Online shopping is gradually becoming the new normal for Malaysians. Almost half of Malaysian consumers making online purchases at least monthly, said a new PwC’s Total Retail 2016 Survey (Southeast Asia report).
This growth is encouraging considering that Malaysian consumers are relatively new to the online marketplace. Nearly 60% of Malaysians respondents to PwC’s survey reported buying online only within the last three years. This includes usage patterns of mobile phones to make purchases, where Southeast Asian consumers are leading the world.
Nearly 66% of consumers in Malaysia and Singapore use their phones to make purchases (the global average is 54%). Malaysian consumers are ahead of other Southeast Asian countries in terms of reading reviews on social media (69%) and accessing promotional offerings (74%).
Scott Constance, senior executive director and retail and consumer consulting leader for PwC Southeast Asia Consulting added Malaysian consumers are relatively new to the online shopping market but are "clearly on the leading edge globally in the areas of mobile and social shopping".
He added this expands the universe of possibilities for retailers who want to engage individually with their consumers, but also presents a challenge to retailers as consumers broaden their range of channels for interacting with brands vying for their attention.
According to the study, Malaysian consumers make it clear that they want the retail store to be a portal to the wider brand experience and product assortment. They want more knowledgeable sales associates to guide them on the journey. They want the ability to order an extended range of stock across a store network or brand, and the ability to gain access to information about product availability at other retail locations.
The study added the threat to retailers from not providing this experience is worrisome—the lack of access to products desired by consumers locally could lead to lost sales. It is a key factor motivating 61% of Malaysian consumers to buy from retailers outside their own country.
Constance added that it is important for brands to consider how strongly today’s consumers, primarily millennials, are driven to buy or experience things because of the fear of missing out (FOMO), and to use that as an incentive to evolve amidst rising competition.
The single most important factor which will keep retailers truly fit for the future is the ability to earn trust by delivering on what consumers want, even if it means going outside the four walls of the store to make it happen.
"It’s also critical for brands to follow through by creating new value for these consumers through technology and new innovations,” he said.
Back end challenges
Consumers in Malaysia, like those around the world, are demonstrating a continually increasing desire for faster service at a location of their choice. Over 60% of consumers in Malaysia have a willingness to pay for same-day delivery of online orders—and there is growing awareness and demand for delivery within the hour. The same trends are occurring in other countries across Asia.
But there is a challenge: Brands competing to serve these consumers face a complicated set of consumer preferences for payment and order fulfilment across Asian countries. In some cases, commerce is facilitated by the wide adoption of credit and debit cards or proprietary electronic payment networks. In other Asian countries, cash remains the most preferred payment option, complicating the effort to fulfil orders for delivery, with adoption of electronic payment options lagging behind.
Constance added the complexity of the back-end of commercial transactions outside of the bricks and mortar environment is a major challenge for brands in Southeast Asia.
"Consumer expectations for service and responsiveness are no different if not higher, and many companies’ supply chains struggle to meet the challenge with patchwork processes, technologies, and infrastructure not built for purpose. It’s an area ripe for innovation in the coming years as brands evolve to fulfil consumer demands,” he added.
The Southeast Asia report features local insights from our survey of consumers in Malaysia, Singapore, and Thailand. It illustrates what drives Southeast Asian consumers differently from consumers around the world.
In PwC’s most comprehensive Total Retail survey to date, nearly 23,000 online shoppers in 25 countries revealed the changing behaviours that will drive the coming retail revolution.