By AJ Black
The Malaysia Watch Trade Association or MWTA had a dialogue with the Malaysian Custom officers at the Ministry of Finance in Putrajaya yesterday. The pressing matters are pertaining the exclusion of clock and watches from the tax exemption list for the Sales and Services Tax (SST) which will be enforce in September 2018. The MWTA team was represented by its committee members including Mark Seng, the President of MWTA and the representatives from importers, wholesalers and retailers’ businesses of the watches from the Klang Valley, Kuala Lumpur and Penang.
No doubt, watches and clock are not necessity items to many people, which warrants for tax exemption to be available and priced attractively. But MWTA has a different story of watches that has been stimulating economic growth indirectly to this country. As of 2017, it contributed to total sales of MYR 4billion, collectively which has benefited the country as well.
If you are familiar with popular tourist attractions, along with the pristine beaches, beautiful nature and unique cultures, shopping haven has been one that has topped the list over the years. Among the most sought-after purchase is the watches from our malls and airport shops. Along with our world class malls, there is also world class brand of watches that sits beautifully to engage the visitors to Malaysia. It is attractive because it is at the right price, meaning cheaper than our neighbouring countries, and it is at the right place and time during the vacation in Malaysia. This ‘experience purchases’ evokes memories of a place or time while in Malaysia. And watches are an ideal choice because it is small and simpler, yet elegant and precious enough to be a keepsake.
Apart from shopping haven, golf-tourism has also linked branded watches as a must-buy if golfers are in Malaysia. It is a combination of the right experience and at the right price, thus our premium malls are often frequented to sought after the branded watches as a prestige symbol.
This trend didn’t happen overnight. It was an effort built over 36 years by the watch traders, to bring the best of brands into the country to lure the new money to acquire these timepieces as status symbols if not just to tell time. The investments made to have luxury brands unveiling at our supermalls has given the mileage for tourism in Malaysia, and more so when they have an outlet that just do that, selling luxury watches at an attractive price. The significant inflow of tourist, especially from China, has shaped a different purchasing scenario altogether. They are bargain hunters, which will prefer to switch the whole experience to another country if the price isn’t right.
So much of how time will change the pattern in our economy, locally the sales of watches have been steady despite the emergence higher end smartphones that seems to combine it all. According to a KL based distributor, the generation X and generation Y in Malaysia owns watches more as an accessory than to tell time. While the price range is between mid to lower priced watches, they tend to have more than 2 watches to suit the occasions.
The scenarios mentioned, will also tell us that things would be different if our price is no longer competitive. At the moment, the recipe seems to be just right, the best experience and the right price. And the tourist inflow has been steady. It all will start with small things before it affect something else. Could this trigger a chain reaction to the rest of the industry?
Only time will tell.