Fave’s 2020 business trends with actionable insights for retail merchants
By Digital News Asia January 21, 2020
- Cashback drives up to 70% of repeat customers; can optimise non-peak sales by 2.5x times
- Highest cashless payments recorded were in Georgetown & Taman Tun Dr. Ismail
FAVE, a Southeast Asian digital merchant platform released a new report, entitled "2020 retail trends in Malaysia: The merchant's guide to profit-boosting strategies & smarter business growth."
The report is based on analytical data compiled from more than 15,000 merchants across Malaysia on Fave's digital merchant platform, Favebiz between Jan 1, 2019 to Dec 31, 2019, and is supported with external research on digital payments in Southeast Asia.
[Ed: An earlier download of a pdf has been replaced with a link now.]
In line with the country's transition to a cashless economy, the report delves into the timely topic of empowering offline merchants to recognise the prevalence of digital payments in achieving sustainable growth.
Findings from the research revealed insights into industry trends shaping the cashless scene in Malaysia, spending behaviour of customers and the main drivers for cashless transactions in Malaysia. The five categories of insights identified in the report are:
Food and beverage (F&B):
Convenience and socialisation are why Malaysians crave spending time at physical restaurants where return customers contributed to 54% of sales for the year 2019, making customer loyalty a potential revenue stream. F&B merchants in Malaysia saw more traction from female diners at 63% within six months as compared to male diners at 37%.
Merchants specialising in healthy food offerings on Fave’s platform witnessed a 2.4X increase in cashless payments with returning customers generating 80% of sales. The highest cashless payments recorded were at health-food outlets in Georgetown, Penang and Taman Tun Dr. Ismail, Kuala Lumpur.
Cashless payments continue to accelerate growth in the retail space. Home & Lifestyle and Sports & Travel are in the top five highest-grossing retail categories.
Seventy-seven percent of total sales generated by new customers are mostly by women aged between 25 to 34 and the average retail spend is RM465, an increase of 65% compared to 2018.
Beauty & Wellness:
Beauty and wellness, in particular, experienced more significant growth than other verticals. Ninety-one percent sales for beauty & wellness services such as massage and pedicures were generated through deals showcased on Fave, mostly by women aged 25 to 34 with new customers acquisition driving the highest sales for beauty & wellness outlets on weekends.
Fitness speak is the new norm as healthy guilt-free meals continues its upward trend for urban dwellers. September saw the highest peak for health and fitness related deals especially on Mondays between 3 to 6pm.
Thirty-day gym access and zumba classes remain some of the most popular FaveDeals purchased by Malaysians. During the 2019 11.11 sale in Malaysia, among the top five highest grossing FaveDeals was a comprehensive health screening package.
Activities & Services:
The months of January and December 2019 saw a spike in travel-related FaveDeals especially to Banting, Port Dickson and Cameron Highlands. In terms of growth, FaveDeals brought in 54% repeat customers contributing to 89% of sales. In particular, Fridays are when Malaysians purchase the highest number of activities.
Commenting on the findings, Fave co-founder and chief executive officer Joel Neoh (main pic), said, "Our research shows that transformation is occurring across Malaysia's retail in response to changing customer preferences, advancements in technology and the evolution of payments.
“In a rapidly changing global environment, digital adoption is critical for merchants seeking to drive sustainable growth and remain relevant as competition increases and new ideas disrupt entire verticals. At Fave, we are continually innovating and pushing our boundaries to evolve and enable our merchants to meet shifting customer needs."
2019 bore witness to key business milestones across Fave’s platform. The cashless revolution has spread to 30+ cities across 13 states in Malaysia where merchants have received steady growth over the last five years in value of cashless transactions.
The rise in mobile Internet usage, e-wallets, and cashless payments are paving the way for digitally empowered merchants. An increasing number of offline merchants across various retail segments are recognising the potential of cashless payments in growing their business and are eagerly making the transition to take their business online.
Cashback remains one of most popular strategies for building customer loyalty and increasing repeat customers. Research from Fave indicates that cashback drives up to 70% of repeat customers and has the potential to optimise non-peak hours sales figures by up to 2.5x times.
Merchants can even slash up to RM50,000 a year in marketing costs with the use of cashback.
Merchants in Malaysia are gradually gaining a competitive edge by becoming more data-driven in their business decisions. Around 98% of merchants on Favebiz found uses for actionable data insights with one in three merchants being able to correlate insights to their marketing spend and strategy, resulting in higher ROI.
To date, Fave is available across 35 cities in Singapore, Malaysia, and Indonesia with over 30,000 merchants on its platform specialising in F&B, beauty & wellness, retail, services, fitness, travel. Over 4,000 deals go live daily, serving over two million active monthly users regionally.
Fave’s focus will be to strengthen its market share through continued merchants partnerships, and the expansion of new services ranging from mobile payments, customer loyalty, marketing solutions to financing in 2020.