MORE oil-rich Arabs are heading to Malaysia for holidays - and shopping. And new shopping malls are sprouting across the Causeway to capture their spending money.

Retailers and food-outlet operators in Singapore should not feel left out of the party, as they too can have a piece of the action. They will not need to go to the Middle East to set up shop. There's a cheaper and faster way - expand into Malaysia.

"Malaysia's retail industry is growing fast," says Tan Li Lin, director for the business services and lifestyle division at International Enterprise Singapore.

Malaysia's retail market is estimated at RM72.8 billion (S$31.6 billion) for last year, up 7.4 per cent from 2005. Growth has averaged 6.1 per cent yearly from 2001 to 2006. Retail sales are tipped to hit RM77.3 billion this year.

Latest mega-mall: The Pavilion, which opened in Kuala Lumpur last month, has high foot traffic ? an estimated 24 million per year

Kuala Lumpur alone boasts 66 shopping malls. Selangor has 58. The total retail space in these two territories is 36.3 million square feet.

Another 12 malls are due to open by the end of this year. "With several new shopping malls opening and the entry of international brands, the Malaysian retail market offers many opportunities," Mrs Tan says.

She says the time is ripe for Singapore retailers to set up a presence there. "The country's increasing tourist arrivals, especially from the Middle East, and strong domestic spending spurred by the government - hike in civil servants' pay, cancel school fees - indicate that the retail market would continue to stay buoyant."

Malaysia, just next door to Singapore, is no stranger to Singapore retailers and often their first stop when they venture overseas; many indeed are already operating there.

Some of those who once left have made a comeback, with Tangs among recent returnees.

"Tangs is pleased to be back in Malaysia as it has a very exciting and fast-expanding retail market - and we would like to be part of it," says Foo Tiang Sooi, the department store's chief executive. "Over the years, Malaysian shoppers have become more discerning and sophisticated in their tastes and lifestyles."

There are also the latecomers - Singapore retailers making their foray into Malaysia only recently. They include Polar Puffs & Cakes, Ichiban Boshi, Robinsons and Food Republic.  

The retail sector in Malaysia is clearly on a roll. Singapore retailers there are constantly on the lookout for suitable locations for expansion, according  to Mrs Tan. Those looking to expand include Crystal Jade, Sakae Sushi, Shihlin Taiwan, StreetSnack and Bakerzin.

But prime retail sites are hard to find, because of a shortage of space.

"Retail occupancy rate in Malaysia, particularly in prime malls, remains high as demand for space way surpasses supply," Mrs Tan says.

One Malaysian report puts the retail occupancy space in the Klang Valley area in Kuala Lumpur at over 90 per cent.

Still, Singapore retailers in Malaysia - from fashion to food and stationery brands - have been quick to seize opportunities. They have filled their share in two new mega-malls that sprang up recently in Kuala Lumpur - Pavilion and The Gardens.

"These malls are located in strategic locations with high foot traffic - an estimated 24 million per year for Pavilion and 12 million for The Gardens," Mrs Tan says.

She believes that Singapore retailers have what it takes to succeed in Malaysia. "Having polished their offerings by both Asian and international consumers in Singapore, Singapore retailers will be able to bring to the new market new concepts and merchandise as well as quality shopping and novel dining experiences," Mrs Tan says. For those in the food business here, she says Malaysia is a natural choice for overseas expansion. Not only because of its proximity, but also because its culture is similar to Singapore's. And while Malaysia is predominantly Muslim, many of the Singapore food-outlet operators are MUIS halal-certified.

IE Singapore is keen to push more Singapore retailers into Malaysia - and has an armoury of assistance schemes to help them.

While Malaysia is familiar to many retailers here, there are always some who need introduction, the market connections and leads. IE Singapore has the means and network to put them in touch with the right people, and it can help identify potential joint venture partners.

Often, this is achieved through IE Singapore-led trade missions. Just in March this year, it tied up with the Restaurant Association of Singapore to lead 10 food service companies to Malaysia. There the companies met up with shopping mega-mall operators and prospective partners.

"The mission also provided better insights into the Malaysian retail food market," Mrs Tan says.

IE Singapore also helps with branding to raise the profile of Singapore retailers in Malaysia. And it is paying attention to identifying emerging opportunities for food service in other untested parts, like East Malaysia.

"To assist our fashion retailers stay competitive, a textile outsourcing mission was organised to Kuala Lumpur in August," Mrs Tan says. "Many of these fashion retailers have outlets in Malaysia. A number of potential subcontractors were identified during the mission."

She says IE Singapore work with mall operators in Malaysia to promote Singapore's food and beverage retailers and their cuisine.

"IE Singapore has assisted to open doors for a number of our F&B service operators, especially those who are new to Malaysia," Mrs Tan says. "We introduce these companies and their brands to mall operators to allow them to pitch for space in their malls."

Navigating the Malaysian bureaucracy and interpreting their rules can be a big headache for first-time Singapore F&B service operators. Besides lending them a helping hand in this area, Mrs Tan says IE Singapore also help Singapore F&B service operators in market compliance to ensure smooth operations.

IE Singapore, for instance, has helped Crystal Jade secure employment passes for their foreign chefs, paving the way for the restaurant chain to expand across the Causeway, she says.

» Tangs goes big in M'sia with new flagship store
» Polar takes its curry puffs across the Causeway