Social media the main channel of product discovery in MY, finds Facebook study

Social media's influence is found to be the strongest in Malaysia, with 58% of consumers using it to discover new products. According to the "Riding the Digital Wave: Southeast Asia’s Discovery Generation" study by Facebook and Bain & Company, over 40% of Malaysians have tried an online store they have never heard of in the past year. Additionally, social media advertising accounts for almost 60% of discovery today.

In a statement to A+M, Nicole Tan, country managing director, Facebook Malaysia, said the beauty of shopping online is not just the ability to shop from virtually anywhere (granted there is internet connectivity); but also a plethora of product options that are easily available online with just a swipe of a button.

The top three reasons for making an online purchase were positive reviews from other users, good deals or promotions and interesting products.

According to Tan, 78% of Malaysians learn about new products and brands online. Thus, taking cues from the users all over, Malaysia has moved into a world of endless online possibilities. Positive feedback, on overall use of an online shopping site to the quality of the products can easily entice a first-time shopper to start her online purchase. That said, Facebook noted that the purchase journey doesn’t just happen online as one-third of Malaysian shoppers compare products in-store before buying online

Tan also explained that the best thing about online shopping via the internet or mobile is that most brands, retailers and merchants are constantly throwing the best discounts or rewards for their consumers. The bigger the offer, the more consumers it attracts to its product site. However, while discounts can help acquire new customers, they don’t necessarily build loyalty.

As discovered in the study, 48% of Malaysian consumers don’t wait for sales or promotions to buy things they want.

According to Tan, 70% of the respondents are either open to other brands or will buy from multiple brands when shopping online. This means businesses of all sizes, including specialty players have a significant opportunity to compete on a larger scale in Southeast Asia, she said.

“There is no longer just one way to shop and nobody shops the same way twice. The key takeaway is that designing for discovery is absolutely crucial, given that customers engage with a business through multiple channels at the same time," Tan added.

Digital spending in Malaysia is also expected to grow by 2.7 times from 2018 to 2025, in a market that is estimated to be worth US$9.1 billion by that time.

In fact, by 2025, the study said that the increase in Malaysia’s online spending will outpace the growth of digital consumers in Southeast Asia by at least twice - with new horizons in growth especially in clothing and personal care as the leading categories, Tan said.

Malaysians known to shop hop

Beyond discovery, Southeast Asian consumers are known to shop-hop across 3.8 platforms on average, according to the study. In Malaysia, Tan said the number is even higher as online buyers shop across 4.2 websites before making a purchase. According to Tan, the fragmentation in the market presents an opportunity for companies to build customer loyalty by 'building new muscles' to compete in the changing face of retail as insurgent brands discover different approach to capture the hearts of today’s online shoppers.

"This means brands, no matter how big or small, have to get savvier and creative in the way they approach these online shoppers: By having a compelling founder’s story with a purpose or emotional narrative, offering unique and personalised products, selling affordable luxury, and having a direct-to-consumer business model, insurgent brands continue to claw at the market," Tan explained.

Meanwhile, Gwendolyn Lim, partner at Bain & Company, Singapore added that long-term savings is the biggest motivator for Malaysians to become loyalty programme members, with 40% surveyed said that they are part of one. Malaysians with a loyalty programme are 45% more likely to make recommendations and are 20% more likely to have higher purchasing frequencies and higher spending across categories. The most popular categories include toys and baby care, personal care and beauty; and consumer electronics and accessories.

According to Lim, brands need to be very savvy and re-imagine their marketing and trade spend to be in sync with the ever-evolving omnichannel consumer journey.

"Brands that want to win in the ever-evolving omnichannel consumer journey need to understand what customers are looking for in their category, work to solve needs and pain points, and customise loyalty to differentiate themselves, all while delivering with consistency," she added.