Center for e-Commerce And Retail Transformation (CART)

The retail industry worldwide is undergoing a monumental transformation as electronic commerce (e-commerce) and mobile-commerce (m-commerce) replace the traditional brick-and-mortar retailing. Until now, the traditional retail industry in Malaysia is largely untouched by this transformation, with the business-to-consumer (B2C) e-commerce sales amounting to less than three percent of all retail sales (source). This is significantly lower than the average e-commerce penetration of about seven percent worldwide (source) and over 15 percent in the world’s largest e-commerce market, China (source).

This is likely to change soon! The global e-commerce behemoths, Alibaba and Amazon, both entered Malaysia and Singapore markets around July 2017. Earlier in the year, Malaysian government launched the world’s first Digital Free Trade Zone in with the intention of doubling the country’s e-Commerce growth by year 2020. These developments could provide a foundation for e-commerce retail to skyrocket in Malaysia and South East Asia.

However, several questions remain unanswered. How will these developments affect the overall retail industry in Malaysia (and South East Asia)? How should the brick-and-mortar retailers adapt to survive and thrive in the e-commerce environment? What strategies should the e-commerce retailers use to exploit the growth opportunity? What role should the government policy play to foster a sustainable multi- and omni-channel retail environment for the benefit of the consumers?

MISI Center for e-Commerce And Retail Transformation (CART) will explore these and related questions through scholarly inquiry. CART also seeks to provide objective analysis to support to the large-scale developments, such as the Malaysia Digital Free Trade Zone, currently underway.

Mission

The mission of MISI Center for e-Commerce And Retail Transformation (CART) is to apply fact-based scientific approach and innovative thinking to:

• Study the particular nature of e-commerce transformation in the Malaysian and South East Asian context
• Identify strategies and policies for the traditional and e-commerce retailers to thrive in the new environment, and
• Promote talent development in the region’s retail + e-commerce sector to build capability in Malaysia through industry outreach

Approach

The research conducted at CART is grounded in three fundamental principles:

• Holistic view of the retail industry, by examining multi- and omni-channel retail strategies and end-to-end supply chains delivering retail products
• Fact-based research using quantitative operational data and study of real-world practices using qualitative field-based inquiry
• Use of mathematical models and statistical analyses to obtain insights

Research

The following is a list of CART research projects that are either in progress or have concluded recently.

End-to-end Supply Chain Strategies of Apparel Retailers
The multi-year project examines the end-to-end supply chains in the apparel industry.

• One of our studies published recently (Phadnis & Fine 2017) shows that the optimal strategies for end-to-end supply apparel chains can differ from, and be superior to, the optimal strategies for retail or procurement functions considered in isolation. The study developed a mathematical model of end-to-end supply chain, applied it to obtain insights using parameters of the apparel industry, and had the model’s insights critiqued by senior executives in the apparel industry. You can download the paper here (abstract available for free; full paper requires access to the journal).
• A new study advances the one mentioned above to the omnichannel setting. This study, currently in progress, builds a model of an end-to-end supply chain involving omnichannel retailing.
• A CART study, sponsored by a leading global apparel manufacturer (over 50,000 employees worldwide), is currently examining when and how large safety stocks can lower lead times in the time-sensitive apparel industry.

End-to-end Supply Chains of SME Retailers in Malaysia
This project, funded by the Malaysia’s Ministry of Higher Education under the Fundamental Research Grant Scheme, examines end-to-end supply chain practices of small and medium enterprise (SME) retailers in Malaysia. Using ethnographic observations and interviews with SME retail store owners and managers, the study has revealed important differences between SME and large retailers, and how they affect the efficiency of their supply chains.

The objective of this study is to develop recommendations for best practices for SME retailers based on the peculiar nature of their supply chains.