Q1 2025 Update: Consumer Confidence Reflects Shifting Economic Currents in Malaysia
Welcome to Malaysians on Malaysia: Our quarterly report on the Malaysian Consumer Confidence Index (MYCI). In our ongoing endeavour to offer insights into Malaysia’s evolving market landscape, this edition continues to delve deep into the latest consumer trends and the influencing factors, providing a fresh perspective for you. Join us as we unravel the driving forces behind this chapter’s momentum and its potential implications.
Q1 2025 continues to unveil mixed sentiments regarding the country’s future outlook as the MYCI has dampened from Q4 2024. Even though the scores have lowered, Malaysia is still gaining momentum in GDP and foreign investment within the Q1 period. It is recommended to revisit Q4 2024 MOM before diving into this chapter.
MYCI Continues to Dip
Malaysia continues to record an uptrend in the inflation rate, and the news of tariffs on imported goods, which broke at the end of Q1, has shaken the confidence among Malaysians. Therefore, the MYCI score continues to see a downtrend, with Q1 2025 scoring 127 points against 114 points in Q4 2024.
Economic Indicator
The dip in MYCI spills over into the economic indicator, as globally in Q1, trade tensions were escalating at the end of the first quarter. Moreover, Malaysia’s inflation rate rose 1.5% year-on-year in February 2025, according to the Department of Statistics Malaysia. This uncertainty has caused significant concern about Malaysia’s economic growth.
E-Wallet Usage is Plateauing
While having mixed feelings on economic growth and confidence, e-wallet usage is plateauing. The encouragement to go cashless was very well supported by the government over the years, & most e-wallet platforms are stabilised with better cybersecurity measures, such as the tightening of Secure2u by MAE.
If you are eager to dive deeper into these numbers and gain a more nuanced understanding of the forces shaping the future of business and finances, reach out to us at theteam@oppotus.com. You can also hop onto our alternative service, Oppotus DoubleDecker, an Omnibus solution to gain a first-hand preview of our next Malaysians on Malaysia (MOM) report.
Malaysians have mixed sentiments on the past quarter, and this has spilt over into the start of 2025. This Q1 2025, the MYCI has continued to dip to 127 points compared to the last quarter, though if compared year-on-year, 2025’s Q1 was not at the lowest point.
During this period, the inflation rate rose 1.5% year-on-year in February in the consumer price index. In hindsight, food prices were stabilised while housing and utilities costs moderated, as food away from home inflation eased to 4.6% from 5.0% previously. There is a group covering housing, water, electricity, gas, and other fuels moderated to 2.3% from 2.8% in January.
The end of Q1 2025 was the most concerning period as there was news announced on the tariff increase, which will be implemented across all countries. Though the news had not given a clear outline of the changes to the tariff, it has shaken Malaysians’ confidence on top of the ongoing inflation.
The current financial well-being of the country has drastically dropped in Q1 2025 to 136 points. This score was last reflected in Q2 2023, and from then till now, it has always averaged at 154 points.
Having said that, there were multiple plans and projects by the government to ensure the growth of Malaysia’s financial sector. It is reflected in the increase of minimum wages to RM1,700 instead of RM1,500, which took effect on 1 February 2025. The adjustment will allow rakyat to live comfortably in supporting economic growth by increasing household income. Interesting note, over the years, the minimum wages have been increasing, as in 2016 it was as low as RM1,000 based on Peninsular Malaysia.
Current financial well-being is seeing a strong impact for the next 12 months from the consumer’s perspective. As it drastically dropped to 149 points from a previous towards the end of 2024in Q4 2024. Regardless of what income bracket or location within Malaysia, it is expected to affect all Malaysians.
The lack of confidence might be affected by the tariff hikes announced by the U.S.A. at the end of March. Malaysia’s actual average applied tariff is closer to 5.6%, in line with the global trade commitments under the World Trade Organisation (WTO). This potentially threatens the manufacturing hubs in Penang, Selangor, and Johor, leading to reduced demand and squeezed profit margins for local businesses.
The pessimism towards the state of financial well-being indices is also reflected in Malaysians’ spending for major purchases – with the index also seeing a plunge to a low of 112 points since Q1 2023. This effect is even more stark among the lower M40 group, with the index reaching 100 points.
This jump was surprising as this period was a major festive period in the country (CNY and Raya). During this period, the government took initiatives to alleviate the financial burden of Malaysians; as such, during the Raya period, there are 26 essential items will be listed in the programme “Maximum Price Scheme”. Implementation of this scheme is designed to ensure a balance and a reasonable price.
The current state of the economy was also not at its best, as it continues to contract towards 115 points from 120 points. Though Bank Negara Malaysia (BNM) reported Malaysia’s economy grew by 4.4% during the first quarter of 2025, driven by the steady expansion in domestic demand – rakyat felt differently as there were many uncertainties during that period, especially on the rise of cost of living.
According to RHB IB, initiatives under the MADANI Economy framework, including critical plans like the National Energy Transition Roadmap and the New Industrial Master Plan 2030, are expected to stimulate medium-term investment. Nevertheless, it expressed concern over the potential negative spillover impact on Malaysia’s trade and manufacturing sector as the escalation of global trade tensions was ongoing.
However, on a positive note, Malaysians are cautious and remain hopeful that the economy in the next 12 months will do better. It scored 121 points, ending about level with the previous quarter.
A positive outlook was outlined at the start of 2025. According to the Federation of Malaysian Manufacturers (FMM), it is expected that Malaysia’s economy is set to experience steady growth, supported by robust domestic demand, strong investment activities, and continuous expansion in exports and tourism. Meanwhile, the ringgit’s performance is expected to remain stable in the next 12 months, buoyed by the positive economic factors, including the growth of tourism.
Subsequently, looking into the consumer activities in the past 3 months, we noticed an uptrend in Online Shopping. As noted, there were major festivities that happened during that period – hence online shopping saw increases to 81% and purchasing from livestreams was at an all-time high of 32%. During that period, Shopee also noticed 116% more Malaysian buyers who interacted with sellers through livestream shopping, compared to 2024, highlighting the growing role of live commerce in CNY festivities.
Travelling both domestically and internationally has declined from the previous quarter by 41% and 22%. This is a notable trend for Q1 since 2018, where dips typically occur during the start of the year, with Q4 having the highest rates usually.
Moving towards eating habits, there was a downward trend due to March was a fasting (Puasa) month for Muslims. Therefore, takeaways from convenience stores contracted to 46%, and having a meal in convenience stores settled at 46%.
E-wallet usage in Q1 2025 has plateaued as the usage becomes mainstream, as it is available from major retail stores to street stalls. The plateau can be seen since Q3 2023 as it steadily scores within 80% – 95%. It may seem to be a dip in Q1 2025, which scores at 83% but the average spend would say otherwise.
The average monthly spend in Q1 2025 via e-wallets is now at its peak at RM490, representing a 46% growth in spending vs Q4 2024. During these months, there were major festive events such as Chinese New Year (CNY) in January/February and Hari Raya Aidilfitri fall on March. There were also multiple brands using e-wallets as prizes or points of promotion, such as TNG eWallet giving Duit Raya of RM10 reload pin by following their Facebook account, which further supported usage.
The trend of digital payments on physical transactions at merchants continues to increase to 77% vs 71% in the previous quarter. Initiatives of getting consumers of all ages to adopt digital payments are on the right path, and these initiatives continue to educate and ease consumers and retailers to adopt the technology. With the rate of digital payments growing, subsequently cash usage has steadily declined and is currently at 23%, its all-time low since 2022.
A breakdown of the usage share for physical transactions by payment method gave an overview that credit cards and e-wallets had an uptick trend. Both payments have increased by 6%, credit card was at 7%, now at 13%; while e-wallet was at 15%, now at 21%. The uptick in credit card usage may not be a long-term trend.
Touch ‘n Go continues to lead the e-wallet category at 93%. While GrabPay is making a comeback in this quarter at 45%, on par with MAE at 44%. Previously, GrabPay has struggled to lift itself upward since Q2 2023, but the usage has been gaining momentum since Q4 2024. This is possibly due to the launch of GXBank in November 2023, and there was a campaign for those who signed up as GX bank users, such as users who spend in Jaya Grocer with the GX Card will receive 1.5x GrabReward points. Subsequently, in Q1 2025, GXBank continues to run a new campaign that allows consumers to earn 8x GrabRewards Points for every RM1.
The top 3 categories of e-wallet being used continue to be F&B (73%), Groceries (72%) and Convenience Store (66%). In general, there was a surge in usage in all categories – transportation, movie tickets, and gaming had a notable increase during this period, as they increased by more than 100% each. Having consumer adoption towards digital payment is increasing, Oppotus believes that all categories will continue to increase in the following quarters as the acceptance towards technology and digital payment is rising.
The overview of tech trends awareness in Malaysia remains positive, as most are at 80%. The top 3 consist of Artificial Intelligence (AI) 99%, Digital Bank 97% followed by Cryptocurrency and Virtual Reality (VR) as both scoring 96%.
As for AI, Malaysia is aiming to position itself as a Southeast Asia AI Hub. According to the Digital Ministry, they have projected that AI will contribute approximately US$115 billion to the country’s economy. Therefore, the government is implementing AI at Work 2.0, a collaboration with Google Cloud, which allows 445,000 civil servants to use generative AI technology in their tasks, an initiative that will no doubt bolster further adoption across the nation.
With Digital Bank, there was a good growth in awareness at 97% and familiarity at 67%. No doubt, this positive outcome comes on the back of receiving RM2.3 billion in deposits from a total of 1.3 million customers last year (2024). According to the Bank Negara Annual Report 2024, these digital banks have begun to roll out financing products at the end of 2024, to further drive adoption. This is to improve access to funds and convenience, especially for early-stage businesses, self-employed individuals and sole proprietors.
Meanwhile, in early January, Malaysia Digital Economy Corporation (MDEC) announced the public launch of the IP360 Metaverse Platform. This platform features a Virtual Theme Park, which provides interactive experiences with homegrown cartoon characters Ejen Ali and Didi and Friends, which is popular among the masses.
Cryptocurrency ownership continued to remain at an all-time high of 56% at the start of 2025, even as compared there is slight dip from the quarter before at 60%. The confidence and growth of cryptocurrency remain at a positive outlook.
Many cryptocurrency owners have a similar purchasing pattern, which is either HODL (Hold On for Dear Life) or Dollar-Cost Averaging (DCA). The method of HODL is based on research and identifies projects with strong fundamentals. While for DCA, instead of investing a lump sum all at once, it invests based on a fixed amount of money at regular intervals (eg, weekly, monthly), regardless of the asset price
Therefore, the ownership of cryptocurrency remains good even though it suffered the worst performance in 7 years. Bitcoin’s price at the end of the quarter was US$80,000, which is one of the lowest price-points in recent times.
During this period, Bitcoin and Ethereum remain as the top 2 held coins within Malaysia. Bitcoin ownership is at an all-time high at 44%, while Ethereum is at 21%. This shows that Malaysians are willing to invest during the downtrend of the currency in hopes that, in the near future, the return will be good with the method of investment mentioned before.
The other factor was in January, Bitcoin hit a fresh all-time high of US$106,182 – this period coincided with the U.S.A. president’s inauguration. A notable highlight, Luno (a crypto-trading platform) enjoys its highest point of usage as well at 58% since 2022. Luno reported it has garnered over 1 million customers and recorded 32% growth in the cumulative transaction volume from last year, bringing it to over RM87 billion. In the coming quarters, we expect more to unfold in this space.
Oppotus stays committed to acquiring insights through the continual analysis, offering a unique perspective on the country’s trends and consumer landscape.
Note that the opinion presented regarding Malaysia and its people reflects the views of Malaysian citizens aged 18 and above, from all income segments, residing in key cities of the Peninsular, and selected in a representative manner.
For a more granular analysis of the data above, contact us at theteam@oppotus.com. Our team of experts would be pleased to facilitate a comprehensive review and offer customised recommendations tailored to your needs. Alternatively, explore the omnibus solution to incorporate additional measures for your business through our MOM study.
