Malaysia heads for high-income status

Solid GDP growth is moving Malaysians up the spending-power ladder.

According to the World Bank, Malaysia is one of the most open economies in the world, with a trade- to GDP ratio averaging over 140 percent since 2010. It’s openness to trade and investment has been instrumental in creating employment opportunities and income growth. In 2017, Malaysia proudly increased its ranking in the World Economic Forum’s Global Competitiveness report to rank 25th out of 138 economies, leading the region of emerging economies. Malaysia aspires to achieve status as a high-income economy by 2020 as classified by the World Bank and as a result has been focusing on efforts to attract investments and drive productivity and innovation through political, economic and regulatory reforms.

In Q4 2017, the Malaysian economy expanded by 4.9%, continuing the strong momentum shown throughout the year. Headline inflation moderated to 3.5% in Q4 2017, mainly due to lower inflation in the housing, water, electricity and gas as well as transport categories. The central bank expects GDP growth to remain favourable in 2018, with moderate inflation coming from domestic demand, continued export growth from encouraging global demand conditions and the stronger Ringgit.

While the economy expanded in Q4 2017, consumer confidence has remained stable throughout the year. The economy continued to be the top concern for Malaysian consumers during this period, reflected by subdued consumer spending. On the FMCG front, the market hit an all-time high for the year in Q4 2017 after subdued performance over the festive periods in Q1 and Q2 2017. Modern Trade growth has come via Super/ Minimarket and Convenience store format expansion in line with the growing propensity for Malaysian consumers to shop at stores that are ‘convenient to get to’ and shops that offer low prices for most items. It is these attributes that appeal most to consumers’ changing lifestyle needs, which are driving the expansion of smaller store formats.

The digital landscape is changing the way Malaysians interact with each other, how they form their opinions and how they make purchase decisions. It is an exciting time for Malaysian media, as digital media continues to grow and traditional media innovates to keep pace and stay relevant. Increased internet usage has also positively impacted Malaysia’s e-commerce industry. Among the 17.4 million Malaysians aged 15 and above, 10% have shopped for products or services online past month. Online shoppers tend to be younger (the majority are under the age of 39), and among the most affluent (with a household income of more than RM8000) online shopping rises to a healthy 25%.

The rise of digital media, however, does not mean that traditional media is no longer relevant in Malaysia. Nielsen Consumer and Media View shows that in 2017, daily newspapers, television, radio, outdoor advertising and in-store media continued to enjoy more than 70% reach across the board.

In this environment, it is critical to embrace both traditional and new channels and formats to ensure consumers receive a consistent brand proposition across both physical and digital mediums. Authenticity and transparency are central in this highly connected world, where consumers can quickly verify claims and check price comparisons at the click of a button.

Source: campaignasia.com; 27 Aug 2018

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