Foreign retailers’ expansion strategy to Malaysia: The case of the hypermarket

Internationalisation of retailing has been increasing rapidly since late 1980s when international major retailers spread their wings to new territorial markets. Malaysia is not exempted from this trend and has been a pivotal investment destination of several international retailers. The country has witnessed various expansion strategies of these retailers such as internal/organic expansion, merger and acquisition, joint venture, franchise system and noncontrol investments. This study took a closer look at the case of the foreign-based hypermarkets in Malaysia and found that such hypermarkets expanded their presence through organic expansion as well as merger and acquisition. In these strategies retailers provided at least 30% of local equity through joint venture with other Bumiputera (indigenous) firms. The expansionary impact was evidenced by the marked increase in the number of foreign hypermarkets across the nation: from 58 in 2007 to 124 in late 2014. The highly urbanised Klang Valley region remained the expansionary hub of the foreign-based hypermarkets.