Identification Of The Product In The Target Market: River Island In Malaysia

Identification of the Product in the Target Market

The advancements in the current business world depict the significant changes in the consumer demands and product specifications. The business marketers thus look forward to most suitable strategic help that can ensure the higher profitability for the long run. Business expansion is one of the fruitful strategies that have the considerable benefits for the business marketers to get hold of the foreign markets. However, Zamberi Ahmad (2014) implied that business marketers need to identify the most preferable market entry strategy and obtain the adequate knowledge to establish the competitive position in a foreign market. The study would thus concentrate on the business expansion in Malaysia for establishing the fashion retail product of River Island. The company has the online presence in the country, but there is no store where the customer can visit to select their clothes. Hence, the study would conduct the environmental analysis to identify the suitability and acceptability of the products by the consumer in an Asian market. The idea of the external opportunities, trends, and challenges would also be discussed in this study.

River Island, the renowned fashion retail brand is looking forward to expand the business market in Malaysian market. The company has almost 60 years of experience in the fashion retailing sector (, 2017). It has achieved the commendable position in the high competitive market of UK. It is one of the most demanding clothing brands that produce high quality clothes with an affordable pricing structure. Most of the fashion-prone customers are quite attracted to the brand value and the diverse fashion segments offered by the company. The customers are quite relied on the great going-out looks and the fashionable occasional wear available in the stores of River Island. After establishing the commendable position in the UK market, the company is now looking forward to expand their business in Malaysian market. The company already has the online presence in the country, but currently, the company needs to open the shops in the supermarket areas of the Malaysian cities. It is thus necessary for the company to identify the basic demands and requirements of the target consumers in order to understand their fashion segments.

The fashion segment in Asian countries is quite different to other countries. Therefore, while expanding the business, it is essential to conduct a complete market research to understand the environmental impacts and market needs. It has been observed that the customers in the Malaysian market are much fond of shoes, shoe care products, fashionable clothes, leather goods, and accessories like scarves, hats, and gloves (, 2017). The following statistics would provide the insights of the fashion demands in Malaysia.

PESTLE Analysis of Malaysia

The statistic report structured above highlights the market demands from the years of 2011 to 2013. It also forecasts the assumptions for 2018 as well to identify the possibility of sustaining in the market. The extensive market research on the Malaysian clothing industry highlights that if River Island can offer the fashion segments as per the demands of the local customers in Malaysia, the company has the significant growth opportunity in the country.  The statistic data also highlights that the market demands of the Malaysian clothing sector has reached up to 3.9 billion US dollar, which is quite opportune for the outside business marketers (, 2018). However, gathering the extensive knowledge about the environmental effects would determine the possibility of business sustainability for a longer time.

The PESTLE analytical tool describes the external market scenario for establishing any new business. River Island is the UK based fashion retail company that is looking forward to expand the business in Malaysia by offering the fashionable clothes to the local people. The following description would provide the ideas about the impact of external market on business in Malaysia.

PESTLE Analysis

Political Impact

Malaysia is a democratic country with a high degree of stability. Barisan Nasional Party has been ruling over the country from last 25 years. The stable political condition is quite opportune for River Island to establish the market in the domestic market of Malaysia.

On the contrary, it has been observed that the political scenario is highly corrupted due to which it might become a considerable barrier for the foreign market as it may increase the costs and cause problems (Crinis, 2017).

Economical Impact

The vibrant economic structure of Malaysia is quite beneficial for the foreign market. The economic growth has increased up to 7% yearly percentage in average over the last 10 years (Leshkowich, 2016).

Moreover, the locations in Malaysia are quite ideal for the international trade since the GDP rate is quite higher. In addition to this, the export business in Malaysia has captured almost 37% of the overall GDP rate that has helped the country in achieving a healthy surplus in the economic structure (Hassan et al., 2016).

This growing economic structure is much favorable for the foreign business like River Island. The statistic result also showed increasing demands for the fashion clothes that has the created the ways to gain profits in the Asian market.

Social Impact

The population of Malaysia consists of three main groups, such as Chinese, Malay, and Indian. The involvement of these various cultures has made the country much vibrant and rich culturally. It even created the racial harmony since the mixed cultural populations exist peacefully in this country.

It has been observed that the people in the country have been maintaining the Islamic religion (Fatimah & Hamid, 2015). The Malay Muslims are bound by the Islamic laws whereas the rest of the people are allowed to preach any religion of their choice. Therefore, it can be assumed that the people from diverse cultural background would demand for the product differentiation as per their trends and fashion choice.

River Island thus needs to keep the concentration on the product variations as per the requirements of the customers. When the company can offer the preferable products to the target market, it would be beneficial in developing the sustainable position and earning more profitability as well.

Technological Impact

Malaysia is still developing in the technological field. As compare to the international country, it has been observed that Malaysia lacks the complete advancements in the technicalities. The Multimedia Super Corridor was introduced by the Malaysian Government in the year of 1996 (Jan & Abdullah, 2015).

This strip of land stretch from the central business district of Kuala Lumpur to the outside location of Kuala Lumpur International Airport. This corridor is much spacious and can host more than 360 multinational companies (Von Vorys, 2015).

It continued the expansion in the technological market to attract world-leading ICT companies. The country is even moving forward to establish the advanced educational system by establishing Cyberjaya. This Cyberjaya is a self-contained intelligence city that has the greatest IT infrastructure.

This destination is quite favorable for providing the business support service and creates the best outsourcing in the world (Kay, Youtie & Shapira, 2016). Therefore, River Island can avail the technological opportunities to derive the best profits from the customers in Malaysia.

Legal Impact

The Malaysian legal system is mainly following the British Common Law though Islamic law is already applied to the Muslim population (Shamsul, 2015).  The investment of the firms is quite advantageous due to the encouraging British Law element. The country is even familiar to such laws, which is an advantage for the business marketers (Kumar, 2015).

However, in spite of imposing the British Law, some of the rules are also broken that may create barriers for the foreign business marketers. It is thus necessary for the company to maintain the legal aspects for fulfilling the business requirements.  

Environmental Impact

It has been observed that the continuous and frequent development occurred within Malaysia came up with high costs. This negative externality is quite disadvantageous for the business entities. In fact, the data extracted from UN indicates that the deforestation rate in Malaysia has been increasing in a faster rate in compare to the other tropical country (Abdullah, Jali & Ibrahim, 2017).

The country even has lost average of 140,200 hectares, which is 0.65%of its entire forest area since the year of 2000 (Alam et al., 2015). Majority of the rainforest is now stored for the production of palm oil. This palm oil is used for the source of bio-fuel and processing food. Therefore, it would be quite challenging for River Island in manufacturing clothes in Malaysia.

The company needs to consider the environmental welfare by reducing the waste. Moreover, the company even needs to pay focus on developing the sound corporate social responsibility to protect the environment from creating damage.   

Table 1: PESTLE Analysis

(Source: Kamaruddin & Kamaruddin, 2017)

The impact of the external environment is thus ensuring whether the company can survive for the long term basis. Moreover, the growing economic opportunity is also indicating that the customers in the Malaysian market can accept the fashion segments offered by River Island if their requirements are met. In the further section of the study, the considerable opportunities, trends and the threats would be analyzed to understand the probability of the company in entering Malaysian market.

The considerable opportunities, trends and threats are listed below:

Opportunities, Trends, and Challenges

1. Opportunities

· Third position in GDP among ASEAN economies, which is US$10,000 per capita.

· Emerging economies

· Stable government

· Support from capital city Kuala Lumpur

· Mix Culture

2. Trends

· Demands for fashionable garments

· Influence of the Islamic wears

· Changing style in fashion segments

3. Challenges

· Environmental Degradation

· Influence of Global uncertainties, such as Brexit, terrorism, and geopolitical instability

· Continuous changes in demands of the consumers

· High competition

Table 2: Opportunities, Trends and Challenges

(Source: Kay, Youtie & Shapira, 2016)

Malaysia is considered as the wealthiest emerging economies among all other countries in Asia. In spite of the smaller population, the country has achieved the significant growth in economic structure with the help of the industrial businesses. It has captured the third position in GDP among ASEAN economies, which is US$10,000 per capita (, 2017). The capital city Kuala Lumpur welcomes the foreign business investors to ensure growth in the economic structure. The customers are quite fond of the fashionable segments with the variations of the fashion garments and accessories. The growing demands for fast fashion brands and various styles of fashionable clothes would be much beneficial in deriving more profits. On the other hand, it has been observed that the stability of the government is also much helpful for the foreign business marketers to invest a large capital amount (Yeon et al., 2016). Therefore, it can be assumed that River Island has the growing opportunity for boosting up their sales on fashion segment. However, it is still necessary to understand the basic requirements and choices of the customers when they purchase the fashion accessories. The cultural mix is also much opportune for the company to develop a strengthened base for a longer period.

There are some of the basic trends observed in Malaysian market. It is observed that the market volatility is quite courageous for the business marketers. However, the continuous threats from the geopolitical instability, influence of Brexit, terrorism, and stalled trade deals are quite challenging as well. These uncertainties have created barriers in the global economy. The revenue in the fashion retail market is expected to reach up to almost US$5,485 by 2018 (Abdullah, Jali & Ibrahim, 2017). The gradual growth is foreseen, which is quite opportune for the market entry. The ‘women’s and girl’s apparel’ has the higher scope of increasing revenue in the fashion retail sector. The growth of almost 7.3% is quite favorable for the foreign marketers to establish a fashion store in the country (, 2018). However, in order to manufacture the clothes, it is necessary to maintain the high level of corporate social responsibility. However, the high competitive market is also quite threatening for the foreign fashion retail company. The reports related to the environmental degradation in Malaysia are quite disadvantageous for the foreign marketers. Therefore, it is necessary to develop the effective strategic decisions for mitigating such challenge and prevent the environmental damages.

Obtaining ideas from the above analysis indicates that River Island needs to identify the most suitable strategy to enter the Malaysian market by concentrating on the opportunities, threats, and trends. The company has the online presence in the country, but there is no store where the customer can visit to select their clothes.  It can be specified that in order establish the fashion retail segment in Malaysian market, the company can establish partnerships with the local retailers. The local retailers are quite aware of the local government, requirements of the consumers, and business ethics within the country. Hence, it can be implied that the company can select the “partnership” strategy for entering the market of Malaysia.


The study develops the external environmental analysis of Malaysia in order to analyze the market acceptability of fashion retail products of River Island. The growing economy and stable government is quite beneficial for the company to establish the physical clothing stores. On the other hand, the environmental challenges as well as the market competitions are the significant threats for the foreign business. The customers are quite fashion-prone, which is much opportune for the company to offer the fashion accessories and clothes in an affordable price. However, it is necessary to adopt the ‘partnership’ strategy with the local store to understand the basic needs of the customers along with the legal rules imposed by the government or any political party.


Abdullah, H., Jali, M. R. M., & Ibrahim, F. W. (2017). The Current State of Malaysia’s Journey towards a Green Economy: The Perceptions of The Companies on Environmental Efficiency and Sustainability. International Journal of Energy Economics and Policy, 7(1).

Alam, A., Azam, M., Abdullah, A. B., Malik, I. A., Khan, A., Hamzah, T. A. A. T., … & Zaman, K. (2015). Environmental quality indicators and financial development in Malaysia: unity in diversity. Environmental Science and Pollution Research, 22(11), 8392-8404.

Crinis, V. (2017). Global commodity chains in crisis: The garment industry in Malaysia. Institutions and Economies, 61-82., (2017). Apparel Accessories in Malaysia. [online] Available at: <> [Accessed 19 Jan. 2018]., (2017). Malaysia – Market Entry Strategy | [online] Available at: <> [Accessed 19 Jan. 2018].

Fatimah, S., & Hamid, A. (2015). Factors Influencing Youth Purchase Intention Towards Luxury Fashion Brands.

Hassan, S. H., Hassan, S. H., Harun, H., & Harun, H. (2016). Factors influencing fashion consciousness in hijab fashion consumption among hijabistas. Journal of Islamic Marketing, 7(4), 476-494.

Jan, M. T., & Abdullah, K. (2015). Fashion: Malaysian Muslim Women Perspective. European Scientific Journal, ESJ, 11(10).

Kamaruddin, A. R., & Kamaruddin, K. (2017). Malay culture and consumer decision-making styles: an investigation on religious and ethnic dimensions. Jurnal Kemanusiaan, 7(2).

Kay, L., Youtie, J., & Shapira, P. (2016). Inter-industry knowledge flows and sectoral networks in the economy of Malaysia. Knowledge Management Research & Practice.

Kumar, R. (2015). The forest resources of Malaysia: their economics and development.

Leshkowich, A. M. (2016). Muslim Fashion: Contemporary Style Cultures, Reina Lewis (2015. International Journal of Fashion Studies, 3(2), 323-326., (2017). About Us. [online] River Island. Available at: <> [Accessed 19 Jan. 2018].

Shamsul, A. B. (2015). One State, Three Legal Systems: Social Cohesion in a Multi-ethnic and Multi-religious Malaysia. In The Sociology of Shari’a: Case Studies from around the World (pp. 17-30). Springer International Publishing., (2018). Malaysia: clothing market demand 2018 | Statistic. [online] Statista. Available at: <> [Accessed 19 Jan. 2018].

Von Vorys, K. (2015). Democracy without consensus: Communalism and political stability in Malaysia. Princeton University Press.

Yeon, A. L., Abdullah, S. A. J., Arshad, R., Ayub, Z. A., Azhar, A., & Suhaimi, S. (2016). Youth knowledge on the law of youth development in Malaysia. International Journal of Social Science and Humanity, 6(5), 336.

Zamberi Ahmad, S., (2014). Small and medium enterprises’ internationalisation and business strategy: some evidence from firms located in an emerging market. Journal of Asia Business Studies, 8(2), pp.168-186.

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