Welcome to Malaysians on Malaysia: our quarterly report on Malaysian consumer confidence during RMCO, featuring essential insights into confidence, behaviour, e-wallet, tech and esports trends in Malaysia.
As we brave through the COVID-19 pandemic as a nation, our Malaysians on Malaysia study gives us a glimpse of the trends and sentiments during this period. Our previous coverage on Malaysian consumer confidence for 1Q 2020 can be found here.
Easing MCO, CMCO Takes Pressure Off Consumer Confidence
As Malaysia enters the next phases of preventive measures to combat the COVID-19 pandemic, Conditional Movement Control Order (CMCO) in May’20 and Recovery MCO (RMCO) in June’20, we see gradual recovery in various consumer confidence component indicators as the country reopen selected industries in stages. Business owners, employers, employees as well as individuals begin to feel slight easing of pressures financially, albeit still a challenging environment to adapt to.
Malaysians Remain Optimistic and Hopeful the Economy Will Recover Soon
Despite the current general sentiments and feelings of worry, Malaysians remain hopeful that their financial well-being in the upcoming year will see better days.
And, with economic activity across industries now recovering, Malaysians are confident that the economy will see an improvement in the mid-term (within a year).
E-wallet Adoption Rate On An Uptrend
With the movement towards a more digitalized society, and during this unprecedented period which encouraged contactless payment, usage of e-wallets see steady incline since 2019. With the e-Tunai initiative ending in Q1, usage saw some correction, but momentum show a general upward trend.
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As we enter Q2 of 2020, we see that the effects of the COVID-19 pandemic are still very much felt.
With Malaysia in the RMCO phase in Q2, where more businesses are opening up and people are out and about, our MYCI registered a positive uptick (+5pts vs Q1’2020) after the massive decline that we saw in Q1 – signaling initial recovery in consumer confidence during RMCO and/or a gradual acceptance of the new situation and norm that we find ourselves in during this pandemic.
Confidence levels of personal financial well-being has been on a decline since Q4 2019, and this depressed trend is more pronounced with the lower (M40) income group.
Having said that, sentiments are still on the positive side of things so Malaysians do still hold optimism in terms of where they are with their finances at the moment, especially so for those located in KL/PJ and Penang.
That overall declining confidence on current financial state is taking a slight toll on consumer confidence during RMCO towards their financial well-being in the upcoming months.
Again, despite some negativity in their present financial well-being, Malaysians are generally still quite optimistic that their well-being will be better off in the future.
A sharp V-shaped rebound is seen in Q2 on propensity to spend on major purchases.
With the lifting of MCO/ CMCO and retail outlets & e-commerce platforms offering promotions or sales to spur revenue generation, the sentiment of buying in a major way see improvement on the broad base.
Q1 saw the Movement Control Order (MCO) shut down businesses across Malaysia and the economy in ways that have never been seen before, which drove perceptions of the current state of the economy into a nosedive.
With businesses opening back up and things slowly recovering now in the Recovery MCO (RMCO) phase, confidence towards the economy also saw a lift (+17pts) – although it remains very much below the 100-point threshold.
Almost all subgroups registered an increase in confidence towards the economy.
Inline with the growing consumer confidence during RMCO towards the current economy, and how the country is handling the impact of the pandemic, Malaysians are also more optimistic and confident that the Malaysian economy will be in a better place in the next 12 months. This sentiment is more pronounced with the T20 group.
FOCUS: COVID-19 and Its Impact on Malaysia
With RMCO in the picture now, Malaysians are feeling less worried about the impact of COVID-19 towards their lives and financial well-being given people are out and about, and work activities and routine have resumed.
About 40% now say their financial well-being have been affected in a big way, compared to the much higher over 70% number back in Q1.
Gen-Y, Millennials and Mid-to-High income groups are generally less-affected now with their financial well-beings, as most of them are getting back on track with their work routines.
Among those who said their financial well-being is affected; most say it will take them between 6 to 12 months to recover – with an average of 10 months or so.
Reactions are mixed — when it comes to what people think would be the likely scenario for the Malaysian economy due to COVID – mostly it looks like there would be a short-to-mid-term impact.
60% of Malaysians are optimistic that there will be NO or at most a mild recession, and recovery will start registering positively from Sept’20 onwards – This is especially the case with people in KL/PJ, where only one in every 10 person feel there would be a recession lasting all the way into 2021.
While another 40% are saying recession to last at least into 2021 – more so among those in Penang, JB and the higher-income groups.
Sentiment here has been bolstered by all the aid and stimulus from the Government so far in recent months, Prihatin at first and Penjana after — it remains to be seen how far that would help carry the sentiments during this RMCO period.
Given the optimism, and largely how well the country has handled the pandemic post-MCO, 85% of Malaysians are now seen to be comfortable enough to start going back out and carrying out various activities in public spaces.
Going to shopping malls (60%), Eating out (56%) and Going to parks (41%) are the top 3 activities people are starting off with and comfortable with doing in Q2.
There is still quite a fair bit of apprehension with taking public transport, going to the cinema, gym and pubs. No doubt, as we progress through the RMCO phase, as people start getting back into the swing of things, we foresee these numbers to start growing.
After almost 3 months of lockdown, almost two-thirds of Malaysians claim that they intend to buy something “big” in the near future – signaling the onset of the phenomenon known as ‘revenge spending’.
Domestic travel tops the list, followed by electronic gadgets, large home appliances and car.
In Q2 2020, activities like online shopping on marketplaces like Shopee and Lazada continue, with penetration rates of 48% – at least half of Malaysians aged 18+ have bought something online in the last 3 months.
Particularly with e-wallets, we see some contraction due to the post e-Tunai initiative where we saw a spike in usage amongst Malaysians. Nevertheless, the penetration growth is still very much on an uptrend and we should see this number being supported further by the ePENJANA program from the Malaysian Government. We expect this payment method to become more and more mainstream.
Consequently, travel and leisure, a hard-hit industry due to the global pandemic continue to see massive declines, with international travel at 0% currently, in accordance to the SOPs put in place by the Government to curb the spread of the pandemic.
Usage of e-wallets corrected to 49% this quarter, from its high of 63% in Q1. At half of the adult population now using e-wallets, this indicator is still seen to be on an upward trend and trajectory.
Number of e-wallets being in used by each user has now gone back to the 2-3 wallets on average mark like we saw previously before e-Tunai Rakyat initiative, suggesting that the drop in multi-wallet was short-term and is due to Malaysians sticking to the brand (Touch n’ Go, Grab Pay or Boost) that they redeemed the RM30 for use.
Touch n’ Go e-wallet continues its dominance in brand usage for the e-wallet segment amongst adult Malaysians. At a distant second, Boost sits with the rest of the pack.
With Maybank’s QR Pay taking its place back in the top 3 brands (at the expense of Grab Pay) and Big Pay recovering from its dip in Q1 – we round up the top 5 brands in the e-wallet category this quarter.
With ePENJANA coming around, we expect we shall see Grab Pay regain its top 3 position yet again.
As always, top use cases for e-wallets hold constant, with F&B being the top channel where e-wallets are a popular payment medium. This is followed by the channels that are consumption-based and transactional in nature:- Groceries, convenience stores, bill payment, mobile reloads and food delivery.
Awareness and familiarity of esports continue to gain more traction this quarter with online gaming picking up more steam during this period where most are confined to homes and life on digital platforms become more prevalent.
In our previous article on esports, branding in esports is no longer the domain of just gamers, games and PC equipment manufacturers. There are many compelling reasons and case study examples for businesses in retail, food, logistics and even luxury brands to get involved in the action.
Crypto-ownership by Malaysians has grown almost 3X this quarter, coinciding with the price gain of over 30% of Bitcoin hitting a US$12,000 high not too long ago. Most Malaysians are vested into Bitcoin and its fork altcoin, i.e. Bitcoin Cash.
Malaysians on Malaysia cover all Malaysians aged 18 and above, M40 and T20 segments, in key cities of Peninsula Malaysia representatively.
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