In Malaysia, physical retail stores remain deeply embedded in daily life as retail future shifts towards online shopping, AI-powered commerce, and doorstep delivery.
On any given afternoon in Kuala Lumpur, a colourful stream of riders in green, orange, and pink jackets weaves between traffic lights and monorail pillars. Grab, Lalamove, Shopee, and Foodpanda couriers zip through the city, delivering everything from nasi lemak to clothing. For millions of Malaysians, especially in fast-growing urban centres, the idea that “everything can be delivered” feels as ordinary as teh tarik at breakfast.
But this everyday convenience raises a bigger question. In a world dominated by online shopping, AI-powered commerce, and doorstep delivery, do physical stores still matter?
The short answer is yes. But their role is changing fast.
Physical Retail Stores in a Hybrid Retail Economy
An Ernst and Young report, Should Retailers Close Stores or Make Them Work Harder?, suggests that modern stores are more productive when they adopt hybrid roles, working not only as sales counters but also as showrooms, service hubs, and fulfilment points.
Despite the dominance of Shopee, Lazada, TikTok Shop, and the rise of instant delivery platforms, brick-and-mortar outlets remain deeply relevant in Malaysia. The reasons go beyond nostalgia. They are rooted in trust, social interaction, and urgency.
Trust, Social Interaction, and Urgency
Trust is a major factor. In countries such as the United States or Japan, decades of strong return policies and regulated marketplaces make online shopping almost risk-free. Malaysians, however, often prefer to inspect products in person, especially electronics, cosmetics, and household essentials. Touching and testing before buying simply feels safer and less prone to unpleasant surprises.
Shopping is also social. Malls such as Mid Valley, Pavilion, KLCC, and Sunway Pyramid are not just retail spaces. They are meeting points, entertainment hubs, and air-conditioned escapes from tropical heat and sudden downpours. For many, a weekend at the mall is as much as family time as it is about shopping.
Then there is urgency. Need a school uniform for tomorrow? A charger cable before your phone dies? A last-minute festive gift? Physical retail stores still win when time is tight.
Blending Online and Offline Retail Habits
In Klang Valley, Penang, and Johor Bahru, shoppers often mix online and offline habits. They browse prices on apps, then visit stores for reassurance before buying. Many retailers now double as mini distribution centres, speeding up deliveries and offering in-store pickups.
Outside major cities such as Kuching and Kota Kinabalu, the picture changes. Patchy address systems, higher delivery fees, and limited courier access mean rural and semi-urban communities still rely on physical grocery stores, night market traders, and local pharmacies. In these areas, physical retail stores remain essential pillars of daily life.
Global Signals Shaping Malaysia’s Retail Future
A 2025 McKinsey & Company report highlights that even in advanced economies, physical stores remain central to the retail ecosystem. Rather than fading away, they are becoming hubs that blend digital convenience with in-store experiences.
Countries such as the United States and Japan have embraced delivery-first lifestyles, but physical stores there have not disappeared. Apple and Nike now design stores as experience centres, blending online browsing with in-store testing and home delivery. Japanese brands like Uniqlo and Muji offer seamless online-to-offline integration with digital kiosks and easy returns.
Malaysia is moving in the same direction.
The Role of AI and Delivery Platforms
Artificial intelligence or AI, will accelerate this shift. Business Insider reported on a Morgan Stanley projection that nearly half of online shoppers will use AI agents by 2030 to search, compare, and recommend products. These tools will not replace physical retail stores. They will complement them.
Delivery services offer speed and convenience, but they cannot replicate the reassurance of touching a product, the joy of a family outing, or the reliability of buying something on the spot. Cultural habits and Malaysia’s vibrant mall culture ensure that physical stores remain part of national identity.
Physical Retail Stores are Evolving, Not Disappearing
The future of Malaysian retail is not a battle between online and offline. It is a partnership where physical retail stores become smarter, more interactive, and deeply connected to digital platforms.
The next time you scroll through deals on your phone, remember this: the mall is not going anywhere. It is simply getting a makeover.
Dr. Ee Yaw Seng teaches marketing and management courses and focuses his research on consumer buying behaviour and online marketing. Dr. Komathi Wasudawan specializes in international business, with research interests spanning sustainable tourism, e-commerce adoption, green HRM practices, work-from-home culture, and gender studies. They can be reached at [email protected] and [email protected] respectively.