Engaging consumers in this ethnically diverse ASEAN nation means understanding its distinctive cultural nuances.
Online shopping is relatively new in Malaysia – an oil-rich nation of 32 million people that boasts ASEAN’s third-biggest economy, after Indonesia and Thailand. The click-and-buy convenience and value of e-commerce is gaining momentum, however, in the multicultural urban centers.
Malaysians are well versed in buying via digital channels – the capital Kuala Lumpur is, after all, the home of AirAsia, which has revolutionized online bookings and flash discounts for low-cost flights across Asia. Smartphone equipped urbanites now book cabs via Uber and Grab, meals on FoodPanda, and accommodations with AirBnB and Traveloka. Indeed, a 2016 PWC Malaysia survey revealed only 7% of respondents had never shopped online.
Despite slowed growth in the economy, Malaysia’s e-commerce landscape is starting to diversify. Brands seeking to drive online sales should build a strategy that is mindful of a traditionally conservative consumer mindset overlaid by shifting tech-driven trends.
Here are five key considerations:
It’s no surprise in a country whose tourism tagline is “Malaysia Truly Asia” that ethnic diversity is a notable feature. The nation’s population mix of 68.6% Malays, 23.4% Chinese, 7% Indian 1% Others is spread across both Peninsular Malaysia and East Malaysia (on the island of Borneo). Malaysians of all ethnicities are fiercely proud of their national identity, however, and local brands in particular often tap into this sense of unity and shared experiences.
Brands seeking to capture the opportunities of e-commerce in Malaysia must not overlook the unique cultural considerations and religious sensitivities that impact the purchasing behaviors of different consumer groups. Malaysia is officially Muslim, but also counts a diverse mix of Christians, Hindus and Buddhists. Language must also be considered – all ATMs in Malaysia, for example, offer Malay, Chinese and English options, while various radio stations cater to speakers of Malay, English, Tamil, Cantonese and Mandarin.
While presenting varied product preferences and advertising guidelines for different ethnic groups, Malaysian diversity offers unique opportunities for marketers. A good example is leisure time. Malaysians enjoy plentiful public holidays (there will be 14 in 2017) for diverse cultural celebrations. Christmas, Chinese New Year (January/February), Hari Raya (June/July) and Deepevali (October) generate strong spending – much of which is migrating online, and offer scope for creatively themed promotions and discounts.
Malaysia’s e-commerce fundamentals are strong. It counts around 14 million digital consumers, and has a robust 3G and 4G infrastructure. The banking sector is among the strongest in ASEAN, and e-commerce payment is dominated by credit/debit card transactions (around 52% of total sales), and bank transfers (42%). Although PayPal has around 6% market share, cashless and digital wallet providers are yet to gain penetration.
The Malaysian government is proactively supporting digital infrastructure expansion in order to create jobs and boost service sector growth. In 2014, it founded the annual #MYCYBER sale in October to drive online sales nationwide, and is seeking to promote Malaysia as a cross-border e-commerce hub for halal products.
Like most of South East Asia’s emerging e-commerce markets, online marketplaces are the first port of call for brands and consumers in Malaysia. Market leaders Lazada and Mudah, plus Gemfive, 11street, Lelong, MilkADeal, Amazon, Ebay – plus niche sites like Zalora, Shopee, Logon and Qoo10 for fashions – generate strong sales and engagement with consumers.
Both marketplace operators and brands seek to optimize round-the-clock social media usage, especially Instagram, WhatsApp and Facebook, to segue online and offline engagement and build closer relationships with consumers. Marketers should carefully scrutinize social media profiles and cultural sensitivities when promoting new products and targeting exclusive promotions.
An often overlooked demand factor is the tropical climate. Located close to the equator, Malaysia enjoys year-round hot and humid weather – creating a 12-month demand for traditional summer products, such as soft drinks, ice creams, skin protection creams, air conditioning and insect repellents, while rendering Autumn and Winter fashions obsolete.
The intense heat also played a part in driving Malaysia’s strong mall shopping culture. During weekends and holidays, air-conditioned urban malls offering a broad mix of shopping, dining, entertainment, gyms and movie theatres are a popular leisure option for families, couples and teenagers. With this climate-influenced trend likely to endure, creative online-to-offline marketing is required that appeals to different aspects of the Malaysian consumer mindset.
A keen eye for value is a cherished Malaysian consumer trait. Discount vouchers and coupons are frequently redeemed in supermarkets and stores, and digital marketers now offer bundled product promotions and co-promoted products with complementary brands that appeal to a broad-based audience.
In 2016, DKSH, a Market Expansion Services provider, launched a co-branded promotion for Wyeth milk powder and Mamy Poko diapers. Both are well-known brands in Malaysia, and the joint campaign enabled the two brands to tap each other’s consumer bases and be more creative with marketing execution. To engage and interact with potential buyers and create extra value for the brands, the campaign was supported by carefully targeted digital messaging and discount vouchers.
Different consumer psyches and sensitivities overlapped by a robust national identity and changing urban lifestyles make building an omni-channel strategy in Malaysia unusually challenging. Understanding the distinctive cultural nuances while evolving with consumers in the early stages of their e-commerce journey can be a critical factor for growing sales – both online and offline.