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.
Marking the second quarter of 2024 is a continuation of the positive trends observed earlier in the year. The MYCI continued to record an uptrend and achieved a historic high. Notable improvements across economic and digital landscapes further magnified the global prospect for Malaysia, substantiating concerted efforts by the government. As we dive deeper into this chapter, here is Q1’2024 MOM for a thorough refresher.
MYCI Attained a New Positive Record to Date
The current MYCI has surged to an unprecedented high of 142 points. It surpassed the previous peak of 140 points in Q3’2023, taking over as the highest MYCI figure of all time. This steady rise indicates an enduring sense of optimism among consumers and the public, suggesting that the gains observed in Q1 are being consolidated, which is crucial for long-term economic stability.
Economic Indicators Point Towards Resilience
Improvements in key economic metrics, such as consumer expenditure on major purchases, have supported a stable economic environment. The index remained steady at 114 points this quarter compared to 115 points in Q1’2024, without drastic fluctuations. Enforced implementation of the MADANI framework may be prioritised to maintain the ongoing recovery and stability of the economy in upcoming quarters.
E-Wallet Usage Continues to Rise
E-wallet adoption has gained further momentum, with transactions increasing by 6% in Q2’2024. Touch ‘n Go e-wallet further strengthened its position as the leader with MAE at No.2 in this e-wallet space. We have also noticed the average spending through e-wallets has now exceeded RM400, highlighting a significant shift towards digital payments. Following this, growth of user rates was observed in major e-wallet platforms, reflecting growing consumer confidence in digital financial solutions and a shift towards a more cashless society.
OPPOTUS – Malaysians on Malaysia Q22024.pdf from Oppotus
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Building on the positive momentum from Q1, the MYCI continued its upward trajectory into Q2’2024, reaching a new height of 142 points. A congruent result is observed in the Financial Well-Being Index where the indices hit above 160 points this quarter. These milestones highlight the ongoing strength of the Malaysian economy and reflect a sustained boost in consumer confidence. Both indicators’ consecutive uptrend underscores a robust recovery and reinforces the optimism observed in earlier quarters.
Perhaps the most influencing encouragement in this is the increase in job opportunities in 2024. Significant efforts have been made to enhance the employment rate in Malaysia. For instance, 65,674 individuals were successfully placed into new roles from the SOCSO Job Settlement programme. This impressive amount is just a small part of the 8.76 million jobs currently filled; with another 2.1% vacancy rate, it brings the total job market to approximately 8.96 million positions. Also, this quarter alone saw the creation of 31,860 new jobs, indicating an expanding economy. With more job opportunities available on the market, Malaysians get higher chances of sustaining their income and financial stability.
Another plausible factor is the introduction of the new EPF Account 3 which sparked different opinions from the public. The flexibility to withdraw money from the provident fund monthly, if carefully utilised, can be particularly beneficial for those in need or serve as additional funds for purchases.
Following is a similar pattern observed in expectations, with Malaysians showing unprecedented confidence in their future financial well-being, hitting a peak of 167 points.
This may be extended from the labour environment where the Progressive Wage Policies (PWP) pilot project has been introduced as a step towards improving wage levels in Malaysia. The PWP has aimed to establish multiple wage floors above the minimum wage across numerous sectors including construction, manufacturing, etc. Salaries, alongside GDP growth, are expected following this initiative. Hence, with the hope of an increment in their incomes, Malaysians may express higher expectations of their future financial stability.
In conjunction with Malaysia’s mid-year and mega-sales, spending on major purchases has surged to 141 points, parallel to last year’s peak in Q3. This spending uptick amplifies the enhanced financial well-being of consumers reported above.
Besides, mega sales season could be an excellent time for consumers to make major purchases as it extends to more big-budgeted retail items such as furniture and renovation materials. The home exhibitions organised in MVEC Johor are good examples of one-stop sales shopping experiences. Regardless if consumers intend to make such purchases or not, this period generally attracts more eyeballs than usual as it offers substantial savings opportunities and greater purchasing power.
Coming to the state of the economy is a consistent performance throughout the first half of 2024. The index held steady at 114 points in Q2’2024, remaining intact with the last quarter.
Key economic activities such as global trade and tourism have underpinned this stability. Exports in May have reportedly grown 7.3% as compared to last year, totalling RM128.22 billion flowing from increased shipments of goods such as electronics and palm oil. The tourism sector has as well flourished following Malaysia’s removal of visa requirements for countries like India. As compared to last year’s May, the country has welcomed 2 million more visitors this May, bringing more revenue to the country.
Positive expectations on the future state of economy prevailed and escalated to 125 points this quarter compared to last year’s closing at 109 points. Signs of hopefulness spread across all income groups, with the upper-income group expressing the highest confidence.
Other than the achievements in exportation and tourism, this sentiment is collectively supported by the diligent plan of investment acts to accelerate the recovery stage. Ongoing investments from Q1 that foster stronger cash flow and opportunities, continue to support expectations for economic growth.
Studies on Malaysian consumer activities narrate the dynamic market preferences and trends over the months. Notable shifts of Q2’2024 occurred in shopping, travel, and food consumption.
Favours are inclined towards e-commerce sites; purchases from online shopping platforms such as Shopee have increased to 30% this quarter from 23% last quarter. This growth is likely driven by mid-year sales and the convenience of online browsing to evaluate the value of different deals. While online applications for banking products have reduced to their normal pattern after a boost from the introduction of digital banks, the use of digital wallets continued its upward trajectory. Efforts will be needed from relevant digital banks to reach new, less tech-savvy audiences. In addition, the use of wearables has experienced a continuous decline since 4Q’2023, dipping to a low 11%. Compatible smartphone health features, physical gyms, and reduced novelties may be among the reasons for this decrease.
While a slight dip from 43% to 42% in domestic travel is recorded, international travel saw a considerable rise from 8% last quarter to 12% this quarter. This shall be deemed as a growing confidence considering major travel deals like the MATTA fair happen only in Q3. The easing of travel restrictions from countries like Singapore, Thailand, and China, has likely granted Malaysians to explore more overseas destinations as well. Lastly, purchases of meals from convenience stores and orders of food delivery have simultaneously increased subsequent to the post-festival season where people would gather and dine out more.
Next, the e-wallet industry continues to thrive in Malaysia’s payment landscape, with a 6% growth in usage to 87% in 2Q’2024. Average monthly e-wallet spending also hit a new benchmark, recorded at RM409.8. Such constant digital adoption not only reflects Malaysia’s increasing digital presence but also facilitates the country’s transition towards a secure, accessible, and sustainable digital economy.
The top 5 e-wallet platforms in Q2 include Touch ‘n Go, MAE by Maybank, GrabPay, Alipay, and Boost. Impressive usage growth rates were observed in both leading e-wallet platforms, with Touch ‘n Go continuing to top at 91%, and MAE by Maybank at 61%.
During this period, Touch ‘n Go made several updates and offers on the e-wallet app. Among them is an appealing collaboration with Curlec, where users are granted the ability to perform recurring payments on their Touch ‘n Go e-wallet account. This update is forecasted to serve over 2 million merchants and 21 million users, with the objective of benefiting underserved communities to access financial services in the country. Prior to this, the company also rolled out a full digital onboarding for new Amanah Saham investors where users can start as low as RM10. All of which may have driven past and new users to try out the newly defined e-wallet features.
Meanwhile, the rebound in MAE is likely a shift from the Maybank2u App, where the shutdown announcement was made in June. Users are amidst the transitioning phase before the final app termination at the end of August.
Persisting to Q1’2024, E-wallet users tend to spend the most in F&B. Following closely behind are Groceries, CVS, Petrol, and Bill Payments. Notably in CVS, usage rate has skyrocketed from 30% to 55% this quarter. It is apparent that the preference for e-wallet checkout is still evolving in these wide ranges of sectors, where each has an ample room for improvement to fulfil consumer needs and preferences.
Deriving from the big picture is an overall decline in awareness of tech trends among Malaysians. However, those who are aware have remained and are becoming increasingly familiar with these trends, except FinTech and Artificial Intelligence (AI).
To provide a collective view of why these tech trends received lower recognition in Q2’2024, we are first tracing back to the recent shift in media focus to the world’s major events. Occurred concurrently within the 3-month period, the Euro Cup and the Olympics have dominated media coverage, captured public attention and overshadowed these tech trends. Given that these major events are quadrennial, they also naturally attract more focus compared to the ongoing, albeit less sensational, existing tech trends.
This led to the review of market saturation and technology maturity. Fairly saying, these technologies, like VR, have been heavily promoted and discussed in recent years. It is plausible that the initial excitement may have waned, leading to less public interest. This may sound like a sentiment, but the flip side is this could be an indication that those who are aware of these tech trends are seeing them more as integrated parts of everyday life rather than as novelties, hence the positive familiarities observed in most of these techs. There is a growing acceptance, integration, and knowledge of technologies in more casual, real-life settings in Malaysia, such as the recent opening of the country’s first Esports Virtual Reality Arena (EVA).
As the buzz around these technologies settles into a more stable phase, they are becoming seen as standard tools rather than groundbreaking innovations. This shift aligns with Malaysia’s vision of becoming a global digital hub with deep market knowledge.
In parallel, a closer look at cryptocurrency trends reveals a decline in ownership, dropping to 31% from 40% in the previous quarter. This decrease was seen right after the Bitcoin halving event in Q1, which is also a quadrennial event that typically presents opportunities for crypto miners.
Hence, depending on their strategy, some miners will choose to “chip out” their digital coins after a halving event as a response to profit opportunities, both from the win or loss end. That is to say, some Malaysian miners who purchased the coins at lower prices might have decided to sell portions of their holdings to lock in profits following the market excitement around the halving. Conversely, others may have sold their coins to avoid potential losses and mitigate risks associated with the increased volatility that follows a halving event.
Another aspect worth mentioning is Malaysia’s regulatory environment for cryptocurrencies can be dynamic. The enforcement act by LHDN was seen as an effort to minimise crypto tax evasion. While this does not have a direct effect on proper taxpayers, some investors may choose to exit the market to avoid potential legal or financial complications with anticipation of potential regulatory shifts and scrutiny from the authorities.
Crypto owners took a conservative approach in Q2, with ownership increases observed only in XRP, Dash, and ENJ. Noteworthy is among the stagnation, XRP experienced a drastic jump from 10% to 15%, surpassing Bitcoin and Bitcoin Cash as the leading cryptocurrency.
The cause behind this surge is largely driven by the concluding 4-years long legal battle of Ripple with the U.S. Securities and Exchange Commission (SEC) over XRP. Optimism was seen throughout the trials for Ripple, which attracted 100,000 new XRP owners entering the market in June, making it one of the hottest topics in crypto following the halving event.
Oppotus stays committed to acquiring insights in the next analysis, offering a unique perspective on the country’s 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 Peninsula, 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 in our MOM study.
