Malaysia’s consumer confidence index has had a steady climb upwards since the start of the year with a six points increase to 99 in Q3 2014.
This is according to the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions study. This places Malaysia at the 18th position as the most confident country globally while global consumer confidence remains steady at 98 points.
“After getting through the first half of 2014 where aviation disasters and global economic downturns dominated the headlines, we are now seeing consumers refocus on family matters and become less concerned with the economic future of the country and their personal financial future,” said Richard Hall, country manager for Nielsen Malaysia.
He added that although this is a positive trend, Malaysian consumers continue to remain vigilant of their on-going and future spending habits and are constantly mindful of the fragile state of the global economy.
FMCG reaching a plateau
Meanwhile in Q3 FMCG sales value registers marginal growth compared to previous quarters.
Consumer purchasing power in the third quarter showed only a slight rise in the Fast Moving Consumer Goods (FMCG) category. FMCG value sales figures tracked by Nielsen revealed a 0.7 percentage point growth in Q3 2014 as compared to the previous quarter. This was caused by a sales spike in the beverage, cooking mixes and stocks and seasoning categories due to the Hari Raya celebration.
Hall explained that the Malaysian FMCG market is fairly flat now and has been for some time despite consumers not cutting spending on FMCG. This lack of enthusiasm is because of the lack of “dynamism in the market so the incentive for companies to invest has been diminshed” against that of a few years ago.
“The rise of the Hypermarket and Supermarket trade sector has reached saturation point in terms of store openings and growth across the market has slowed with it. It used to be that every new Hypermarket opening would generate huge consumer interest and really stimulate spend but with the proliferation of malls and the choice available for consumers a new store opening is just normal nowadays,” added Hall.
What are Malaysians concerned about?
Although the economy, increasing food prices and work/life balance lead Malaysians’ top three key concerns in Q3 2014, these concerns registered a slight dip in percentage points in Q3 compared to previous quarter. Around 33% of Malaysians cited the economy as their main concern (down 4 points), followed by 19% of consumers who are worried about increasing food prices (down 2 points) while 17% Malaysians are worried about work/life balance (down 1 point).
On the contrary, the survey also revealed that Malaysians are increasingly anxious about their health (up 3 points to 14%), the increase in fuel prices (up 2 points to 11%) as well as their parents’ welfare and happiness (up 3 points to 10%) and their children’s education/welfare status (up 4 points to 9%). (See chart 3).
“It is encouraging to see Malaysian consumers redirect their attention to focus on family health and happiness and this shows that although they are still generally concerned about their financial future, they are reprioritising and making more time to think about family matters,” said Hall.
Comparing the region
The Nielsen survey also revealed Indonesian consumers are the second most confident globally, with the country’s consumer confidence score increasing by two points to 125 in Q3 2014 compared to previous quarter.
The Philippines remains third most confident globally, scoring 115 points. Thailand’s Consumer Confidence Index score showed the highest jump in the region with an increase of eight points to 113 compared to last quarter.
Consumer confidence in Singapore jumped five points to 103, the highest level since late 2011, while Vietnam’s Consumer Confidence Index jumped three points to 102, the highest level since late 2010.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was established in 2005 and measures consumer confidence, major concerns, and spending intentions amongst more than 30,000 respondents with Internet access in 60 countries.