LOCALISING THE SUSTAINABLE DEVELOPMENT GOALS: WHAT LOCAL GOVERNMENTS NEED TO KNOW?

ROLE OF LOCAL GOVERNMENTS IN THE EFFECTIVE IMPLEMENTATION OF THE SUSTAINABLE DEVELOPMENT GOALS

GROWING OF E-COMMERCE AND SHOPPING ONLINE: IMPACT TO THE PROPERTY MARKET IN MALAYSIA

GROWING OF E-COMMERCE AND SHOPPING ONLINE:

IMPACT TO THE PROPERTY MARKET IN MALAYSIA

by

DR. AZMIZAM ABDUL RASHID

THE GROWING OF E-COMMERCE AND SHOPPING ONLINE

In a 1997 article, Baen and Guttery predicted that the emergence of the web as an open medium for commerce would threaten the role of the real estate professional as a market intermediary. They predicted that the internet would provide increased consumer access to information which in turn would lead to an increase in for-sale-by-owner (FSBO) listings, and a decrease in the employment and income level of real estate professionals. This prediction was tied to the belief that real estate professionals derived their power from the proprietary information they controlled, and thus this power and their position on the supply chain would diminished once this information became more accessible on the internet. At the time this sentiment was echoed by the National Association of Realtors (NAR). When first faced with the emergence of the internet in the industry the NAR fought to prevent the release of the coveted Multiple Listing Service (MLS). In 2003 the NAR proposed bylaws, that according to some, “illegally adopted rules that would discourage new real estate sales practices, including home sales over the internet and discounted realty services” by allowing real estate professionals to withhold their listings from online brokers.

In the developed world, 77 out of every 100 people are now connected to the internet². This high level of internet penetration coupled with a generation brought up online and familiar with the digitally connected lifestyle, we think has led to comfort in sharing their personal details online. With this comfort in using both the internet and sharing personal details, it seems inevitable that savvy retailers would capitalise on these favourable market characteristics. E-commerce, one of the fastest growing market sectors, is to an ever greater extent affecting the pace and trends in development of the domestic industrial and retail market. The dynamic development of the e-commerce sector represents both an opportunity and a challenge for the industrial and logistics property sector. Due to the growth of the e-commerce sector, the existing distribution models are evolving, the time of delivery is becoming shorter and the range of additional services is now expanding. As per the estimates, the e-commerce sector is generating a combined 10-15% of the total annual demand for modern industrial space.

Unlike traditional stores, whose demand for warehouse space is relatively predictable, the e-commerce sector requires much more flexibility. The range of goods, the number of customers, as well as the place of delivery in case of an online shop vary considerably, therefore it is extremely important that warehouse properties be adapted to the changing demand and landlords enable their tenants to increase the space actually occupied in peak times, such as e.g. during the pre-Christmas rush.

Lease costs along with the quality of services are also an important factor as far as the e-commerce sector growth trends are considered. Therefore, many online shops take the decision to collaborate with specialised logistics and courier companies. The vast majority of the key players have a dedicated line of services focused on e-commerce, starting with preparing orders, storage, handling of returns and exchanges, through to management of incoming and outgoing payments, customer services and software management. Outsourcing this type of services means that the costs may be lower than in the case of managing the entire supply chain internally, as it allows the online shops to concentrate on their core business, which is the selling of goods and services.

E-commerce has entered our lives for good now, changing both the supply chain market and the warehouse property market. In order to gain maximum benefits and explore the sector’s full potential, companies involved in this type of business should understand it well and adapt to the changes that are taking place within it, including the logistics and warehousing aspect thereof. UK retailing is currently being reshaped by new competitive patterns and pressures, contributing to a weakening in retail property performance. The growth of online retailing has been perceived as a further threat to the sector, although the problems facing ‘pure play’ e-tailers mean that Internet shopping is likely to be increasingly dominated by multi-channel retailers. Web-based retailing will add to competitive pressures on retailers and increase general price transparency. Internet sales penetration will vary between products and services and also geographically. Even with Internet sales growth being concentrated on established retailers, there will be impacts on retail floor space productivity, property requirements and store networks, with implications for retail property performance. Online shopping could reinforce the existing trend of polarisation of retail spending into the larger and more attractive centres within the retail hierarchy. Retailers and retail property investors need to find ways of upgrading the shopping experience to respond to the growth of online sales. 

E-COMMERCE AND SHOPPING ONLINE IN MALAYSIA

No one can predict how successful e-commerce will be in Malaysia in this competitive market. Malaysia is still lagging far behind developed countries. Online shopping is supplementary or complementary to existing business as an additional marketing, promotion and fulfilment channel. Malaysia has a huge potential for Internet procurement. It will be hard for Malaysians to rapidly adopt online shopping due to cultural inertia. Malaysians like going to the shops rather than browsing the Internet without an initial inspection of the goods. This culture will change for Malaysian consumers as they become aware of the advantages of online shopping. If the consumer can be convinced that it is safe and reliable to purchase online, the potential will be unleashed. A new economic culture that is in contrast to the traditional one of owning and keeping the intellectual property one creates, may flourish.

In Malaysia, the use of the internet be it via the mobile phone or desktop computer, to purchase things has been rising steadily over the years. In fact, Malaysia is one of only five places in the world where the use of smartphones is higher than computers (51% versus 39%), according to The Connected Consumer Survey 2014.These figures also reveal a shift in how consumers are researching what they want and their purchasing behaviour. For example, the Consumer Barometer with Google data reveals that of the 5,191 Malaysian respondents, 55% use the internet to do product research via smartphones, tablets or computers. Lazada Group was founded in 2011 by Rocket Internet in Singapore. A year later, it soft-launched Lazada Malaysia and other portals in Southeast Asia and Taiwan.

E-commerce platform Lazada Malaysia says on its website that it has “a broad product offering in categories ranging from fashion, consumer electronics to household goods, toys and sports equipment”. The company recently leased a 224,000 sq ft warehouse in Subang Jaya, Selangor.  Before that, it had a warehouse of only 50,000 sq ft,  7km from its new premises.  It also leased 25,400 sq ft of office space in Menara Worldwide on Jalan Bukit Bintang, Kuala Lumpur. “We consider the location of our main office to be strategic — an MSC-status building in the Golden Triangle. It is convenient for our employees, suppliers and partners,” says Lazada Malaysia CEO Hans-Peter Ressel.

Ressel says an ideal warehouse should have clear and separate access points to different areas of operations. “Couriers and suppliers do a lot of deliveries and pick-ups daily so ample space for loading and unloading is a must. “In terms of offices, landlords must be prepared to offer bigger space with supporting facilities to cater for staffing growth. Space is very important for an e-commerce business,”

THE FUTURE OF PROPERTY MARKET IN MALAYSIA

E-commerce in Malaysia is growing, but there has been little impact on the leasing of office and warehouse space by e-tailers as yet. Although retail sales from e-commerce is small — making up less than 5% of total sales,  according to Deloitte Consulting Malaysia executive director Kavita Rekhraj — some companies are taking steps to cater for future growth in view of its potential. “Many of the leading logistics, distribution and warehousing players are seen to be increasing their warehousing capacity. These include Century Logistics and Tiong Nam Logistics Holdings, which are building multi-storey warehouses of up to one million sq ft. SingPost’s acquisition of Axis Plaza in Shah Alam in 2014 also supports the growth potential of e-commerce in the country,” says Kavita.Knight Frank Malaysia executive director for capital markets Allan Sim says, “With regard to warehouses, we understand that a few aggressive e-commerce companies are looking to increase their facilities to at least twice their current capacity, to nearly 200,000 sq ft. We also understand that they have plans to double that capacity in the next three to five years. “When it comes to offices, many e-commerce companies, especially those in the services sector, are occupying Grade A space in the city centre, taking up an average space of 20,000 sq ft, at rents of RM6.50 to RM8 psf per month. Many of the smaller players are scattered around the city, occupying offices of between 4,000 and 6,000 sq ft, which have lower rents of RM3 to RM5 psf per month.”

As online sales grow, industrial properties are expected to draw more attention.“From the real estate perspective, it’s more a matter of how the space is used, and in this case, the winner is the industrial real estate sector,” says Area Management Sdn Bhd chairman Datuk Stewart LaBrooy. “It’s much more efficient and cheaper to spend real estate dollars on distribution centres than on retail space. Stores of the future will have different footprint sizes. Retailers are configuring their stores so that they don’t need so much space for inventory.” Area Management is a regional private equity firm specialising in industrial and institutional real estate development and management. It provides real estate advisory services to institutional clients and due diligence services to institutions acquiring corporate real estate and is currently developing a 1.5 million sq ft inner city distribution hub in Ampang, Selangor. LaBrooy notes that e-commerce organisations will seek out warehouse and distribution spaces based on specific criteria to ensure their businesses are not impeded.“ Many companies in the e-commerce sector are searching for space that can meet heavy power requirements and have high clear heights, in addition to being centrally located. They are becoming more specialised and less generic in design as well. With same-day delivery models becoming increasing popular, companies will continue to invest in industrial properties located near their clients or major transport facilities,” he says. “Overall, we expect the industrial real estate sector to continue to transform and lead the way, with e-commerce as its main driver.”

CONCLUSION

Online shopping was introduced to the market in the last decade as many individuals and organizations purchase through the World Wide Web. This project investigates the influence of the World Wide Web online trading on Malaysian daily life, and future trends of online shopping in Malaysia .A number of dot.com companies have been established in Malaysia and about ten thousand websites exist in Malaysia, but only an estimated 30% are capable of providing online shopping facilities for Malaysian consumers. The focus of this paper is on the demographics of the use of online shopping in Malaysia. This study explores the development, current status and future trends of online shopping in Malaysia as well as factors that influence the decision on whether or not to use this form of commerce. Research findings include which and how often online shopping applications are used by consumers in their daily life, the benefits online shopping brings to the Malaysian communities, and factors contributing to the popularity of Internet sites. Initiatives to raise online shopping by various parties are also studied.

Shopping online as an alternative to in-store shopping can make much of traditional retail less attractive. There exists an obvious relationship between e-commerce and the demand for commercial real estate that accommodates physical retail shops. Substantial evidence supports the idea that the demand for physical shops has been affected by the rapid development of e-commerce in China. In order to better understand the sustainability of the commercial real estate market in a context of rapidly developing e-commerce in China, this study seeks to clarify the relationship between e-commerce and the demand for commercial real estate. Methods of inductive and comparative analysis are adopted. The findings show that from 2009 to 2013, the slowing growth rate of commercial property sales and the accelerating vacancy rate of commercial properties are closely related to the dramatic growth of e-commerce. We also found that different forms of commercial properties–supermarkets, department stores and shopping centers–are differently affected by the rise of e-commerce. However, due to the respective advantages and disadvantages associated with online and offline shopping, physical stores will not be completely eclipsed by virtual retail shopping.

Reference

The Edge : E-commerce Set to Impact The Property Market

The Star Online : E-commerce Set for Growth

BOOK REVIEW….AND THE PURSUIT OF HAPPINESS - WELLBEING AND THE ROLE OF GOVERNMENT by Philip Booth

Philip Booth is Editorial and Program Director of the Institute of Economic Affairs and Professor of Insurance and Risk Management at Cass Business School, City University. He has written extensively on regulation, social insurance and Catholic social teaching. He is a Fellow of the Institute of Actuaries and of the Royal Statistical Society and associate editor of Actuarial Annals and the British Actuarial Journal. He has also advised the Bank of England on financial stability issues (1998–2002) and has been a visiting Fellow at Blackfriars Hall, Oxford University (2010/11). The idea put forward by the British government that economists and politicians pursue policies directed towards maximising GDP is a ‘straw man’. Government has always had a multitude of different objectives and government policy would be very different today if economic growth were the single priority. 

1.   In spite of general reductions in government spending, the prime minister has found room in the government’s budget to spend money on a major survey of what makes the British people happy. This will be used, in the prime minister’s own words, to guide government policy towards improvements in general wellbeing rather than improvements in national income.

2.         However, it is it really true that government policy has always been orientated towards maximising GDP? Is it true that wellbeing does not increase as income increases? Is it true that more equal societies are happier societies? Can we really improve wellbeing through workplace legislation? Is it right to orientate government policy towards the single aim of increasing aggregate wellbeing across society as a whole?

3.          These questions and many more are tackled by some of the leading intellectuals in the field. Overall, this monograph provides a substantial challenge to those who want to put the explicit pursuit of wellbeing at the heart of government policy.

4.         Explicit attempts by government to control GDP, or rapidly increase GDP growth, have normally failed. Such a target driven mentality is part of the conceit of central planning. Attempts to centrally direct policy towards improving general wellbeing will also fail.

5.         Contrary to popular perception, new statistical work suggests that happiness is related to income. This relationship holds between countries, within countries and over time. The relationship is robust and also holds at higher levels of income as well as at lower levels of income. This calls into question the assertion that people are on a ‘hedonic treadmill’ that prevents them becoming happier as their income rises beyond a certain level of income.

6.         This new work, using a data set of 126 countries, shows that the correlation between life satisfaction and the log of permanent income within a given country lies between 0.3 and 0.5. There is a similar correlation between growth in life satisfaction and growth in income.

7.         There is no evidence that equality is related to happiness. Indeed, the proponents of greater income equality admit that they are unable to cite such evidence and instead rely on very unsatisfactory forms of indirect inference. The clearest determinants of wellbeing would seem to be employment, marriage, religious belief and avoiding poverty. None of these is obviously correlated with income equality.

8.         The government is under pressure to bring in further legislation to promote ‘wellbeing at work’. This includes, for example, legislation on parental leave. The theoretical and empirical case for such legislation is weak.

9.         There is no relationship between objective measures of wellbeing at work and the extent of employment protection legislation, unionisation, and so on. Given the relationship between wellbeing and employment, any form of employment protection legislation that led to more temporary employment or reduced employment would be detrimental to wellbeing.

10.     A comparison across 74 countries finds that government final consumption negatively affects happiness levels and that the negative influence occurs regardless of how effective government bureaucracy is or how democratic the country is. Increasing government spending by about a third would cause a direct reduction in happiness of about 5 to 6 per cent. Centralising government decision-making is likely to lead to more intrusive government and lower wellbeing.

11.     If people wish to maximise their wellbeing and are the best judges of their own wellbeing they will take decisions about how to use their economic resources to pursue their own goals. We should allow people’s preferences for wellbeing to be revealed by their own actions rather than through surveys of what people say they prefer.

12.     Happiness measures are short-term, transient and shallow measures of people’s genuine wellbeing.

13.     Those who wish to use happiness economics in public policy have no effective way of determining whether an increase in wellbeing should be traded against justice, moral values or a decrease in freedom. It is a utilitarian philosophy which applies a principle that many might use in their own lives to the organisation of society as a whole. Applying such an overarching principle to the organisation of society as a whole is very dangerous.

14.     In conclusion, it is to be hoped that, when the Office for National Statistics concludes its studies, it will set great store by Bjørnskov’s empirical conclusions – backed up in less direct ways by the authors of other chapters in this monograph. Countries that inhibit the freedom of their citizens to a lesser degree have happier citizens. Paradoxically, therefore, wellbeing may be maximised if the government does not consciously try to pursue that objective specifically.

15.     This should not be surprising. The wellbeing policy activists accuse economists of focusing too much on the maximisation of national income as a government policy objective. This is a false accusation, but a lesson can be drawn from attempts by government to increase national income.

16.     It also happens to be the case that economic growth is higher when governments do not specifically plan for that end. In other words, the central planning of a society to achieve a particular desired end is likely to fail to meet that end, as well as changing completely the nature of the society.

17.     This is not to say that some useful policy advice cannot be found from the empirical work on happiness economics. It can tell us, for example – though we probably knew already – that policies that impede employment seriously affect wellbeing. Those authors whose chapters deal with the normative issues, however, make a very strong case in this monograph that government policy should not promote wellbeing explicitly.

THE SUSTAINABLE DEVELOPMENT GOALS: WHAT LOCAL GOVERNMENTS NEED TO KNOW?

THE SUSTAINABLE DEVELOPMENT GOALS : MURNInets

MALAYSIA : 3rd UNITED NATIONS CONFERENCE ON HOUSING AND SUSTAINABLE URBAN DEVELOPMENT (HABITAT III)

INTRODUCTION

“Habitat III” is shorthand for a major global summit, formally known as the United Nations Conference on Housing and Sustainable Urban Development, to be held in Quito, Ecuador, on 17-20 October 2016. Habitat III will be one of the first world summit of the United Nations after the adoption of the Agenda 2030 and the agreement on climate change COP21 in Paris. The United Nations has called the conference, the third in a series that began in 1976, to “reinvigorate” the global political commitment to the sustainable development of towns, cities and other human settlements, both rural and urban. The product of that re-invigoration, along with pledges and new obligations, is being referred to as the New Urban Agenda. That agenda will set a new global strategy around urbanization for the next two decades.The conference will be the first time in 20 years that the international community, led by national governments, has collectively taken stock of fast-changing urban trends and the ways in which these patterns are impacting on human development, environmental well-being, and civic and governance systems worldwide.

In 17-20 October 2016 Habitat III will bring together global actors in Quito, Ecuador after 20 years to build on the work of Habitat II in Istanbul in 1996 and Habitat I in Vancouver in 1976. The stated aim of Habitat III is to adopt a “New Urban Agenda”, meant to guide the actions of national governments in pursuit of more sustainable urbanisation. The new agenda is meant to draw from reports prepared at national and regional levels that outline the major urban challenges for those countries and regions, along with visions to be incorporated into said agenda. A key challenge that emerges is how Habitat III may build upon Habitat II commitments. In the Habitat II Agenda adopted in 1996, Heads of State and Government committed themselves to two main goals;

a.    Adequate Shelter for All; and

b.    Sustainable Human Settlements in an Urbanizing World

The United Nations General Assembly, in Resolution 67/216, decided to establish a preparatory committee to carry out the preparations for the conference open to all Member States of the United Nations and members of specialized agencies and of the International Atomic Energy Agency.  The Preparatory Committee (PrepCom), following the same resolution, will have three meetings before the opening of the conference. Indonesia will host the 3rd PrepCom, in 25-27 July 2016, a responsibility that puts the country at the forefront of engaged member states. In that respect, the General Assembly reiterated its appreciation to the Government of Ecuador for the offer to host the Conference and its gratitude to the Government of Indonesia for its offer to convene the Habitat III PrepCom3. It also expresses appreciation to the Government of Malaysia and the city of Kuala Lumpur for their proposal to host the ninth session of the World Urban Forum.

HABITAT III

The World Urban Forum is considered to be the foremost arena for interaction between different groups of stakeholders. The World Urban Forum in 2018 will be the first one to focus on the implementation for the New Urban Agenda. In the words of the Secretary-General of the Habitat III Conference, Dr Joan Clos, the text is a historic agreement of Member States towards more inclusive and participatory decisions within the United Nations system, as well as a true sign of the sense of responsibility in advancing decisions on outstanding issues for a successful, meaningful and action-oriented Habitat III Conference.  Dialogue among local authorities, stakeholders and national governments is the guarantee of an implementable New Urban Agenda.The Permanent Mission of Malaysia to the United Nations in New York had made the inquiries pertaining to this matter and was informed that the submission of the report is not compulsory for all member states.

However, Habitat III Secretariat will continue to receive the National Reports until the Habitat III Conference in October 2016. Member states are also encourage to finalize and submit the report before the holding of the Third Preparatory Committee meeting that will take place in Surabaya, Indonesia on 25-27 July 2016. On this note, given that we have 7-8 months until October, it is more than enough time to prepare such report.  The Ministry would highly encourage Malaysia to submit the report as this would show the seriousness of our commitment to the WUF9 that would be held in KL in 2018.  The preparation of the national report would also provide a good opportunity for KPKT to enhance coordination with agencies/ministries on urban issues. Habitat III will also offer a potent opportunity for the international community at all levels to harmonize its understanding of the problems and opportunities posed by current trends in urbanization. This includes poverty, quality of life, environmental degradation, climate change and other concerns on the one hand, as well as the economic, social and creative boons provided by cities on the other.

Global actors will be able to use the run-up to Habitat III to work toward agreement on a broad and collective approach to start to both address and capitalize on these issues. A significant part of the potential opportunity comes exactly from this breadth of discussion.  At the table in making this decision will be the nearly 200 national governments that make up the U. N. General Assembly. Yet they will be buttressed by a broad variety of crucial actors, including cities, the private sector and civil society. Still, the exact roles of these latter entities remain tenuous. While they will be able to offer formal recommendations, officially they are considered mere observers to the process. Ministry of Urban Wellbeing, Housing and Local Government (KPKT), in coordination with Federal Department of Town and Country Planning Peninsular Malaysia (JPBD), and other federal agencies, are leading Malaysia efforts to support Habitat III.

MALAYSIA AND HABITAT III

This year KPKT will be held the first convening of the Malaysia Habitat III National Committee. The committee, chaired by Secretary General of KPKT, includes a diverse representing other federal government agencies, regional and local officials, academia, philanthropy, and civil society. KPKT’s goal is to facilitate a dynamic and inclusive Habitat III preparatory process that engages the National Committee and other partners in an open dialogue and partner-led activities designed to:

a.    Promote open and productive dialogue on key challenges facing Malaysia cities and regions, and discuss opportunities to improve quality of life, sustainability, inclusivity, access to opportunity, and resilience efforts;

b.    Raise public awareness and engage local communities on housing, planning, and community development issues in Malaysia; and

c.    Uplift best practices and innovations emerging from rural, suburban, and urban communities across Malaysia.

UN-Habitat’s work and relationships with its partners are periodically examined in detail by the Governing Council, which is subsidiary to the UN General Assembly and serves as the intergovernmental decision-making body of UN-Habitat. It reports to the General Assembly through the Economic and Social Council, and its main functions are as follows:

a.    Setting UN-Habitat’s policies by developing and promoting policy objectives, priorities, and guidelines regarding existing and planned programs of work in the field of human settlements;

b.    Overseeing working relations with partners by closely following the activities of United Nations agencies and other international organizations in the field of human settlements, and proposing ways through which the overall human settlements policy objectives within the UN system might best be achieved;

c.    Approving UN- Habitat’s biennial work program and budget;

Member states The Governing Council meets every 2 years and is composed of 58 member states, which represent 5 regional groups. Member states are elected by the UN’s Economic and Social Council (ECOSOC) for a period of four years. Membership of the Governing Council of the United Nations Human Settlements Programme as from 1 January 2015. Total number of members: 58. Malaysia representative by Minister of KPKT  who  as appointed as a member of UN-Habitat Governing Council in 2 Feb 2016.Under resolution 24/14 of the UN-Habitat Governing Council titled “Inputs for and support to the preparatory process of the Habitat III, adopted at its 24th session, by which the Council invited Member States to prepare:

“before the first meeting of the Preparatory Committee for Habitat III, to be held in New York during the sixty-ninth session of the General Assembly, national reports which consider the implementation of the Habitat II agenda and of other relevant internationally agreed goals and targets, as well as new challenges, emerging trends and a prospective vision for sustainable human settlements and urban development, as a basis for the formulation of a “New Urban Agenda”, in line with paragraph 6 of General Assembly resolution 67/216” (paragraph 40)”

The National report structure outline describe what and how our  government, Local Authorities (including the capital or major city) and other sub-national governmental authorities, in partnership with stakeholders, have achieved, through the Habitat Agenda. This report also  describe the challenges experienced and lessons learnt in these areas, as well as future challenges and issues that could be addressed through a New Urban Agenda. Chapters will be included  in the report are :

a.    Chapter 1: Urban Demographic Issues

b.    Chapter 2: Land and Urban Planning

c.    Chapter 3: Environment and Urbanization

d.    Chapter 4: Urban Governance and Legislation

e.    Chapter 5: Urban Economy

f.     Chapter 6: Housing and Basic Services

g.    Chapter 7: Indicators

h.    Chapter 8: Case Studies and Policy Documents

CONCLUSION

Malaysia places a high priority on the development of more sustainable and inclusive communities due to our contribution to strengthen the economy, creating good jobs, using energy more efficiently, protecting the natural environment and human health. Through these efforts, Malaysia affirms that the components necessary to ensure the urban future include public-private partnerships, cross-agency and international collaboration, and improved networks across sectors that can help cities mobilize financial and other support for sustainable urban development. Malaysia is committed to participate in HABITAT III in order to demonstrate the benefits of a sustainable economic pathway for rapidly urbanizing communities.

United Nations Conference on Housing and Sustainable Urban Development