By Song Hock Koon
It should not be a surprise to anyone, but Malaysians love retail therapy. Most major malls experience high footfall not just on weekends or public holidays but on a daily basis. Of course, this changed when the COVID-19 pandemic hit Malaysia and the country was placed under Movement Control Order (MCO) to curb the spread of the virus.
While shopping malls were deserted and devoid of footfall, that didn’t mean Malaysians stopped shopping. With the new normal came new shopping habits, which could prove to be a boon for Malaysian businesses embarking on a journey towards digitalisation because Malaysians have shifted their retail therapy sessions towards buying online on sites selling their favourite brands and products.
In a recent study titled ‘Digital Consumers of Tomorrow, Here Today’ conducted by global management consulting firm, Bain & Company and Facebook, Malaysia recorded the highest percentage of digital consumers in Southeast Asia, with 83% of its population (15 years old and above), counted as digital consumers in 2020. Furthermore, compared to 2019, which saw 25% of Malaysians moving to mostly online shopping, this year, that percentage went up to 48%.
The study also noted that Malaysians are not just spending more money through online shopping compared to 2019, but they are also spending more on different categories. In 2019, Malaysians made purchases in an average of 3.9 categories, which has now increased to an average of five categories.
One of the biggest categories that saw the biggest increase in sales is groceries and household supplies. According to the study, it recorded nearly three times the sales compared to last year. This could, of course, be boiled down to the fact that Malaysians were homebound during the MCO period and these were daily essentials, but it nevertheless presents another new opportunity for local businesses to tap into new customers.
The PENJANA Push
Like many other countries, Malaysia’s economy took a hit due to the pandemic and restricted movement of the public. In its bid to support the government to boost the economy, Malaysia Digital Economy Corporation (MDEC) had been tasked to carry out the PENJANA Micro and SMEs (MSMEs) E-Commerce Campaign and PENJANA Shop Malaysia Online under the National Economic Recovery Plan (PENJANA). Both of these ran from June and August respectively until the end of September 2020.
MDEC managed to gain the cooperation of 20 e-commerce partners to enable them to become digitally-powered businesses through the implementation of the PENJANA MSMEs E-commerce Campaign. The participating partners collectively matched the government’s RM70-million allocation under this campaign benefitting new and existing MSMEs through onboarding training, seller subsidy and sales support.
The PENJANA Shop Malaysia Online campaign saw MDEC partnering up with 22 e-commerce platforms to spur economic recovery by stimulating online consumption. With the aim to further encourage new and existing e-commerce consumers to increase their spending from local online sellers, this campaign has benefited consumers nationwide through digital vouchers and amazing discounts given out on various participating e-commerce platforms.
What Consumers Really Want
This shift towards online retail therapy is expected to be more than a momentary trend as Malaysians are digitally skilled now and more willing to purchase items they want and need from online retailers. Furthermore, with e-commerce getting the aid and support from the Malaysian government, it will undoubtedly continue to grow.
However, this also means MSMEs and entrepreneurs will have to pay close attention to what Malaysians want from their online vendors. Online shoppers are more open towards switching brands and aren’t exactly particular about who they purchase an item from. Most customers mentioned that they are willing to switch due to better pricing and even better product quality. This means businesses will have to be more innovative to retain the loyalty of their customers.
When asked about brand loyalty and if she had a preferred shop on her favourite platform, avid online shopper Maisarah Ramli said “No, I rarely have any brand loyalty. What influences my purchasing decision is really just the price, reviews and the overall shopping experience – I want to get the best deals possible.”
On the other side of the fence, Ed Lim said “Yes, I do have a few favourites actually and the reason why I keep going back to them is because I am quite satisfied with their services as well as products offered.”
Adding on to the challenge, other than the competition locally, businesses will also have to contend with international vendors. This will prove to be a big hurdle as international vendors usually offer unique items at a competitive price, which can be quite enticing. Even if the shipping period may take longer, Malaysians are willing to wait.
“I prefer to buy from local vendors if I need or want the item to be delivered fast so I would usually buy items deemed essentials from local vendors. However, I also do purchase items from international vendors especially if I don’t need it urgently or if it is significantly cheaper compared to local vendors,” said Denise Tan.
“I don’t have a specific preference, but local purchases are usually preferred for items which require greater warranty such as gadgets or electrical appliances. At the same time, if the item I want isn’t available locally, then I would have to purchase it from an overseas seller,” added Lim.
Which is why, for savvy MSMEs and entrepreneurs, it will pay dividends if they took the time to survey the market and offer Malaysian products that are truly unique and cannot be bought elsewhere. Not only will this enable Malaysians to easily purchase what they are looking for but it also offers businesses to expand beyond Malaysia.
“Batik! I once purchased some beautiful batik garments from an online boutique as presents for my friends from abroad. I was surprised at how easy it was to actually choose the designs and get the right sizes for my friends as the shop owner was very helpful. These were really special as my friends wouldn’t be able to get them anywhere else,” exclaimed Abdullah Salleh.
Offering something unique to consumers is one thing, but Malaysian consumers also want their vendors to be responsive, responsible and helpful. It’s similar to being in a brick and mortar shop, it’s the experience and warmth it provides you that keeps you going back.
“Overall, I’ve had more positive experience shopping online than negative ones. Most businesses I purchase from have been really nice. Earlier this year, I purchased a pair of gaming headphones and a day after I made the payment, a personnel from the shop actually called me to inform me that the model I picked were older ones and that they were willing to “upgrade” them to a newer model for me with no extra charges. He also took the time to explain to me the differences between both models. I appreciated what they did and now I constantly go back to them for purchases,” said Iskandar Karim when asked about the most memorable shopping experience he has had online.
We’re in this Together
With foot traffic to most physical stores reduced significantly causing accelerated shift towards online shopping, it is now imperative for MSMEs to have an omnichannel approach to their business and to provide consumers with more than one avenue to purchase what they need and want, especially via e-commerce.
By going digital, it opens up more opportunities for local MSMEs to tap into e-commerce potential, which falls in line with MDEC’s PENJANA’s MSMEs E-commerce Campaign and PENJANA Shop Malaysia Online’s objective to help businesses overcome the tough times brought on by the pandemic and to give those who lost their jobs a way to earn a living through driving higher online consumption.
For many Malaysians, the pandemic was a turning point in their lives and there have been so many stories of professionals losing their jobs and businesses experiencing revenue loss. Businesses have to look into maintaining their online storefront by jumping into the e-commerce bandwagon, working with trusted e-commerce partners who can help them sustain and elevate their online business.
Consumers and local businesses are essential to the nation’s economic growth and people’s livelihood. By helping Malaysian sellers through driving higher online consumption, we hope to bolster Malaysians’ confidence amid the COVID-19 recovery. As the nation is going through the recovery phase, supporting local businesses is paramount and consumers choosing to shop local is a way to support local businesses, helping them and their families in these challenging times.
For post-PENJANA e-commerce initiatives, digitalisation success stories and to stay plugged into various e-commerce programmes, visit www.go-ecommerce.my for more information.
Song Hock Koon is Director of eCommerce at Malaysia Digital Economy Corporation (MDEC).
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