Challenger brands will need to be innovative with their marketing strategies in Malaysia, with consumers likely to delay discretionary purchases and focus on the essentials.
Despite an improved outlook for 2020, Malaysians seem to be reserved about their spending, with more than half of respondents to a new survey expressing some reservations about the state of their personal finances. According to results from a survey commissioned by PHD, a media agency and Vase, a consumer intelligence platform, the results reaffirm a common consumer trait during these tough times.
In these challenging times, marketers will have to invest in promotions and discounts, especially across e-commerce channels and digital wallets, to lure tight-fisted consumers to spend. While doing so, the makers of this survey reckon that marketers can leverage these platforms’ digital edge and shift consumers plans from just awareness of a brand to being actual buyers.
To stand out in a challenging market, marketers will need to invest their budgets in a full funnel experience--from awareness to conversion-- to push reluctant consumers to loosen their purse strings. In a cluttered market and with tight budgets, marketers will need to wisely invest and position their brands distinctively in the mind of the consumers.
The next year is likely to be a challenging one for marketers and brands. Respondents to this survey said they are likely to bring forward their cautionary spending into 2020. During this time, consumers are likely to spend on the essentials such as food and household products, even as they cut back or delay on discretionary spends on luxury goods, overseas holidays and leisure outings.
These results are in line with recent data on the Consumer Sentiment Index, from the Malaysia Institute of Economy Research (MIER), which saw the lowest index of 84 since Q4 2017. According to data from the country's Ministry of Finance, the economy's growth will be flat at 4.8% in 2020, compared to 4.7% in 2019. Other key metrics such as unemployment and inflation will remain flat at 3.3% and 2% respectively.
Despite this bearish outlook, a slim majority of respondents expected economic conditions to improve. The year 2020 is looking better than what consumers experienced in 2019. Cost of living, Malaysia’s financial position, affordable housing and job security are the four most critical areas affecting consumers’ sentiments and 51% of consumers are hopeful that 2020 will be better than 2019, while 29% expect things to stay the same.