The Covid-19 pandemic, much like previous crises in human history, is causing drastic and permanent changes in consumer behaviour and eventual digital adoption. In Malaysia, Facebook and Bain & Company has carried out a study titled “Digital Consumers of Tomorrow, Here Today”.
Based on the completed study, Malaysia recorded the highest percentage of digital consumers among Southeast Asia countries. For instance, Malaysia’s percentage of digital consumers stood at 83 per cent (15 years old and above), with 48 per cent switching to purchasing online last year (2019). It shows that Malaysia is keeping pace with Southeast Asia’s digital transformation.
The objectives and methodology of the survey
The main objectives of the study are to examine the fast-paced advancement in the digital economy and how it influences the outlook of e-commerce in Southeast Asia. The study took a sample population of approximately 16,500 digital consumers and gathered feedback through interviews with about 20+ CXOs. The six Southeast Asian countries involved were Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. The targeted digital consumers are those who have made an online purchase in at least 2 product categories in the past 3 months.
Results of the survey
The study presumed that almost 70 per cent (7 in every 10) of Southeast Asian consumers will favour digital transactions by the end of the year. The growth was initially forecasted for 2025 in the 2019 study that indicated a five-year acceleration within 2020. Bain & Company also said that digital consumer growth in ASEAN is expected to reach approximately 310 million by year-end.
The report discovered that online retail gross merchandise value (GMV) in Malaysia is expected to double from the US$4 billion (RM16.6 billion) to around US$9 billion (RM37.5 billion) by 2025. Online groceries in Malaysia also recorded the highest growth (2.2x) in online retail penetration in 2020 since 2018. In Malaysia alone, 4 million new digital consumers are expected in 2020.
E-commerce is becoming the main channel of businesses
From the results, we can see that online businesses or e-commerce have fast become the main channel for most businesses. Therefore, all businesses need to build a strong rapport with consumers and create in-person interactions to drive discovery and loyalty. This can be done through social platforms, messaging, and short videos.
Moreover, the report also found that enhancing brand reliability and standing out from the crowd becomes much more important than before. This is because consumers are more inclined to switch brands and rely more on e-commerce platforms.
Furthermore, the study reveals the limitless potential to build brand loyalty and growth as the e-commerce market remains fragmented. For instance, savvy consumers in Malaysia are shop-hopping across 4.8 online sites before making a purchase decision in 2020. This is a marked increase from an average of 4.2 sites in 2019.
Apart from that, most online consumers are still looking for better pricing (56 per cent) and product quality (34 per cent) when browsing across sites. Similarly, an average of 5 in 10 respondents said that reliability and value were the top two reasons when making a purchase online.
How Covid-19 has changed consumer behaviour in Malaysia and Southeast Asia
Southeast Asia is a fast-evolving region and is developing rapidly to be one of the top growth contributors for the global digital economy. The number of Southeast Asian digital consumers has grown exponentially and their consumption habits are shaping today’s new norm.
The Covid-19 pandemic is catalyzing the rapid swift of consumer behaviour from offline to online. For example, online purchasing and digital consumption have both risen drastically. This trend is expected to continue after the pandemic and will continue to grow at record-setting rates.
The crisis has provided the golden opportunity for traditional businesses, large marketplaces and disruptive business models to thrive. It has changed buying behaviour with a huge rise in e-commerce, Facebook Live, Messaging and Conversational Commerce.
The change is even more apparent in healthcare, education and online entertainment as it quickly advances to adjust to consumer’s home-consumption propensities. Among them are home-based learning, telemedicine and the sharp increase in preference for online gaming and live-streaming.
- Malaysia has the highest percentage of digital consumers in ASEAN
- Malaysia has the highest percentage of digital consumers in Southeast Asia
- Study: 5 years of digital acceleration compressed into 1, but loyalty remains an issue
- Digital advertising expenditure share of total media ad spending in Malaysia from 2015 to 2020
Prepared by: Chun Wai