Welcome to Malaysians on Malaysia (MOM): Oppotus’ quarterly report that provides in-depth insights into the Malaysian Consumer Confidence Index (MYCI). It is an ongoing effort to offer insights into Malaysia’s evolving market landscape. This edition delves deeply into the latest consumer trends and key influencing factors, including financial outlook, economic confidence, digital payments, tech trends and more, offering a fresh perspective for strategic decision-making. Join us as we unravel the driving forces of this quarter and its potential implications.
Q2 2025 continues to reflect the rakyat’s subdued sentiment towards the country’s outlook, as the MYCI recorded a slight dip and remained largely stagnant from Q1 2025. These results were also mirrored in Malaysia’s GDP growth rates. On a positive note, the unemployment rate dropped from 3.1% in March to 3.0% in April — the lowest in 10 years. This improvement was driven by growth in the service and technology sectors, as well as rising investment in digitalisation and automation. Before we dive deeper into this chapter, readers are encouraged to revisit the Q1 2025 MOM report.
MYCI Remains Flat Quarter-on-Quarter
The Consumer Confidence Index in Q2 extended its downward trend from Q1 of the year. Several key global events during this period shaped overall sentiment, as they brought along some major economic challenges with them. One of the most significant impacts came from the announcement of the new global tariff rates, which took effect on Liberation Day in April 2025. In addition to this, there were also heightened geopolitical tensions within the Middle East region that affected the oil market, further influencing economic confidence.
Stable Economic Growth
Despite the relatively static consumer sentiment, the Malaysian economy demonstrated underlying stability. However, amidst this growth, many consumers remain concerned, as the implementation of the SST was a major talking point during the period and stirred public unease. It was announced to primarily impact the higher-income segment as it focuses on imported food, selected goods and services. In line with the BNM report, the Malaysian economy growth remained steady at 4.4% compared to Q1 2025. Inflation moderated to 1.3%, while core inflation stayed stable at 1.8% (versus 1.5% and 1.8%, respectively, in Q1).
E-Wallet Usage is Plateauing
Since Q3 2023, e-wallet usage has plateaued at an average of 84%. This market maturation is accompanied by a significant positive trend: average spending has reached its highest since the onset of this study. This indicates a key shift — consumers are now more comfortable using e-wallet as a primary payment method for larger and more frequent transactions. Furthermore, the competitive market has begun to consolidate, with the top e-wallet brands now clearly defined and firmly established.
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.
The Malaysian confidence index is rather stationary when comparing quarter-to-quarter, with the index only declining by 3 points (to 124 points) from the previous quarter (127 points). The overall outlook remains mixed due to several key factors that occurred during the quarter.
Firstly, Malaysia was directly impacted by the global trade tariff increment announced by the United States (US). The initial announcement of a 24% reciprocal tariff sparked concern among many Malaysians, as the country runs a substantial trade surplus with the US, exporting crucial goods like electronics, palm oil, and machinery to one of the world’s largest economy markets.
In addition, geopolitical tensions in the Middle East region also emerged. This has caused a short-term spike in crude oil prices, further contributing to the rakyat’s concern. Investors had later predicted a “knee-jerk” reaction, with oil prices expected to spike due to fears of disrupted Middle East supplies.
Thankfully, these factors did not trigger a sharp rise in inflation over the past few quarters, as headline inflation eased to 1.3% from 1.5% in Q1 2025. The key factors helping to mitigate inflation were controlled domestic fuel prices and stabilised F&B costs.
Moving into Q2 2025, Malaysian’s financial well-being declined further, falling to 132 points from 136 points in the previous quarter. This decrease suggests a ripple effect from the MYCI trend to the financial sector.
Beyond global tariff uncertainty and the unsettling short-term spike in crude oil, another key domestic concern was the forthcoming implementation of the expanded Sales and Service Tax (SST), scheduled to kickstart on 1 July 2025. The Finance Minister explained that the primary objective of this measure was to strengthen fiscal sustainability by widening the tax base. It is expected to generate additional revenue of RM5 billion over the remaining six months of 2025 and RM10 billion in 2026. Although some stakeholders called for a deferment following the tariff hikes, the government stressed that such a delay would severely impact the rakyat by compromising the funding for essential public services.
Furthermore, consumers also expressed concern that the SST implementation would affect imported food items. While essential local staples remain exempt, certain imported goods—including specific fruits, nuts, and healthy seeds — will be subjected to the tax. This raised anxiety, as such products are often relied upon for dietary and nutritional variety that the local supply cannot fully provide.
Likewise, consumer outlook on their financial well-being over the next 12 months remains flat at 150 points quarter-to-quarter. The three major factors mentioned earlier (global tariff, crude oil price spike, SST hikes) have significantly influenced most rakyat, contributing to this stagnation. This cautious sentiment is particularly evident across analyses of monthly household income levels and geographic locations, where the downtrend was also observed.
Yet, another way to view the SST implementation is that the government’s decision stems from the pressing need to fortify the nation’s financial health and ensure a stable path forward. As Malaysia currently operates with one of the lowest tax bases in the region, the revisited SST is primarily targeted on services at a standard rate of 8%. Therefore, most consumers are generally unlikely to feel the pinch when it comes to day-to-day goods transactions. It is anticipated that this key reform will become a lesser concern in consumer sentiment next quarter.
Next, confidence in making major purchases also continues to plunge, falling further to 107 points. This index is at its all-time low since Q3 2022, as consumers proactively prepare for anticipated price hikes. The impact is most pronounced among the lower M40 income group, where the index hits below the critical 100 points threshold, indicating strong pessimism about making large, non-essential purchases.
It is worth noting that within Q2 2025, there were no major festive shopping events as Hari Raya Aidilfitri this year fell on 31 March. Therefore, most festive spending and the associated surge in consumer optimism were already captured and reflected in Q1 2025.
Regarding the current state of the economy, overall confidence remains stagnant at 114 points, down marginally by one point from the previous quarter. This persistent worry among consumers has carried over from Q1 into Q2, highlighting how sensitive public sentiment is to external risks like global trade tensions and policy uncertainty, even with stable domestic growth. This continued anxiety is shown across all consumer confidence indicators.
On a more positive note, the Ringgit continued its upward trend against the currencies of Malaysia’s major trading partners. The local currency appreciated significantly, strengthening by 5.1% against the U.S. Dollar (USD), driven primarily by broad USD weakness that intensified following the global tariff announcements. Moreover, the Ringgit’s Nominal Effective Exchange Rate (NEER) also appreciated by 1.5%, providing a strong signal of Malaysia’s improving currency performance against its key trading partners.
Nevertheless, these positive developments surrounding the Ringgit’s strength were insufficient to lift consumer confidence in the economic outlook over the next 12 months. This is reflected in the slight decline of the sentiment index, where it dropped to 117 points in Q2 from 121 points in Q1. Despite the MYR’s strong performance, consumers remain cautious. The major events highlighted earlier — especially the global trade uncertainty and policy debates — were perceived as substantial risks that overshadowed our currency gains and raised continuous fears of inflation in the future.
Zooming into notable activities over the past three months, Online Shopping experienced sluggish growth despite continuous promotional campaigns aimed at encouraging spending by platforms like Shopee and TikTok. Meanwhile, TikTok celebrated its 6.6 event as “6.6 Fiesta Hari Jadi”, which featured an All-Star livestream on TikTok Shop and led to a visible rise in live-stream purchasing, increasing from 32% in Q1 to 36% in Q2.
Later that month, Shopee hosted its largest affiliate creator gathering, bringing together over 2,000 affiliates and more than 80 brands at the latest edition of Shopee House. This event allowed attendees to engage in product demonstrations, content creation sessions, and real-time learning opportunities. All of which was intended to enhance the local online shopping experience and help Malaysian shoppers be “Lagi Murah” and “Lagi Cepat” during the 7.7 event.
A look into the adoption rate of Buy Now, Pay Later (BNPL) revealed stagnant growth, maintaining at 33%. Nonetheless, Shopee recently reported that 81% of over 40,000 Malaysians use BNPL to manage financial shocks, utilising it for essentials like baby formula, medical costs, and repairs. Rather than being a fund for luxury goods, BNPL presents as a solution for Malaysians to manage cash flow (57%), bridge finances until payday (46%), or cover emergencies (32%).
Aside from Online Shopping, a notable positive trend also emerged in the Travel sector. Domestic travel rose sharply to 50% from 41% in Q1, reversing historical trends. This shift suggests that domestic travel is becoming a new norm, as Q2 is typically not a peak period for domestic trips — Malaysian consumers usually favour international travel during this period. Furthermore, looking into Food Delivery, consumers tended to order more through third-party food delivery apps in Q2, with a score of 66%, aligning with usage recorded in Q4 2024. This contrasts with Q1 2025, when usage dipped during the festive season as consumers spent less on third-party food delivery services.
In examining e-wallet usage, the past three months saw the adoption rate decline to 77%. However, when viewed in the overall trend since Q3 2023, usage has effectively plateaued, maintaining a robust long-term average of 84%. Notably, this modest dip is accompanied by a positive counter-trend: average spending continues to increase and has recorded an all-time high of RM553.40. This trend suggests a positive shift where consumers show greater confidence and are increasingly comfortable utilising e-wallets as a primary payment solution for larger and more significant transactions.
Digital payments have gained further momentum since Q3 2023, with this quarter marking an all-time high usage share for physical transactions at 81% (any digital form), while cash usage dropped to its lowest share at 19%.
This dominance is largely attributed to the variety of digital payment methods available and the high level of efficiency offered. Convenience plays a critical role in this modern world, and vendors are making efforts to meet this demand. For instance, the TNG e-Wallet is now integrated with public transport services, granting users to purchase and activate the My50 unlimited travel pass directly through the app. Consumers now have the option to skip visiting a service counter, as they are only required to complete a one-time electronic identity verification process before purchasing the pass digitally. This initiative by Prasarana and the Touch ‘n Go Group aims to improve convenience, time efficiency, and enhance the overall usability of the pass — a move that is expected to benefit around 250,000 existing users and help to encourage wider adoption of public transport.
Within the digital payment usage share in physical transactions, e-wallets remained a favourite (24%), followed by debit cards (18%), and credit cards (14%). BNPL is a notable emerging method, gaining traction over the past three quarters. The attractiveness of BNPL promotions has drawn a growing number of consumers, as its coverage now spans beyond retail into areas such as online shopping and insurance.
Since this study’s inception and up till this quarter, Touch ‘n Go (TNG) has been the definitive market leader for e-wallet usage, consistently maintaining above 80% usage rate since Q2 2023. As one of over 50 e-money licensees in Malaysia, TNG strengthens its dominance with over 13 million monthly active users and more than 14 million active transaction users. This scale enables key features like interoperability, providing consumers with added convenience for both domestic and international transactions. While TNG leads, other brands stay locked in fierce competition: in Q2 2025, MAE scored 51%, followed by GrabPay at 46%, and ShopeePay at 29%.
Part of this competitive dynamic is closely tied to the introduction of Digital Banks in Malaysia. The usage rates for GrabPay, Boost, and AEON e-wallets have increased and plateaued since Q4 2024. This trend is notable because these e-wallet platforms belong to the Digital Bank consortium and are often used as a core part of promotional campaigns to attract consumers into signing up for digital bank accounts, effectively leveraging established payment apps to drive financial adoption.
Based on the consecutive study of e-wallet usage, the top three spending categories remain as: Food & Beverage (F&B), topping as the leader, followed by Groceries, and then Convenience Stores (CVS). This quarter, both F&B and CVS saw slight usage increments compared to the previous quarter, hitting 74% and 68%, respectively. However, Groceries registered a minor decline at 69%.
Usage in other categories remains generally positive despite some fluctuation. Overall, most usage categories have a favourable trend. Aside from Food Delivery, which remained the same at 49%, Bill Payments and Parking also experienced a slight downward trend, recording usage at 42% and 39%, respectively.
Coming to the Tech Trends category, Electric Vehicle (EV) is the latest addition to this study and has gained strong traction, fueled by robust government support and growing consumer acceptance of this new way of driving. Since Q4 2024, awareness has robustly remained above 90%, with familiarity consistently exceeding 50%. This enthusiasm is reflected in registration numbers: EVs recorded a substantial year-on-year (YoY) growth of 71.13% (June 2024 vs 2025), with total registrations in the first six months of 2025 reaching 17,143 units, compared with 10,633 units during the same period last year.
Artificial Intelligence (AI) also continues to gain momentum, reaching an all-time high of 78% familiarity alongside a virtually universal 99% awareness rate. Malaysia has strong ambitions to become a regional AI hub, aligning strategic initiatives like positioning Johor as a smart city and digital hub—a move that capitalises on neighbouring Singapore reaching its capacity limits for data expansion. Equinix Malaysia’s Managing Director highlighted that Malaysia is “one of the few interesting countries” that houses three key digital ecosystems: data centres, AI, and semiconductors.
The commitment to this goal was solidified when Microsoft launched its first cloud region in Malaysia as an AI innovation centre — part of a substantial RM9.3 billion investment. This collaboration aims to equip 800,000 Malaysians with AI-related skill sets. The Digital Minister has since shared his confidence that this initiative will firmly establish Malaysia’s position as a regional leader in the digital and AI economy.
While Augmented Reality (AR) awareness continues its steady uptrend at 88%, the main challenge lies in converting awareness into usage, as familiarity with AR stood low at 40% in Q2. In mid-June 2025, the launch of Xreal One Pro — a new generation of AR smart glasses — is notable in this space. These glasses blend digital content with the real world while supplanting a phone. Their standout feature is the ability to connect seamlessly with smartphones, computers, and other devices, transforming into a virtual, high-definition external display. This accessibility is crucial for bridging the gap and accelerating consumer familiarity.
Moving on, cryptocurrency ownership trend also displayed a noticeable consolidation pattern since Q3 2024, averaging 58.8% ownership across these four quarters. This sustained adoption demonstrates that consumers are becoming not only more open to, but also increasingly confident in, cryptocurrency as an asset class— despite the high and low market fluctuations seen in Q2 2025.
Within the cryptocurrency landscape, Q2 2025 saw a dramatic transformation driven by regulatory developments, technological advancements, and shifting market dynamics. The top trend currently shaping the industry is the rise of Stablecoins, which are rapidly becoming mainstream. Pegged to stable assets like the U.S. dollar, they offer the benefits of blockchain technology without the typical volatility of other cryptocurrencies.
Furthermore, new AI-powered crypto applications are pushing the boundaries of automation and data analysis. A notable example is Bittensor, a blockchain-based platform that enables users to create, share, and monetise AI tools without relying on centralised tech giants. Another project, Ambient, is pushing even further by creating blockchain networks that integrate AI directly into their core operations. Backed by top venture firms like a16z and Delphi Digital, Ambient aims to position itself as a decentralised competitor to centralised AI giants like OpenAI.
Similar to the previous trend, Bitcoin continues as the top cryptocurrency owned in Malaysia (46%) in Q2, also an unprecedented figure was recorded. While Ethereum (21%) and Bitcoin Cash (17%) remain stable from the previous quarter, there is a notable improvement for Dogecoin, where its adoption rate increased to 13% (compared to 11% in the Q3 2024 to Q1 2025 average).
In June 2025, Bitcoin fell below the $100,000 mark due to geopolitical tensions that also affected crude oil prices. As the world’s most valuable digital currency, the drop to $98,400 shook investors, prompting caution amid uncertainty over potential U.S. involvement. However, similar to past events like the COVID-19 initial crash, the market has historically shown that such dips often offer compelling long-term buying opportunities— a view reinforced by Bitcoin’s rebound above the $100,000 threshold shortly thereafter.
Oppotus stays committed to acquiring insights through continual analysis, offering a unique perspective on the country’s trends and consumer landscape.
Note that the opinions presented regarding Malaysia and its people reflect 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.
