Study: Malaysians still spending despite fears of rising costs of living

A majority of consumers in Malaysia are spending to reward themselves despite 57% of them planning to be more cautious with their spending in the next six months. 

This shows a commitment to personal satisfaction where low-income (31%), medium-income (47%) and high-income (62%) consumers reward themselves through functional spending such as eating out. 

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However, functional behaviors of high-income consumers contrast with low-medium consumers according to research study titled “2024 spending uncovered: insights and forecast of consumer spending behaviour” by OMG Malaysia and AI-driven research firm Vase.ai.

High-income consumers spend on vacations (28%), entertainment and leisure (28%) and electronics (16%) while medium-income consumers spend on apparel (22%) as compared to electronics (15%) and vacations (13%). 

Interestingly, low-income consumers spend on electronics (18%), skincare (17%) and vacations (17%). 

These three groups of consumers have differing gratification drivers. Low-income consumers tend to indulge in treats to uplift their spirits, alleviate stress and maintain a sense of normalcy amidst financial hardship. 

Medium-income consumers however are drawn to rewards that reflect their personal values and taste which are also a way to express their identity. Finally, high-income consumers seek to affirm and celebrate their accomplishment as well as reinforce their social standing and success. 

The research also found that brand fundamentals such as trust, value and accessibility are primary influences of brand stickiness. 

A more streamlined consumer journey is also observed. Platforms such as Shopee, TikTok Shop, TikTok Live and Shopee Live are gaining popularity amongst Malaysian consumers, surpassing Instagram. Facebook Marketplace continues to see a lower adoption, said the study. 

As such, brands that are lacking strong loyalty or distinct benefits must emphasise awareness to capture market share and reinforce brand fundamentals across the entire purchase journey. 

Today's consumers are also exploring multiple options to secure the best deals so marketers should emphasise full-funnel marketing in their strategies too. 

Interestingly, Malaysian consumers are leading the charge in embracing alternative payment methods and cutting-edge technologies, according to a report by global financial technology platform for business Adyen. 

According to the report, 63% of Malaysians utilise mobile wallets for transactions, boasting the highest adoption rate globally. In addition, 41% of Malaysians now rely on mobile-enabled solutions like tap-to-pay, with 36% of consumers admitted that they no longer carry a physical wallet.

As such, technology such as kiosks, and one-click checkouts are becoming increasingly popular among consumers, driving demand for more efficient in-store experiences, said the report. 

As a result, businesses have pursued to diversify their platforms, with 73% of retailers embracing social commerce and personalisation to foster stronger customer loyalty.

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