Welcome to Malaysians on Malaysia: our quarterly report on Malaysian consumer confidence up in RMCO Q3’20, 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 2Q 2020 can be found here.
Uplift of Consumer Confidence During RMCO
With the RMCO (Recovery Movement Control Order) firmly in the picture, and the fact that is has been running for a few months now, we see a slight uplift in our overall Malaysian Confidence Index (MYCI) – mainly contributed by state of financial well-being which increases significantly (considering the various economic stimulus packages by the government to ease the people financially).
Having said that, we observe that many locations in Malaysia was placed back in CMCO (Conditional Movement Control Order) in early Q4’20. It remains to be seen how much impact this would have on our MYCI – which we shall see in our next update on consumer confidence.
Malaysians Continue to Be Optimistic and Hopeful on Economic Recovery
With things feeling like they are getting “back to normal” and with various support from the Malaysian government, Malaysians are hopeful that the upcoming months will see improvements, in particular to their personal financial well-being.
And, with economic activity across almost all industries now back in full operation, Malaysians are confident that the economy will recover sooner rather than later.
E-wallet Adoption Rise
With the movement towards a more digitalized society, usage of e-wallets has been seeing steady incline since 2019. With the Government supported e-Penjana Campaign in end Q2, we see usage of e-wallets increase significantly again.
This time, we see adoption rates rise in almost all cross-sections of the general public – this is apparent and significant even with the Baby Boomers (Aged 55 and above) group. Comparing to the previous e-Tunai Rakyat Campaign, there was minimal impact with this particular segment of the population back then.
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In Q3′ 2020, Malaysia is seen to be on a trajectory of recovery that is evident in the steady growth of Malaysian Confidence Index (MYCI) vis-a-vis past few quarters, as the phase of RMCO (Recovery Movement Control Order) continues. This phase sees the country continuing to open up industries, businesses (even tourism sector) and schools, and as a result we see consumer confidence up in RMCO.
This positivity is reflected in the fact more people are now able get back to work and this gives a boost in sentiments around personal financial well-being and ultimate the overall index.
Malaysians’ confidence towards their current personal financial well-being sees an uplift in Q3.
The various economic stimulus packages the government had in place to help the people overcome the impact of COVID-19 is seen to bring positive vibes to Malaysians as a whole.
This positivity of consumer confidence up in RMCO is more apparent amongst the M40 – inline with the target focus of these stimulus packages from the Malaysian Government.
Despite the uplift in confidence on current financial state, overall outlook of financial well-being remain stable and somewhat muted vs Q2. And is reflective across various income groups.
Despite the flat index, Malaysians remain quite positive that their financial well-being will be better off in the near future.
Following its V-shaped rebound in Q2, index of spending on major purchases remain stable this quarter – with index still hovering just below the 100-point mark.
With 2 major e-commerce sales coming up in Q4, namely 11.11 and 12.12, it would seem Malaysians are holding off purchases and waiting for the year-end season to arrive before making their move.
As it is, the M40 groups looks to be more willing to spend on major purchasers compared to T20.
The rebound of current state of economy sentiments that we saw in Q2, however, did not sustain and we see contraction in this indicator now in Q3.
Though Malaysia still continues to be in the RMCO phase, at the same time positive cases of COVID-19 is on an uptick, which has in turn dampened consumers confidence towards the economy somewhat. And this is reflective across all locations and income levels.
The decline in confidence towards the state of Malaysia’s economy currently is seen to have impact on the forward-looking indicator of State of economy in the near future term. Malaysians in general continue to be wary and cautious in sentiment here.
FOCUS: COVID-19 and Its Impact on Malaysia
Now that things are slowing edging back to normal, the impact of COVID-19 towards Malaysians life and financial well-being continue to ease-up, plus with government aids to ease the burden, it’s collectively helping to bring positive vibes to the people.
Only 19% are now saying their financial well-being have been affected in a big way, compared 73% back in Q1 during times of the first MCO lock-down.
For those whose claim their financial well-being is affected; most say it will take them between 6 to 12 months to recover – at an average of 11 months or so to regain previous stability.
Going to shopping malls (61%), Eating out (60%) and Going to parks (42%) remain the top 3 activities people are open to doing during this period. At the same, Malaysians are seen to be eager to start travelling again as domestic travel & hotel bookings surged – which came as a breath of fresh air for the tourism sector in Malaysia.
Malaysians are also seen to be more wiling to take public transports now. However, there is still quite a fair bit of apprehension with going to cinema, gym and pubs.
Inline with the spend on major purchases index, consumers are seen to be holding back on big purchases this quarter.
With an increase in intention to purchase gadgets and luxury items – consumers are likely waiting for the major upcoming e-commerce sales in Q4 (i.e. 11.11, 12.12) to make their purchases
In Q3 2020, activities like online shopping on marketplaces like Shopee and Lazada continue, with penetration rates of almost 50% – at least half of Malaysians aged 18+ have bought something online in the last 3 months.
E-wallets usage rates see a spike, due in large part to the recent ePenjana Campaign which saw the Malaysian Government giving RM50 to people below pre-determined income thresholds. It remains to be seen how this adoption holds up the next quarter, but we do still expect that this payment method to become more prevalent and mainstream in Malaysia.
Domestic travel picked up tremendously this quarter, with State lines and Tourism sector opening up and holidaying “Cuti-Cuti” all over Malaysia occurred more briskly during this RMCO period.
This quarter also sees us beginning to track trends of Live streaming purchases and Online gaming – both areas that have become subjects of a lot of interest due to their digital nature, which has been accelerated by the pandemic environment.
With ePenjana RM50 initiative by the Malaysian Goverment starting mid of Q3, usage of e-wallet once again surge during this period.
Malaysians are seen to be using an average of 2 e-wallets with this ePenjana (vs eTunai period where only 1 e-wallet is used). This suggest that consumers are claiming their ePenjana with a different provider and an indication that consumers are opening to the idea of going cashless and exploring more of e-wallet services/providers.
As suggested earlier, Malaysian consumers are seen to be trying out other e-wallet services or claiming their ePenjana with another e-wallet provider as major partners of ePenjana such as Touch ‘n Go and Boost record a decline in usage; whereas Grab records an increase in usage. Touch ‘n Go continues on its dominance in this category here.
With the focus on the three major players during this period, usage of all other e-wallets record a decline. CIMB QR Pay, a recent new entrant into the competitive e-wallet scene, manage to record usage rates of 5%. We dove deeper into the e-wallet topic in our recent blog article.
Usage of e-wallet continues to dominate in F&B, Groceries and CVS, more so given the various promotions going around in these categories inline with the ePenjana campaign.
With everyone trying to stay in-door as much, usage of e-wallet for food delivery is more prominent in Q3 than before (steadily increasing since Q1’2020). Other areas where e-wallets are gaining usage are Petrol pumps and Transportation services.
Awareness and familiarity of esports by Malaysians in general continue to gain more traction this quarter, as well as cryptocurrency as we observe prices of Bitcoin continue to gain new heights.
Crypto-ownership by Malaysians held steady this quarter, this would be an interesting space to watch in our Q4 update of this report as we see Bitcoin breaking new records in its valuation.
Malaysians on Malaysia cover Malaysians aged 18 and above, M40 and T20 segments, in key cities of Peninsula Malaysia representatively.
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(Featured Image Source: TripZilla)