Distributive trade encompasses wholesale and retail trade, hypermarkets and supermarkets, department stores and direct selling, franchising (regulated under the Ministry of Domestic Trade and Consumer Affairs, MDTCA), and other petroleum-related projects approved under the Petroleum Development Act, 1974.

In 2020, a total of 613 projects were approved with investments of RM3.7 billion. Foreign participation made up the bulk (79.7%) of investments with most of them concentrated in wholesale and retail trade. The approved projects will generate more than 18,000 job opportunities, making it the largest employer within the services sector.

To revive domestic demand and assist the sector, MDTCA launched the ‘Buy Malaysian Products’ campaign and the ‘Mega Sales Programme’ initiatives in July 2020. The pandemic also amplified the need for brick-and-mortar retail businesses to extend their service offerings online and embrace e-commerce activities in order to thrive during these challenging times. To support these efforts, the Government introduced the Automation Capital Allowance (Automation CA) for the services sector and the Smart Automation Grant (SAG), under MIDA.