. Malaysia, with its tropical rainforests and long beaches, has the potential to become a top destination for eco-tourists.
The local state authorities are well aware of this. The Penang State Government, for instance, reported that the topic of ecotourism would be incorporated more strongly into future plans for tourism development. The Think Tank Penang Institute published a study in which they showed that today, already more than 20% of the visitors came to the island because of its national park. However, the unique landscape of the island still had untapped potential, and proper marketing could attract tourists and at the same time promote the long-term protection of flora and fauna. After all, this is the underlying idea behind ecotourism. The World Tourism Organization states that sustainable tourism “takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities”. In an ideal scenario, the local businesses and communities would benefit from the tourism revenues, thus developing an interest in the conservation of nature. The destruction and pollution of nature reserves by tourists as well as locals is unfortunately still a major challenge in Malaysia.
National Ecotourism Plan
The potential advantages of sustainable tourism have also been acknowledged by the government which has drafted the National Ecotourism Plan. The plan identifies problems that are currently hampering the growth of the sector and outlines solution strategies. Strong difficulties can be seen in the area of investments and financing. It is still difficult for small and medium-sized enterprises to generate funds. In addition, national as well as international investors have not been sufficiently attracted so far.
In order to address this issue, it is proposed to improve the transparency and quality of local services to attract more private investors from the tourism industry. For this purpose, the uniqueness of Malaysia as an ecotourism location must be emphasized to prevail against competing countries such as Indonesia or the Philippines. The National Ecotourism Plan also envisions further development of existing programmes supporting investments, including tax incentives, one-time grants or micro-credits for local providers. Putrajaya has acknowledged the need for private investment in the tourism sector and has therefore promised for 2020, to provide tax deductions or even tax exemptions for organisers of tourist activities and conferences as well as for the companies sponsoring them. Furthermore, the idea of supplementing the existing hotel star rating system with a separate category that specifically targets sustainable resorts is being considered.
More aggressive marketing activities are supposed to make Malaysia known as a top ecotourism destination worldwide. It is important to use digital platforms for marketing, as the concerned target group – educated, urban middle class – obtains information about potential travel destinations primarily through social media channels or travel blogs. In this sense, service providers should also meet the demands of visitors. WIFI and connections to public train or bus lines are indispensable for an attractive destination. The National Ecotourism Plan, therefore, envisions more railway connections between big cities and ecotourism attractions. Even though many construction sites still have to be completed on the way to becoming a top ecotourism destination, it can be assumed that Malaysia’s ecotourism sector will continue to develop strongly in the years to come.
Mount Kinabalu is a mountain located at Sabah, East Malaysia.
A special report by the French Trade Commission - Business France Malaysia (November 2018)
The Malaysian hygiene and beauty market is driven by the steady rise
of purchasing power and strong domestic demand. Although it reached maturity in 2013, it still represents EUR 1.6 billion in 2016, which is + 4% compared to 2015. Skincare market grew by 7% in 2016, reaching EUR 535 million in 2016 and is expected to record a compound annual growth rate (CAGR) of 4% at constant 2016 prices for a total of EUR 656 million in 2021.
The Malaysian middle and upper-classes, who represent the majority of the country's 32.3 million people, are increasingly giving more and more importance to their image.
Furthermore, they are also eager for more sophisticated care. This Is shown by the growing demand for makeup, natural cosmetics, multi-functional beauty products, baby care and men's products.
MARKET DEVELOPMENT & LOCAL PLAYERS
Colour cosmetics are used daily by Malaysians, especially those who work in the corporate world to embody a greater self-image and confidence in the office. Rising adult literacy rates have pushed more Malaysian consumers to look for healthier beauty and personal care products enriched with natural ingredients.
Korean brands which are more adapted to Asian skin are experiencing strong success, which is also experienced by American brands who are actively developing products to suit the market. Local Malaysian brands, on the other hand, remains limited but is growing rapidly by developing particularly in the halal-certified cosmetics and perfumes sector. European products are growing in popularity, especially with French producers leading the way by being the first European supplier of beauty products in Malaysia.
The remarkable power of direct sales networks is to be exploited particularly in the field of food supplements and white label products. While high-end cosmetic products are still mainly distributed in multi-brand outlets, many companies have successfully developed their own network of boutiques (L'Occitane, Khiel's, The Face Shop, Mac, Bobbi Brown, Melvita, Aesop, etc.).
Halal certification, while not mandatory in Malaysia, offers a real competitive advantage. The global halal cosmetics market is expected to grow with a compound annual growth rate (CAGR) of + 12.9% from 2017 to 2025. This is thanks to a good socio-economic condition and a large Muslim population worldwide, estimated at about 1.6 billion, the majority of the population is residing the Asia Pacific region and accounted for approximately 62.2% of total market revenue.
The values promoted by halal certified products have become synonymous with ethical consumerism and range from social responsibility to animal welfare. To add more, the tedious certification process and rigorous requirements have caused a large number of consumers to perceive halal cosmetics as generally safer.
Beauty salons with international brands such as Sothys, Clarins, Caudalie, Decleor, Guinot and Dermalogica are proliferating in Malaysia. Institutes and spas have a strong presence in hotels and shopping centres, where they usually have a dedicated floor for it.
Only a local company with an import license (importer/distributor or subsidiary) could start the procedure for placing the cosmetic product on the market. This procedure must be carried out by a company or legal entity incorporated within the field of cosmetics, with a permanent address and registered with the Malaysian Companies Commission (with the scope of the health/cosmetic product).
The National Pharmaceutical Regulatory Agency (NPRA), which reports to the Ministry of Health, is the reference authority
and average cost of registering a product is RM 50 (around EUR 10 per product, by reference).
The notification of a cosmetic product is valid for 2 years. Renewal must be done no later than 1 month before the expiry date with processing fees.
Average registration time of a product: 1 week to 6 months (if it does not contain any prohibited substance).
The average time between the first administrative procedure for export and the placing on the market: 1 month to 1 year.
Malaysia applies it’s regional ASEAN regulations as defined in the ASEAN Cosmetic Directive.