PETALING JAYA: Housing market recovery and experiential spending are expected to support Mr D.I.Y. group’s (Mr DIY) expansion in Malaysia this year, Fitch Solutions Country Risk and Industry Research said.
Recently, the Malaysian home improvement products company announced plans to open 180 stores across its three brands, Mr DIY, Mr Toy and Mr Dollar, in 2023. The group specialises in supplying home improvement products at low prices, focusing on hardware, household and furnishing, electrical, stationery and sports equipment among others.
In its outlook report, the research firm holds a positive view of Malaysian consumer spending on household goods as the country’s property market shows steady growth, underpinned by an increase in the volume and value of residential property transactions in 2021 and 2022, following post-Covid pandemic recovery.
“Similarly, we have been seeing robust growth in spending on discretionary items such as toys and computers, driven by stronger consumer demand for experiential products resulting from the impact of Covid-19 lockdowns in restricting consumers’ social interactions.
“Both factors, a booming residential property market and sustained demand for smaller discretionary items, will support strong spending in furniture and furnishings, audiovisual (AV), camera and computer as well as toys, sports, garden and pets spending,” Fitch Solutions said in a statement.
Over 2023, it forecast that furniture and furnishings spending will remain the largest element, accounting for 37.6% of total household goods spending. In addition, Malaysian consumer spending on AV, cameras and computers and toys, sports, gardens and pets will each show the strongest growth in the household goods category, despite slowing from 22% year-on-year ( y-o-y) expansion in 2022 as base effects begin to wear off, growing by 14.2% y-o-y to reach RM4.3 billion.
Over the medium term (2023-2027), Fitch Solutions said, spending in both of these sub-segments will average annual growth of 11.5% y-o-y to RM6.5 billion by 2027.
As part of its long-term sustainable growth strategy, Mr DIY group plans to continue its store expansion and its focus on providing innovative products at low prices which the research firm believes will be beneficial to local consumers, a majority of whom fall within low to middle-income brackets and will be exposed to inflationary pressures.
Fitch Solution expects that this will drive increased demand for products at low prices, as consumers seek to maintain existing purchasing behaviours.
