LOCAL BUSINESSES FEELING THE SQUEEZE
At Sunway Velocity, an integrated commercial township on the outskirts of Kuala Lumpur, Nanjing Street is home to a cluster of Chinese restaurants, supermarkets and lifestyle stores.
Mandarin features prominently on shopfronts, menus and signboards.
Many of the businesses are run by Chinese nationals, while their customers include visitors from various parts of China.
Guangdong native Jason Li opened his first hair salon in Malaysia earlier this year after facing what he described as cut-throat competition in China’s hairdressing industry.
“Competition in China is incredibly intense, with hair salons everywhere,” said the hairstylist at DFH Hair and Beauty Salon, which is already planning more outlets in Malaysia. “I believe Chinese hairstylists can better serve local customers.”
His salon offers haircuts and hair washes for under US$10, while a perm and hair treatment cost about US$30. Its products are imported from China, and most of its staff are foreigners.
It also stays open until midnight – a few hours later than many Malaysian hair salons, which typically close by 8pm.
The growth of such businesses has unsettled some local operators, who say foreign entrants are undercutting prevailing market prices.
Malaysian Hairdressing Association president Ann Wang said Chinese operators are prepared to work exceptionally long hours while keeping prices low.
“They’re extremely hardworking and willing to put in long hours – some up to 18 hours a day,” she added. “Whether it’s a restaurant, hair salon or photo studio, their prices are very low. They don’t follow market rates.”
Wang wants the government to further raise financial barriers to entry for foreign operators to protect the domestic industry.
Entities seeking to expand are now required to undergo a social impact assessment.
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