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.
Q4’2024 unveiled mixed sentiments regarding the country’s future outlook. The current MYCI stood strong compared to the other Q4s, promising continuous recovery in the nation. While there are fluctuations in technology trends, Malaysians remain informed in the digital landscape, laying the foundation for the digitalisation goal. It is recommended to revisit Q3’2024 MOM before diving into this chapter.
MYCI Highest Among All Previous Q4s
The MYCI in Q4’2024 is recorded at a score of 141 points. Although this figure represents a decrease from the previous quarter, it has surpassed all prior scores for Q4 since 2018, demonstrating a year-on-year increase. This trend reflects an improvement over the years, also evidencing the collective efforts undertaken by the nation.
Shifts in Economic Sentiments
Mixed sentiments are the most prominent when looking into different economic aspects. Expectations for the economy in the upcoming year have fallen to 119 points, often stemming from fear of uncertainty as we enter a new year. Yet, it is crucial to acknowledge the opportunities the nation is garnering in key areas such as investments and exportations, which could help stabilise and boost the economy.
E-Wallet Leading the Charge
E-wallets continue to thrive in digital payment, with adoption rates rising to 94%. Nevertheless, the average monthly spending has decreased compared to Q3, currently sitting at RM334. This contrast could be attributed to the rise in the number of transactions made with e-wallets, especially when impulsive and small purchases tend to occur more frequently during year-end seasons.
If you’re eager to dive deeper into the numbers and gain a more nuanced understanding of the forces shaping the future of business and finance, 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 MOM report.
In Q4’2024, the MYCI stood at 141 points, exhibiting a dip from the last quarter. While the index remains elevated and is the strongest when compared on a yearly basis, this shift reflects a more cautious outlook among Malaysians as sentiments across key areas adjust. These key areas can often impact the outlook directly or indirectly, including exports, investments, employment, and consumer spending.
That being said, the country has seen a decline in exports, signalling a slowdown in supply. Meanwhile, with investment plans remaining in progress but have yet to be confirmed, a sense of uncertainty in long-term economic prospects accumulates. However, on a positive note, the unemployment rate has reached its lowest level in nine years at 3.1%, providing stability for many households and reinforcing confidence in the present job market.
Henceforth, this brings to the five components of MYCI, except the current state of financial well-being, registering sharper downturns in Q4’2024.
Extending from the above, the Q4’2024 state of financial well-being withstood pressures and reached an unprecedented high of 168 points. A steady improvement has been observed throughout the year, indicating that Malaysians are in a relatively strong financial position amidst ongoing economic recovery. This trend aligns with the previously mentioned employment rate where not only has the lowest unemployment rate been recorded, but it has also seen an overall upward trend in employment.
One of the contributing factors is Malaysia’s robust tourism sector, which welcomed 38 million foreign tourists in 2024. This influx significantly opened job opportunities and boosted local businesses, particularly hospitality and retail. In October and November 2024 alone, wholesale and retail trade sales approached RM300 billion, with non-specialised stores, food and beverages, and specialised stores booming in demand. Beyond driving cash flow, this expansion opened job opportunities across respective sectors.
Additionally, inflation showed its first decline since 2021, with the consumer price index (CPI) dipping slightly to 1.8% in November. While not a dramatic drop, the slight decrease may have reinforced perceptions that purchasing power remains intact, at least in the short term.
It is palpable that the sentiments above have affected how Malaysians perceive their future financial well-being, specifically when entering a new fiscal year. Despite the resilience in current financial well-being, Malaysians’ confidence in their future financial outlook saw a drastic downturn, dropping to 157 points — the lowest sentiment recorded in 2024, although still the highest among all Q4s historically.
This growing apprehension about long-term financial prospects when welcoming a new year is undeniable and often influenced by various factors, including global economic uncertainties, fiscal adjustments, and political movements. Looking at inflation, the Ministry of Finance has warned that Malaysia’s inflation rate could reach an eight-year high in 2025, following subsidy rationalisation. Inflation is projected to rise between 2% and 3.5% in 2025, compared to the 1.5% to 2.5% forecast for 2024.
Given this outlook, it is unsurprising that Malaysians have adopted a more cautious stance, with concerns that rising prices will extend beyond wholesale and retail trade to essential goods. As a result, sentiment surrounding future financial well-being has taken a notable negative shift as households brace for potential cost increases in 2025.
Likewise, the conservative stance is reflected in spending behaviour, with sentiment towards major purchases reducing to 141 points in Q4’2024, illustrating it as a less favourable time to spend and buy. Other than concerns over inflation, Malaysians may also likely be holding off on spending until the upcoming major cultural festive seasons. With the Chinese New Year in January 2025 and Ramadan beginning in March 2025, it is expected to stimulate a fresh wave of retail activity.
This cautious approach is especially noticeable in the automotive industry, where new vehicle sales saw an 8% decline in both October and November 2024. The downward trend signals increased hesitancy towards big-ticket purchases, likely influenced by expectations of economic uncertainty or anticipated special festive deals.
Building on the sentiments, Malaysians’ confidence in Q4’s state of the economy reflected a mix of emerging concerns. While the economy maintained steady growth, current sentiment slumped, falling to 120 points from 139 points in Q3. This suggests that despite overall stability, uncertainties in key sectors have influenced Malaysians’ perceptions.
One notable factor is the palm oil market which faced a decline in exports due to production hitting a 19-month low as an outcome of precipitation and floods; such condition is expected to be carried forward to January 2025 as well. Given palm oil’s significant role in Malaysia’s economy, it isthis likely contributed to the more cautious interpretation of the current economy. Ongoing fiscal adjustments and global economic pressures have further shaped Malaysians’ sentiments.
Looking ahead, anticipation of the future state of the economy declined as well, falling to 119 points in Q4’2024. Although concerns about subsidy rationalisation and inflation are valid, Malaysia is envisioned to sustain economic growth in 2025. The country has been attracting and building its strong investment base, ranging from cloud facilities, digital and tech ecosystems, infrastructure projects, and green energy which presents a potential buffer against economic slowdowns. These foreign direct investments and large-scale development projects could support domestic and labour demand, mitigating some of the apprehensions. It is important to note that despite these concerns, Malaysia’s economic fundamentals remain strong on the road of recovery and strategic policy measures from the government could foster greater confidence in the year ahead.
Over the past three months, consumer behaviours in Malaysia have undergone notable shifts. Changes are observed in how they did the shopping, payment, travel, dining, and leisure activities.
Online purchases from e-commerce have seen a substantial uptick, soaring from 38% last quarter to 73% in Q4. This trend is indicative of the increase in spending during the holiday season, particularly on small purchases when people usually do gifting. Besides being the highest record for e-commerce purchases, Q4 also completed the year-long upward trend and further contributed to the already booming e-commerce industry in Malaysia, where their income has accumulated to RM918.2 billion in the first three quarters of 2024.
Malaysians’ habit of making payments is shaping and encouraging the country’s digitalisation prospects too. All areas of digital payment have experienced an upward trend throughout the year. In Q4, payments made through e-wallets have increased to 94% from 90% last quarter. Payments made through banking apps also soared to 87% from 72% in Q3. The Buy Now, Pay Later (BNPL) feature has gained the most traction where it skyrocketed to 41% from the previous 18%. This behaviour of adopting and valuing digital finance solutions highlights the efforts made to promote and provide them.
In conjunction with the year-end holiday season, Malaysians’ tendency to travel has also increased significantly, both domestically and internationally. Domestic travel has surged to 50% from 32%, while international travel has increased from 12% to 23%. During the season when people typically make family/friends trips or visit relatives, along with previously acquired travel deals from events like the Matta Fair, this increase is not surprising.
All of this also led to more convenient eating habits, as people are often on road trips, on the go, or simply want to avoid the hassle of preparing a meal when gathering with others. The most significant increase in dining options has been observed in convenience stores and through third-party delivery apps, which saw a rise of 36% and 22%, respectively.
These evolving behaviours underscore the complex interplay between technology, consumer preferences, and broader market forces that continue to shape spending habits in Malaysia.
E-wallet usage in Q4’2024 reached a record high of 94%, marking a steady upward trajectory throughout the year. This increase in adoption reflects the growing reliance on digital payments for everyday transactions.
Nevertheless, despite the rising adoption rate, the average monthly e-wallet spend declined to RM334 from RM414.1. This suggests that while more people are using e-wallets, they are making smaller, more frequent transactions rather than one-off, larger purchases in Q4. The seasonal nature of spending patterns, particularly towards the end of the year when consumers often make multiple purchases for gifts, can explain this trend; the ease of checking out via e-wallets allowed and reinforced consumers to make impulsive or low-value purchases.
Similar trends were observed in physical transactions, where digital payments reached an all-time high of 71%, significantly exceeding cash usage at 29%. The shift away from cash is not only a reflection of changing habits but also signals broader economic and technological advancements. This push for digitalisation in financial services is hopeful to extend beyond urban cities, reaching more rural areas where financial inclusion has been a longstanding challenge. By encouraging greater adoption in these regions, digital payments can contribute to economic participation and efficiency, ultimately closing the gap for underserved communities.
A closer look at digital payment preferences reveals that debit cards have overtaken e-wallets as the most widely used cashless payment method, with a 20% share in Q4’2024. E-wallets follow closely at 15%, with banking apps trailing at 14%. Other methods, including bank transfers, credit cards, and BNPL services, account for a smaller proportion of transactions. These shifting preferences highlight the dynamic nature of consumer behaviour, often influenced by promotional offers and incentives provided by payment providers.
Continue dominating the e-wallets sector in Q4’2024 is Touch ‘n Go, maintaining at a strong usage rate of 88% despite experiencing a slight dip. In contrast, other major e-wallets have recorded growth, with MAE by Maybank at 56%, GrabPay at 25%, Boost at 23%, ShopeePay at 21%, and BigPay at 15%.
The slight decline in Touch ‘n Go user rate could be linked to its recent requirement for users to verify their accounts via eKYC by December. While the verification process is relatively simple, it may have temporarily deterred some users, particularly those using multiple e-wallets, who might have opted for alternatives.
Additionally, the competitive landscape in the e-wallet sector remains highly fluid, with platforms constantly rolling out new features, cashback incentives, and rewards to capture and retain users. The increasing diversity of options means that consumers are now more likely to switch between e-wallets depending on which offers the best deals, rather than committing to a single platform. As competition intensifies, user loyalty is likely to be shaped by the ability of e-wallet platforms to innovate, expand their merchant networks, and offer compelling value to consumers.
E-wallets continue to be most commonly used for food and beverage purchases (76%), groceries (66%), and CVS (61%). Notably, e-commerce purchases followed at 39%, presenting evidence of the preference for e-wallets when shopping online. The widespread availability of digital payment options has added significant convenience for consumers, with those offering the most attractive promotions often seeing the highest adoption. For instance, restaurant partnerships with Touch ‘n Go that provide reward points have likely contributed to sustained usage in the dining sector.
Moving on, Q4’2024 demonstrated the effect of a seasonal shift on tech trends. As this quarter coincides with the holiday season, consumers’ attention tends to shift towards travel, celebrations, and family activities, naturally drawing focus away from financial topics or emerging technologies. In light of this, Q4 experienced declines in awareness and familiarity with most tech trends, although a few exceptions stand out.
E-sports, Virtual Reality (VR), and Digital Bank are among the threes gaining more momentum; all three experienced a surge in awareness, standing parallel at a high 94%. Among them, familiarity with VR jumped to 59%, signalling its saturation in the country. With the launch of affordable products like the PICO 4 Ultra, Malaysians now have greater opportunities to experience realistic sensations in a virtual world and bring more momentum to this topic. Meanwhile, despite a dip in familiarity (59%), e-sports continued to gain attention, with a staggering RM230 million allocated in Budget 2025 to advance the thriving scene. Likewise for digital banking — while discussion still revolves, it would take time for the public to grasp the relatively new concepts and build familiarity, especially when more digital banks with different services are introduced to the market.
It is important to note that amidst the abate in other tech trends, awareness remains high, exceeding the 70% threshold. This indicates that Malaysians are firmly engaged in the technology realm. With a little more push, providers in relevant sectors could strengthen their connections with consumers.
Of those who are aware of cryptocurrency, ownerships in Q4’2024 have topped 60%, marking a 3% increase from last quarter. This implies an ever-growing interest in digital assets, with more Malaysians willing to explore and invest in a decentralised system.
Cryptocurrency adoption in Malaysia is gradually taking shape. From the introduction of regulated, official platforms for crypto trading such as Luno to the government’s recent move allowing zakat payments with digital assets, each development underscores the increasing significance of cryptocurrencies in the financial landscape. With these strides, there is a clear indication that crypto will soon be reviewed and recognised as legal tender, bringing the nation one step closer to the digitalisation prospect.
The types of cryptocurrencies owned by Malaysians are largely consistent throughout 2024. Bitcoin Cash and Bitcoin continue to lead at ownership rates of 30% and 23% in Q4, respectively. Following them are Dash (16%), Litecoin (15%), and XRP (13%).
The trends of Bitcoin Cash and Bitcoin are notably correlated. Bitcoin Cash, in particular, saw unexpected gains in November, surging by 106% to trade at $537, breaking the post-halving consolidation zone. This rally, alongside key events like the U.S. presidential election, has drawn significant attention to the crypto market and expectations on both Bitcoin Cash and Bitcoin, further boosting ownership.
As the landscape for cryptocurrency continues to evolve, Malaysia’s growing acceptance and adoption of digital assets signal a promising future for the nation’s financial digitalisation. With government support and increasing public interest, it seems that the journey toward cryptocurrency integration is well on track.
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.
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