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Despite the challenges brought on by the pandemic, there are still segments within Malaysia who are continuing to purchase fashion, even during lockdown periods. This is the second part of our coverage on Malaysia’s fashion industry and eCommerce trends, with our earlier article covering key fashion industry takeaways from 2020.
2021 started on a rough note for fashion businesses in Malaysia. With coronavirus cases continuing to rise, the Malaysian government needed to reimpose lockdown measures for a few weeks known as the Movement Control Order on all states save for Sarawak starting from 13th January 2021 and scheduled to end on 18th February 2021 as of the time of writing. During this period, businesses deemed non-essential need to shutter, which leads Malaysian shoppers to turn more to online shopping again.
Hootsuite and We Are Social reports that 19.9 million Malaysians have shopped online in 2019, a number that definitely grew higher in 2020 since lockdowns started. In the first half of 2020, iPrice reported that Malaysians’ average online basket size grew by 24 per cent in the first half of 2020 compared to the same period in 2019.1
Monthly web visits to Malaysia’s most popular eCommerce platform, Shopee, grew from 28 million 2019’s fourth quarter to 47 million in 2020’s fourth quarter.2 Our previous article on fashion industry trends in Malaysia covers this in greater detail.
Even during these lockdowns, there are segments in Malaysia who are continuing to purchase apparel and footwear online – those aged between 24 – 31, otherwise known as Generation Z and Millennials. Read on to get more key statistics and insights on their purchasing behaviour.
Malaysia is home to a multicultural society with Malays, who make up Malaysia’s majority, followed by the Chinese, Indians and other races. This cultural makeup allows for a varied mix of favoured styles in the country. Malays, who practice Islam, tend to favour modest wear as it abides by Islam’s virtue of modesty while the Chinese who favour East Asian influences from South Korea or Japan for example.3
One result of this racial makeup is that the apparel market in Malaysia revolves more around cultural festivities and less around seasons as opposed to the West. With Malaysia’s tropical climate autumn or winter wear aren’t required. Cultural festivities like Hari Raya Aidilfitri – also known as Eid – Chinese New Year, Thaipusam and Deepavali contribute to a growing demand for traditional wear in Malaysia. The Ramadan period is also the peak period for modest fashion purchases too.4
In 2020, Malaysia-based market research firm vase.ai developed a report on what Malaysians were buying online during the movement control order (MCO) between 19th March 2020 to 21st April 2021.5 The report found that 29 per cent of Malaysians were still buying clothes online. In particular, 61 per cent of those aged 24-34 within their sample were spending on clothes. You can find a more detailed breakdown of Malaysia’s movement control order and its impact on fashion retail in our earlier article.
Matching vase.ai’s finding, Statista’s fashion outlook report states that Millennials, those currently aged 25 – 34 years old, make up the majority of Malaysia’s fashion shoppers.6 Statista’s age breakdown of Malaysian fashion consumers are as follows:
Most of Malaysia’s millennials and generation Z are in the workforce which gives them the disposable income to spend on non-essentials. This is aided by members of millennials and generation Z in Southeast Asia being able to reduce their expenses by living with their parents as well as being highly familiar with online shopping and social media. However, with the current situation, they may be more price sensitive given rising concerns over job security.7
Malaysia’s fashion shoppers skew slightly more towards females with 54.1 percent of all fashion buyers being female according to Statista.8 Both Zalora9 and Euromonitor10 mentioned that rising female empowerment and financial independence has led to stronger spending by Malaysian women.
Many Malaysian women are career-focused as they are participating more in the labour force, are more likely to have enrolled in tertiary education than men,11 and love expressing themselves through the outfits that they wear.
In addition to being Malaysia’s primary fashion buyers, they’re also a key segment for luxury fashion purchases. Zalora mentions that 80 per cent of their customer base in Southeast Asia, Malaysia included, is female. Zalora also states that 87 per cent of their luxury shoppers from Malaysia are female.12
While millennials and generation Z purchase fashion the most, the challenges brought about by the pandemic has raised concerns about employment and job security, which was also covered in our earlier Malaysia fashion article.13 While these groups may still be purchasing fashion online, nearly half of Malaysians surveyed by Rakuten and Dia Brands mentioned that they would consider switching to more affordable brands.7
Nielsen also found that Malaysians, in general, are willing to try new brands and may not be loyal to any one brand.14 They go for perceived value for money and promotions but are still conscious of brand strength and reputation. They need to trust that the item is of the right quality15 and that it helps represent the best version of themselves.16
This is good news for newer brands as there is a higher chance that you can get more Malaysian shoppers to try your brand if you can cater to their price sensitivity and willingness to try new brands if you can find your segment’s appropriate value and price mix.
With lockdowns requiring a lot of brick and mortar shops to temporarily close, more Malaysians need to head online to shop for items ranging from essentials to home items and also fashion.
Cross-border spending is relatively high in Malaysia, with JP Morgan mentioning that four out of ten of all eCommerce transactions in the country are cross-border. China, Singapore and Japan are the top three overseas markets that Malaysians bought goods in general from in 2019. Nearly half of all Malaysians shop via their mobile devices, which means that shopping apps or brand.coms need to be mobile optimised.17
Shopee and Lazada, both online marketplaces where businesses can set up online stores, remain as two of the largest online shopping destinations for Malaysians. Both mentioned that they broke sales records for their 11.11 and 12.12 shopping days in 2020., Brands such as Pomelo have set up their stores on Shopee while other brands like Timberland, Adidas and Padini also have official flagship stores on Lazada.
While lower compared to 2019, fashion Brand.coms and fashion-specific marketplaces still received traffic in 2020.18,19 According to iPrice’s Map of eCommerce, the top fashion-specific online stores were Zalora, Applecrumby, FashionValet, and Althea.20 Local fashion company Padini credits their eCommerce efforts for helping to tide over during the months when brick and mortar stores had to be shuttered.21
Yet, the challenges raised by the pandemic isn’t going to spell the end of the brick and mortar store. In January 2021, Janio surveyed Malaysian fashion shoppers and found out that most still preferred to head to brick and mortar stores to try out their clothes before they commit to a purchase even if most of them don’t mind purchasing apparel online.
This creates a lot of potential for an omnichannel approach to reaching your Malaysian consumers, where you have a physical outlet for them to try on their selected items while still providing the convenience of online shopping.
When engaging with retail strategies like these, it helps to find a logistics partner that can provide both bulk shipments to stock your stores and parcel deliveries for you online shoppers. Logistics partners with end-to-end B2B and B2C shipping solutions can tailor their services to meet your company’s unique supply chain needs.
Malaysia has some of the highest engagement rates for brands. 69 per cent follow local brands and 63 per cent follow international brands online. More than two thirds follow both local and international brands via Facebook, with nearly four out of 10 of them following international and local brands via Instagram.
Malaysia is a mobile-first country with high social media usage. 83 percent of the population, or 26.69 million Malaysians having internet access. Nearly all Malaysian internet users (96 percent) access the internet via their smartphones, with an average of 4 hours of mobile internet usage a day. Lockdowns in Malaysia also resulted in people in Malaysia spending an hour more a day on the Internet.
According to the Digital 2020 report, Youtube, Facebook, Instagram, Twitter are the top social media platforms that Malaysians frequent.
Malaysians still actively engage influencers on platforms such as Facebook and Instagram which makes engaging with influencers a great way for brands to build trust with them. Instagram also began emerging as the most-used social media platform for influencer marketing campaigns in Malaysia.25 The Malaysian Reserve reported that the influencer market size ranged between MYR 280.46 million and MYR 560.91 million in Malaysia in 2018.26
Influencers in Malaysia can get anywhere between hundreds of thousands of viewers like Tasnim Shah27 to a million followers or more like Adira Salahudi 28– with some posts receiving around 100,000 likes regularly.
In 2019, Malaysian fashion designer Lee Khoon Hooi engaged fashion icon Meera Alyanna Mukhriz as an influencer for his Hari Raya modest fashion collection. Meera Alyanna Mukhriz frequently appears on the covers of fashion magazines and gains thousands of likes on her Instagram posts.29
Facebook and Instagram also both played a large role in enabling live-selling for businesses, which has also helped some fashion businesses attract new customers even during the lockdown as we covered in our 2020 fashion industry trends overview.30 Common platforms for live-selling in Malaysia include Facebook Live, Instagram’s IGTV, Lazada’s Lazlive and Shopee Live.
Influencers of various sizes can be engaged with in your marketing strategy. Larger influencers can be used to gain more brand awareness while influencers with smaller bases can be used to build trust among Malaysian fashion consumers. However, it still pays to be careful when selecting which influencers you want to work with to avoid fraud or potential backlash to your brand from mistakes they may make.31
Based on data from January 2020, bank transfers are the payment method of choice for most Malaysians, accounting for 46 per cent of payments for online transactions. This is followed by credit cards at 32 per cent of the population and cash at 11 per cent. eWallets make up 6 per cent.32
Another rising payment option in Malaysia is Buy Now Pay Later (BNPL). Pay with Split was successful in generating MYR 10 million in revenue for Malaysian businesses who signed up with them since April 2020. Options like these could be popular among millennials and gen Zs to help provide more flexibility in managing their finances.
With one in ten Malaysians still preferring cash on delivery, this payment method is still quite prevalent here. Offering cash on delivery as a payment option could help in gaining their trust in your products. As your buyers would be able to assess the quality of their purchase before paying, it could help you gain your first positive reviews to help grow your Malaysian consumer base. Not all logistics providers can help you facilitate cash on delivery payments, but ones like Janio can.
Malaysians are willing to try out new brands, but need to place sufficient trust in them before they do. You can consider partnering with local Malaysian influencers with varying following sizes to create familiarity while offering payment methods like Cash on Delivery can be another option to get your initial purchases.
Providing a smooth and enjoyable shopping experience is key when entering any new market. With a high need for trust, high intention to try before buying, and familiarity with online shopping, being able to offer the best of an offline and online shopping experience through omnichannel retail would be ideal.
However, for those who are unable to have a physical presence in Malaysia, you’ll need to prepare to accept returns. As many have gotten used to shopping for fashion online, some have adopted a habit of buying a similar item in different sizes to ensure a proper fit. The items that aren’t the right fit are then returned.
With all of this in mind, it’s imperative that you team up with a logistics partner that is flexible enough for your offline and online supply chain strategies. Whether it’s customs clearance, freight, last mile, or facilitating cash on delivery payments, each step of the journey plays a huge role in shaping your customer’s shopping experience. With Janio’s experience in delivering goods to and fro Southeast Asia, it’ll make things much easier for you to partner with us when expanding into Malaysia’s fashion market.
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.
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