Malaysia leads SEA in digital consumption: Facebook, Bain & Co

  • Malaysia leads in the region with 88% of digital consumers
  • Digital spending per person up 47% compared to 2020

Malaysia leads SEA in digital consumption: Facebook, Bain & Co Malaysia leads the Southeast Asian region with the highest percentage of digital consumers (88% or 22 million people) and where 90% of consumers is expected to digital by the end of 2021, according to Facebook and Bain & Company.

In a statement, the companies said over 2,142 Malaysians digital consumers surveyed are those who have made an online purchase in at least two product categories in the past three months and are above 15 years of age.

The data comes from its annual SYNC Southeast Asia report, which is based on a survey of approximately 16,700 digital consumers and gathered insights from interviews with over 20 CXOs across Malaysia, Indonesia, Philippines, Singapore, Thailand and Vietnam.

The report which looks at the digital economy and the future of e-commerce in the region, both companies said.

According to the poll, Malaysia digital spending per person is up 47% compared to last year, with overall e-commerce sales set to further increase by 1.3 times by 2026.

It said that Malaysian consumers are not only spending more online as forecasted in 2020, but there is also a continued accelerated adoption of online as a channel for shopping with 46% of them using online as a primary purchase channel. 

The survey noted that consumers are open to discovery of new products and services with 63% of them saying they don’t know what they want to buy when they go online and 44% saying they had tried new online stores this year that they’d never heard of before.

They are also buying an even wider range of categories online with an average of 7.6 categories than the five average seen in 2020 (52% increase), it added.

“Digital transformation is here to stay and Malaysia is taking the lead to be the most digitized nation in Southeast Asia,” said Nicole Tan, country director, Malaysia at Facebook.

“As consumers' purchase journey and digital lifestyle is evolving, it’s important to reimagine consumer engagement as it presents opportunities for businesses to build their brand and be connected to consumers on what matters most to them,” said Tan. 

Markets fragmented

Facebook also said the study shows the immense potential to build brand loyalty and growth as the e-commerce market remains fragmented. 

In 2021, it said savvy Malaysian consumers are shop-hopping across seven websites before making a purchase decision, a notable 1.8 times increase from an average of 4.8 sites in 2020.

Consumers are also becoming environmentally conscious with over 87% of those surveyed saying they are willing to pay more for sustainable and socially responsible products, with some 77% of consumers willing to pay up to 10% premium for such products.

In fact, the poll suggested environmental impact as one of the top three reasons for Malaysian consumers to switch brands apart from value for money and quality of product, the report indicated.

Meanwhile, the home-centric lifestyle is getting more entrenched in Malaysia. While some believe that the shift to digital is temporary, the report predicts it is here to stay, especially for dining and shopping. 

Some 75% of respondents said they will continue spending time at home post Covid, with 68% of the time spent shopping online at home.

Also, digital discovery is crucial, with 79% of Malaysians using online channels as the primary channel for discovery.

Social media remains the number one online discovery channel in Malaysia, with social videos dominating in popularity, three times more than previous year (22%), the poll said.

When it comes to evaluation, 81% of Malaysians turned to online channels to find more information about a product or service, whilst social media is mainly used for product reviews while brand sites emerge as a new source of evaluation, it added.

Online influence

The report highlighted that on brand consideration, online channels pose a stronger influence of 71% versus 29% for offline channels.

“We hope to be able to help businesses ramp up their digital transformation and rewrite their digital first strategy. It is now the time for businesses to be bold and creative in experimenting new ways to meet the new digital consumers of today and be discovered,” Tan said.

“The past year of agile decision-making has certainly paid off for brand owners and platforms. Forty seven per cent more consumers in Malaysia have switched to online channels as their most used channel across categories, with the most significant increase in groceries and furniture,” said Gwendolyn Lim, partner at Bain & Company. 

Lim said consumer goods companies can expect further headroom for growth and take advantage of Southeast Asia’s behaviours.

The most successful brand owners will focus on strategies to both capitalise on a post-pandemic digital boom in the region and insulate themselves from ensuing digital disruptions, she added. 

On what’s to come, the report found that over 80% of venture capital funds are flowing into the internet and technology sectors - particularly fintech, edtech and healthtech.

The report suggests that disruption may be more apparent in healthcare and education as they rapidly evolve to adapt to consumer’s home-consumption habits such as home-based learning and telemedicine.

 

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