Malaysia FMCG shelves under pressure as SKU launches increase

The country recorded over 12,000 new SKUs launched last year.

Competition for retail shelf space in Malaysia’s fast-moving consumer goods (FMCG) market is intensifying as thousands of new products continue to enter the market each year.

Speaking at the Retail Asia Summit Malaysia 2026, Natalie Lee, customer success leader at NielsenIQ Malaysia, said that about 12,540 new items were launched in Malaysia in 2025, a 6% increase compared to the previous year. These include genuine innovations such as new brands, flavors, and product concepts.

At the same time, around 10,000 products were delisted from shelves, underscoring the high churn rate within the FMCG ecosystem.

“What this tells us is that there are more choices for consumers to choose from,” said Lee. “The market is getting more fragmented, and market shares are getting diluted.”

Despite the surge in product introductions, Lee noted that the overall contribution of new items remains relatively small when compared to total FMCG value.

“There are more and more new products being launched in the market,” she reiterated.

Malaysia’s FMCG sector continues to expand steadily, with total tracked channels, including supermarkets, pharmacies, and drugstores—growing by 6.8%.

However, Lee pointed out that sales performance remains highly concentrated, with a small proportion of stock keeping units (SKUs) driving the majority of revenue across categories.

Breaking down category performance, Lee noted that snacks and confectionery and personal care account for the bulk of innovation activity.

Snacks and confectionery in particular remain amongst the most active segments in terms of both new launches and value contribution.

However, categories such as beverages show a different pattern, featuring a large number of SKUs but relatively low contribution to total sales, often below 1%, she noted.

Lee also stressed that winning products do not necessarily require full national distribution to succeed. She pointed out that some top-performing SKUs achieve strong sales even without reaching 100% distribution coverage, instead relying on targeted placement and strong consumer relevance.

Looking ahead, Lee noted the growing role of data and artificial intelligence in helping companies address this increasingly competitive shelf environment.

She said that AI-powered analytics can help brands understand consumer preferences, optimise product formulations, and improve innovation success rates before launch.

Lee said that FMCG success is no longer just about launching more products, but about ensuring the right products survive and perform in an increasingly crowded marketplace.

“Assortment matters, because there are more products on the shelf versus those that can be delisted,” she said.

Brands also need to strengthen their market positioning to stand out amidst rising competition, whilst leveraging AI to accelerate and improve innovation testing, Lee said.