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Consumerism in Malaysia, How Startups Can React With Confidence

This year, ASEAN’s top five economies are forecasted to register a grand GDP of US$ 1,889.84 billion.  Malaysia’s share is estimated at 14.16%, a clear sign of the country’s vitality as a regional powerhouse driving growth and development.  Like any other globalising economies, foresight stems from logical interpretations of data and trend, enabling cold-calculated risk taking for aspiring enterprises.

Since 2010, Asia’s ad impression through mobile apps and smartphones grew by 113% and 41% each.

Meanwhile, the average Malaysian consumers’ acumen in retail brands and promotion savvy is largely virtual, with 69% likely to respond positively to online advertising.

To quote from AC Nielsen’s David Webb, “As social media increasingly becomes a mainstream activity, brands have been quick to ‘get on board’ to better understand and connect with consumers when it comes to their advertising strategies, engagement and conversion.”  Comparatively 73% of Southeast Asia’s consumers are likely to be moved by advertising using social media platforms such as Facebook and Twitter, a figure high by global standards.  Both Indonesia and Malaysia, two culturally and economically intertwined countries, fare high at 64% and 63% respectively, ahead of fellow ASEAN member Singapore, at 53%.

Polling a trend typical to capitalist economies, most people are likely to engage in petty consumerism that reflect a general spread of disposable income, namely on luxuries such as food, clothing and value-added experiences.   Out of the 10.9 million Malaysians who do shop online, between 50 to 60% spend on items with rapid turnovers, such as tech accessories, movie tickets, and general consumer goods.  Faring lower, but still significant are jewelry, CDs and DVDs, and computers, at 43-48%, presumably for reasons of security, triviality or simply a matter of confidence.  Top of the list among those who made the aforementioned purchases are books and travel itineraries, including air tickets, ranging from 69 to 82%.  Recently, MHBuddy, a Facebook app by Malaysian Airlines (MAS) won praise by for its innovation in simplistic usability.

Entrepreneurs should take good note of this to better poise their products and services to meet a set of more affluent, mature and mobile target consumers.  Close to 54% those fall within the age bracket of 26 and 40, with those between 26 and 30 at 19.7%, the largest by far.  Introducing gaming, health and lifestyle products and services with mature, sophisticated content to this younger, coming-of-age group may well be a food for thought for upcoming startupers.  Another important point to ponder, 38
% of Internet users polled in 2010 “do not need to buy online,” and at least 28% are discouraged due to logistics and “not having credit cards.”  Startup products and services would have to worry less about tech illiteracy and pricing, instead coming up with more creative ways of quality and servicing, as evident in more than 50% of online shoppers believing in reliability and safety issues.

Late in 2011, the 4th Mobile Commerce Summit ASIA held in Kuala Lumpur gathered regulators, retailers, telecom operators, banks, payment processors, technology providers and hardware vendors to explore comprehensive and effective platforms for all the stakeholders to share, discuss, explore, learn and take the first movers’ advantage.  And the infrastructures are being laid down through key initiatives, as the Malaysian government already mandated the Multimedia Development Corporation to draft a framework a digital Malaysia.  It seems that the society is headed towards some degree of k-maturity.  Already in the Asia Pacific, the country ranks sixth in the Global Information Technology Report 2009-2010, coming behind Singapore, Hong Kong, Taiwan, South Korea and Japan.

Related at Evan Hugh:

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  2. Startups: Malaysia’s Tablefour.us lets you reserve table at fav restaurant via iPhone
  3. 2011 and some interesting startups
  4. Startups: FindTheBest gains $6 million round of financing
  5. TechVenture 2011: 5,000 new tech startups registered in Singapore every year