Welcome to Malaysians on Malaysia: our quarterly report on Malaysian consumer confidence for Q4’20, 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. This is the fourth quarter of our coverage of Malaysian Sentiments incorporating elements and impacts of the COVID-19 pandemic. Our previous coverage on Malaysian consumer confidence for 3Q 2020 can be found here.
Malaysia in CMCO as New Daily COVID-19 Cases Rising
Just as things were on track to going back to normal, Malaysia saw increasing new COVID-19 daily cases which prompted re-implementation of Conditional Movement Control Order (CMCO) by the Government, which dampened Malaysian confidence. In spite of this, our current economy and spend on major purchases indices recorded an uplift.
Malaysians Optimism Waning Slightly
We have seen Malaysians being resilient and optimistic in general in the face of all that’s going on in the country and the measures that has been taken to combat the pandemic.
However, with Malaysia seeing a drawn-out movement control period since early part of 2020, Malaysians’ perception of their finances in the next 12 months is on a slight downtrend, albeit still positive.
Malaysians Feeling Bleak With Prospects of Looming MCO
In light of the rising positive cases, there have been murmurs and calls across the country for another possible lockdown the likes of the first Movement Control Order (MCO) towards the end of Q4.
We know now that this MCO was implemented in January 2021, and we await the results of Q1 2021 Malaysians on Malaysia report to see what impact it has had on the Malaysian economy and Malaysians in general. Stay tuned…
E-wallet Usage is on a Steady Uptrend
With the movement towards a more digitalized society, usage of e-wallets has been seeing steady incline since 2019. With the Government e-Penjana Campaign at an end, usage of e-wallets corrected slightly to 56% usage from its previous 60% score in Q3.
Having said that. usage of e-wallet is firmly on a continued uptrend and things are looking positive that e-wallet is slowly becoming a mainstream payments mode for Malaysians.
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Just as the country has been opening up and businesses (even tourism sector) getting back to their usual activities, the country see a rise in new COVID-19 daily cases towards the end of Q4’2020.
Given the year-end holiday season, Malaysians are seen to be out and about which have contributed to the rise of COVID-19 daily cases during this period. And despite our Malaysian Consumer Index seeing continual uplift Q1-to-Q3, the index now recorded a decline in Q4 (3 points drop) as Malaysians are starting to feel the coming wave of COVID-19 infections, coupled with talks about the possibility of another lockdown taking its toll on consumer confidence.
With things (COVID-19 control measures) starting to loosen up across Malaysia, there have been talks of the possibility of another lockdown, alike to the first Movement Control Order (MCO) towards the end of Q4 given the increasing new daily COVID-19 cases being recorded.
Given the uncertainties, Malaysians’ consumer confidence towards their current personal financial well-being sees decline in Q4 – which is more apparent among the lower M40 segments.
And that potential lockdown is depressing consumer confidence as well when we look at the financial well-being over the next 12 months index.
In this case, it is the upper M40 and T20 groups that are being less positive, now vs last quarter, about their financial outlook in the coming year. Despite the decline in index, Malaysians remain hopeful that their financial well-being will not be affected much as an index score of 141 is pretty positive.
Since Q2 2020, the index of spending on major purchases have been steadily creeping back to the 100-point level, ending at 98-points to close the year.
With year-end holiday season coupled with major e-commerce sales in Q4, Malaysians are seen to be taking the opportunity to spend, like what we deduced in the Q3 2020 Malaysians on Malaysia report – This is especially true among upper M40 and T20 segments.
With restrictions such as dining out, limit on car passengers easing where people can move around freely and other restrictions easing in Q4 2020, our current state of economy index is recording an uptick in Q4 (+14pts).
With people being able to move around to perform their daily activities for work or otherwise, it is a good sign for the country’s economy for potential recovery. And this is reflective across all locations and income levels.
All things considered, the sentiments towards the state of Malaysia’s economy in the near future continues to tumble as the index fall into the 80-point range, suggesting Malaysians remain cautious and uncertain towards how the country can make good economic recovery in the coming year from where it is right now.
FOCUS: COVID-19 and Its Impact on Malaysia
Just as things are getting better in Q3, Malaysians are feeling the impact of COVID-19 on the economy and subsequently their financials again towards end of Q4 – 32% of Malaysians are now saying they are being affected, compared to sub-20% perceptions in the previous quarter.
With talks about the possibility of another lockdown or MCO, many are feeling worried that this time the impact towards their financial-well being will be much harder to recover from.
Malaysians are now saying it would take them at least 16-months on average (vs less than 12-months during MCO 1.0) to see recovery on their finances suggesting an increase of pessimism this time round.
In Q4, activities like online shopping on marketplaces like Shopee and Lazada to grow, with more than half of urban Malaysians aged 18+ claiming to have bought something online in the last 3 months.
E-wallets usage rates see a slight correction post-ePenjana RM50 campaign which was expected, but still posting high levels of usage by Malaysians.
Past 3 months domestic travel continue to take place especially with the year end holidays, which saw a third of Malaysians travelling. We expect this number to fall significantly as the Government re-implemented CMCO towards the end of Q4 which stopped all inter-State travel in Malaysia.
With the ePenjana RM50 initiative coming to an end since the start of Q4, usage of e-wallet sees a slight decline in Q4, however, there is a clear uptrend seen over the quarters & years for the adoption rate of e-wallets in Malaysia.
Depth of usage of e-wallets remain stable with Malaysians using an average of two e-wallets at any one time.
Touch ‘n Go has regained its user base in Q4 post-ePenjana and regains its commanding lead in the category. The surge in usage could be contributed by their current campaign The Goal Hunter where users collect stamps to earn up to 5 rewards of their own
Maybank QR overtakes GrabPay and is now at No.2 with a 24% penetration rate. FavePay makes a come back in Q4 2020 and is now one of the Top 5 e-wallet used (overtaking BigPay).
We dove deeper into the e-wallet topic in our recent blog article.
F&B outlets, Grocery places and Convenience stores (in that order) remain the key places where e-wallets are highly used. Notable mention goes to mobile reloads, which saw an increase in e-wallet usage here.
Usage of e-wallet for food delivery see a decline (with restrictions on dining out easing, more Malaysians are taking the opportunity to eat-out more).
Awareness of cryptocurrency continue to grow over time, which is interesting as we saw good developments in that space in early 2021.
Crypto-ownership by Malaysians dip slightly this quarter, this would be an interesting space to watch in our next update of this report as we see Bitcoin breaking new records (US$60,000) in its price, and not surprisingly holdings of cryptocurrency by Malaysians is generally in Bitcoin too.
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: East Asia Forum)