What Made Malaysian Online Shoppers tick during Q4 2019?
Q4's always a great time for sales, but what in particular, drives Malaysians to go on a spending spree? Find out here!
December 6, 2019
It’s well known that Malaysia’s a power house in eCommerce in Southeast Asia, but what drives consumers to purchase during the Q4 peak periods? But before we dive into that, it’s good to revisit the statistics.
The Digital 2019 Malaysia report1 conducted by Hootsuite and Wearesocial reveals that of the country’s population of 32 million, 26 million are active internet users. Around 80% of Malaysian users between the ages of 16 and 64 are already shopping online with 91% of them searching online for a product or service to buy.
Malaysians spend considerably more on eCommerce than their Southeast Asian counterparts, except for Singapore. Forecasts are also positive as eCommerce spending grew by 24% last year and the government is putting in the structure to grow the online economy, such as through the National eCommerce Strategic Roadmap (NeCC) programme.2
According to Statista3, the total revenue in Malaysia’s eCommerce sector is estimated to amount to about RM15.4 billion (US$3.6 billion) for the year 2019. At the present pace of growth, total revenue is expected to see a CAGR of 11.8% over the next five years, resulting in a total market volume of about RM24.1 billion (US$5.7 billion) by the end of 2023.
Malaysians shop online at all parts of the year, but the second half of the year is where shopping activity really ramps up. According to empirical data from Shopee4, this is the trend considering all the major online sales campaigns happen in Q3 and Q4. This includes the popular 9.9, 10.10, 11,11, and 12.12 sales.
As an eCommerce merchant, Q4 is the perfect opportunity to expand your online presence in Malaysia. But considering the number of online marketplaces and stiff competition during this time of year, it’s important that you also understand what makes the Malaysian consumer tick during Q4. Before we get to some tips, here are some important consumer insights.
Online Consumer Trends in Malaysia
Popular eCommerce Marketplaces
When it comes to where Malaysians shop online, the top eCommerce platforms remain consistent with the rest of Southeast Asia. Shopee, Lazada, and Zalora are the go-to sites when it comes to online shopping, with Shopee sitting on top with over 26 million web visits per month.
There are, however, some local players keeping the eCommerce giants on their toes. These include Lelong, PG Mall, and GoShop sneaking into the top 10.
According to iPrice5, these are the top five eCommerce marketplaces in Malaysia as of 2019:
Shopee (25,789,300 monthly web visits)
Lazada (18,251,600 monthly web visits)
Lelong (2,223,000 monthly web visits)
Zalora (1,314,700 monthly web visits)
PG Mall (876,199 monthly web visits)
While listing on these marketplaces could be a good idea, what’s better is to see how these platforms are handling their promotions and campaigns this Q4 and what we can learn from them.
Top Product Categories
According to the same report by Hootsuite and Wearesocial, Malaysian eCommerce spend by category are as follows:
Travel services, including accommodations (US$ 2.759 billion)
Growth was good within the consumer goods category as all sectors grew by at least 25% year-on-year. In terms of the categories that grew the most, food and personal care (+39%), toys, DIY, and hobbies (+33%), and furniture and appliances (+30%) all experienced the most significant development. This is good news for eCommerce merchants from nearly all verticals as it means that there’s still healthy growth to look forward to overall.
The types of items purchased varies depending on where the shoppers are staying. Shoppee noted in a New Straits Times6 report that almost a third of purchases in Perlis, Kedah, Penang, and Perak consist of FMCGs such as toiletries. Conversely, toys and products for babies and children characterised sales on the east coast of Lelanatan, Pahang, and Terengannu.
In Johor, Melaka, and Negri Sembilan, most shoppers were male, and their most viewed items were floral shirts, blazers, and bomber and leather jackets. In Sarawak, Sabah, and Labuan, mobile phone related accessories led sales. eCommerce merchants should take these locations and their consumer preferences into consideration for the upcoming holiday sales.
The Malaysian Shopper
The Hootsuite and Wearesocial report also revealed that 39% of Malaysians (aged 15 and above) makes online purchases, but the internet is vital to almost every shopper. The majority of internet users all rely on the internet to do some form of shopping-related activity, whether it’s researching or browsing for a product or service to buy to actually buying a product online.
Based on the report, Malaysian eCommerce usage by activity was as follows:
Searching for products or services online - 88%
Visiting online retail stores (any device) - 88%
Online purchase (any device) - 75%
Overall, more Malaysians made more online purchases through mobile devices over any other device; about 58% made transactions via a mobile device. That being said. having an intuitive, mobile optimised store experience will be key to getting more online sales in Malaysia.
As for when the Malaysian consumer does their shopping, most Malaysians place most of their orders during work hours on weekdays.7 The golden time is right in the middle of the week at 4:00 pm on Wednesdays. This is a valuable insight for eCommerce merchants as it can inspire tactical campaigns to nudge customers to add products to their cart or push through with a purchase at that hour. A well-timed holiday marketing campaign or limited-time discount might do the trick, for example.
Consumer behaviour and expectations
Consumer confidence in Malaysia was stable earlier in the year (Q1 2019), which may carry over into the final quarter. According to Nielsen8 , 71% of Malaysians believed their personal finances for the next 12 months would be excellent or good; close to half (48%) said now was the time to buy the things they want and need (up from 42% in the same time last year).
Consumers were exhibiting more prudence - around 88% said they had reduced spending to save on household expenses. But the main cost-cutting was not directed at eCommerce, rather they were mainly on cutting down gas and electricity expenses, and cutting down on out-of-home entertainment (about half the respondents aimed to do these).
eCommerce companies can play off Malaysian’s the tendency toward finding good deals, and may find that discounts go a longer way - especially during the holiday season in Q4 2019.
In terms of customer expectations, punctuality matters: 90% of Malaysian buyers said they expect their eCommerce deliveries to arrive within one week after purchase. Meanwhile, 46% expected delivery within three days.
In fact, Shopee attributed its strong 1H 2019 performance9 not just to Chinese New Year and Hari Raya activities—the leading sites note that growth was further fueled by the introduction of its next-day delivery service in June. Of course, next-day delivery isn’t always possible — especially for more complex cross-border shipments during the highly congested peak season. If you can’t provide next-day delivery services, prompt and transparent deliveries are important to satisfy Malaysian customers.
Vase.ai, an online research company in Malaysia, identified the country’s Gen Z consumer preferences10 in a survey. 52% paid attention to feedback and reviews, making customer feedback critical. About 51% of Gen Z buyers made purchases based on discounts and promotions, indicating price sensitivity, while 43% indicated sensitivity to delivery charges and fees.
For the wider digital consumer, 87% said they made purchases through social media such as Facebook, Instagram, Whatsapp, etc. The bulk of purchases came through WhatsApp (46%), followed by Facebook (37%), and Instagram 36%). In Q4, this reinforces the importance of ramping up your social media marketing campaigns.
Social media - the right influencers for the right target audiences
With the high internet and mobile penetration rates in Malaysia, it only makes sense that brands are reaching customers where they are most often — social media.
According to the same Digital 2019 Malaysia report, there are 25 million active social media users in Malaysia, which is almost equal to the number of internet users in the country. That number is expected to rise to 26.1 million by 2023.11 Around 24 million of the total number of active social users are accessing social media through their mobile devices. And the median age of the Malaysian customer is 29.9.
These statistics have a number of implications. The first is that social media is the best and most efficient avenue to captivate the Malaysian audience and drive them to buy your products. The Global Consumer Insights Survey 201812 conducted by PwC revealed that 58% of customers turned to social media to get inspiration for purchases. The second is that you need to come up with marketing campaigns that are optimised for mobile and appeal to the millennial demographic.
For this year’s 11.11 global shopping festival, eCommerce giants Lazada, Shopee, and Taobao invested considerably in influencer marketing.13 They wanted to reach the tech-savvy, always-on-their-phones millennials on social media by tapping into channels they were already following.
Taobao, for example, wanted to reach the Chinese-Malaysian demographic, which makes up a considerable 24.6%14 of the country’s population, through a mix of Chinese mid-tier, high-tier, macro, and alpha level influencers who were mostly female to do so.
Meanwhile, Shopee went for a Malay-centric approach, tapping into both male and female alphas, and mixed-race and gender for other influencer tiers. And Lazada took on an even more diverse mix, tapping into a variety of influencers of different races and genders.
Among the three, Shopee had the most direct campaign that had all the influencers promoting Shopee 11.11 through a number of social media posts, with each post containing the signature Shopee sale branding at the top left corner of the content.
The other two companies included more elaborate mechanics, having influencers engage the audience through a number of raffles or promote various super deals on 11.11.
In the end, each company was able to reach millions of users through their campaigns, smashing sales records once again. According to Shopback15, Lazada, Shopee, and Taobao observed around four to seven times higher shopping traffic volume on 11.11 compared to an average day in November. And overall, Malaysian shoppers made the highest number of eCommerce orders on that day, with over 100 orders made per minute.
Social media's always been vital, but leveraging a vast network of influencers to reach your target audience this peak season could be worth trying. Not only will it capture your audience’s attention, present your brands and products naturally on their feed (as opposed to a paid ad), and promote your sales without hard selling, it will also cut through all the marketing noise that happens during this crazy sales period.
Finding new ways to reach consumers
Online and mobile-first is certainly the way to go if you want to reach today’s Malaysian customers. But while social media is the obvious channel, it isn’t the only one out there.
According to Xiaofeng Wang16, senior analyst at market research company Forrester, live-streaming commerce will be the key driver of revenue growth for eCommerce platforms in 2019. Quickly gaining traction in China, live-streaming is also becoming popular in Southeast Asia and beyond.
Live-streaming17 offers a unique experience to shoppers. By seeing influencers or opinion leaders interact with certain products, shoppers will be more enticed to shop those products. This is best exhibited by Lazada Group’s diversified efforts in promoting this year’s 11.11 mega-sale.
In an effort to increase app downloads and boost sales, the Alibaba-owned group turned to “shoppertainment18,” which is basically enhancing the shopping experience through entertainment.
For example, Lazada engaged users through livestream by featuring the country’s top “Must-Buy List” on a native game show called GUESS IT! King19. This is on top of other in-app features, such as LazCity Wonderland, a game that lets customers build and explore a virtual LazMall city with special brand vouchers.
Most notably, Lazada hosted a Live Super Show20 on November 10 directly live streamed from the Axiata Arena. The music party consisted of performances from local artists such as Amy Mastura, Hazama, and Ayda Jebat, which users could watch right from the app.
You don’t necessarily have to own and manage your own application to take advantage of livestreaming. There are various live streaming applications in the market where you could promote your brand — even Facebook21 has one. But more than just a way to creatively showcase your products, livestreaming could also help you tap into new markets.
Livestreaming is particularly popular in China, and it’s helping Malaysian eCommerce merchants capture that market. In fact, Chinese shoppers are now buying three times as much Malaysian products22 thanks to livestreaming. This opens up a world of opportunities.
Don't forget about the deliveries
Promotions are always important, but speed and ease of delivery are still persuasive factors when it comes to online shopping. The PwC report revealed that 44% of Malaysian consumers would pay extra for their online purchases to be delivered really quickly.
Sites that look to grow rapidly (as in the case of Shopee) are always looking to focus on improving delivery experiences. Even if your business isn't as big as Shopee's, it's always good to look out for service providers who can help get your products to your consumers, particularly those across borders.
If you'd like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.