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Since the mid‐1990s, there has been a rapid expansion of large‐scale foreign retailers in many countries across Southeast Asia, Central Europe and Latin America. This emerging trend has triggered a number of research interests on the issue of retail globalization. The research aims to consider the entry of foreign hypermarkets in Malaysia and their impact on the development and growth of domestic suppliers and manufacturers.

This study uses both primary and secondary data. Secondary data were drawn from industry sources which included government departments, economic reports, retailing magazines and companies, web sites. Meanwhile, primary data are collected using mail survey questionnaire and face‐to‐face interviews.

The findings of this study indicate that foreign hypermarkets play a very important role in the development and growth of the domestic suppliers via backward linkages. The main forms of linkages are product supply, informational linkages, assistance with inventory management, technical support and quality assurance and procurement systems. A majority of the firms indicated that they benefited substantially from the presence of foreign hypermarkets; however, they also face several challenges brought about by imposition of several unfair terms and procurement policy.

The findings are largely derived from the experience encountered by domestic firms who participated in the survey. Thus, it is believed that their views could definitely help all the parties including the policymakers and researchers to better understand the impact of foreign hypermarkets on local businesses and take appropriate policy measures.

The term success in this paper is measured by the yardstick of both material and non‐material ones. This study attempts to examine the success story behind Malaysia's development with evidences drawn from both the conventionally used criteria together with the Islamically motivated universal values and ethos. Of the conventional factors, political consolidation of the first Prime Minister in the presence of dynamic enterprising ability of the Chinese as well as South Indian Community based on family values played a pivotal role in creating a foundation for development. The majority Malays, on the other hand, being the victim of colonial legacies and multi‐farious historical phenomenon were by‐passed. Subsequently, the big bargain of 1957, the year of independence by way of securing Malay special rights in the constitution laid the foundation for new strategy of development based on distributive justice. The New Economic Policy with the twin objetives of eradicating poverty and restructuring society could not have been implemented in the absence of universal values such as loyalty, tolerance, sympathy, caring and sharing being demonstrated by all the races regardless of socio‐economic and political superiority. This paper thus argues that from the very beginning the committed and pragmatic leadership, policy continuation, policy dynamism and policy flexibility, among many others, acted as a catalyst for the success story behind Malaysia's development.