2020 RETAIL TRENDS IN MALAYSIA - The merchant's guide to profit-boosting strategies & smarter business growth - Marketing in Asia
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2020 RETAIL TRENDS IN MALAYSIA
2020 RETAIL TRENDS
IN MALAYSIA
The merchant’s guide to profit-boosting
strategies & smarter business growth
FOR MEDIA USE ONLY
Food & Beverage Retail Health & Fitness Beauty Activities & Services
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2020 RETAIL TRENDS IN MALAYSIA
Your customers are evolving.
Are you?
The story of Southeast Asia today is one of transformation.
Across the region, countries including Malaysia are racing
to move towards a progressive, cashless society by 2021.
Forward-thinking retailers (or merchants) are already
embracing digital forms of commerce and leapfrogging
from cash to cashless payments — but not fast enough.
High mobile penetration in Southeast Asia is resulting in a
shift: digitally-savvy millennials and Gen-Z consumers are
fast replacing traditional wallets with smartphones. This
shift means better, cheaper and quicker access to money for
consumers across the region.
In response, Malaysia is hastening its pace. Tabled at the
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Malaysia Budget 2020, the government will provide RM30
to e-wallet users aged 18 and above earning less than
RM100,000 annually — a pivotal move to encourage the
adoption of e-wallets.
As a merchant poised for growth, it is critical for your business
to keep up.
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2020 RETAIL TRENDS IN MALAYSIA
In this exclusive 2020 Retail Trends in Malaysia whitepaper,
we compiled valuable insights into cashless payments in
Malaysia. Based on our experience with offline-to-online (O2O)
merchants, explore trends that are shaping the country’s
cashless revolution, its impact across various business
categories, and insight into profit-boosting strategies this year.
Are you powered with the right tools to optimize sales, slash
costs, and keep customers coming back?
Focus on growing your business.
Are you ready to do better?
The time to act is now.
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Merchant = Storekeeper or retailer with a physical storefront.
O2O = offline-to-online merchants; traditional merchants with
a physical storefront making the transition to expand their
business online.
*Source: (April, 2019) Asia driving global mobile payments, with eight in top 10 markets, ZDNET
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2020 RETAIL TRENDS IN MALAYSIA
Digital Payments 2019:
A Brief Glance
Southeast Asia
Mobile
Population: internet users:
662m. 416m.
Transaction value:
> RM427,400 m.
( 20.3% year-on-year)
MALAYSIA SINGAPORE
Population: 32M Population: 6M
Mobile internet users: 25.84M Mobile internet users: 4.92M
Transaction value: Transaction value:
> RM50,900 m. > RM58,600 m.
( 20.6% y-o-y) ( 16% y-o-y)
*Digital payments = consumer transactions that
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include payments for products and services, which
are made over the Internet as well as mobile payments
at point-of-sale (POS) via smartphone applications.
Sources: Statista; ITU; DataReportal by Hootsuite & We Are Social
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2020 RETAIL TRENDS IN MALAYSIA
TOP 3 RETAIL TRENDS
IN MALAYSIA
Cashless
payments
accelerate
growth
pg.6
Customer
loyalty builds
revenue
pg.9
Data drives
smarter
decisions
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pg.11
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2020 RETAIL TRENDS IN MALAYSIA
TREND #1
CASHLESS
PAYMENTS
ACCELERATE
GROWTH
One small step for cashless payments,
one giant leap for merchants
Across Malaysia, there is a surge of interest in the
cashless revolution.
The rise in mobile Internet usage, e-wallets, and cashless
payments are paving the way for digitally empowered
merchants. An increasing number of offline merchants across
various segments are recognizing the potential of cashless
payments in growing their business — and eagerly making the
transition to take their business online.
The beauty and wellness sector, in particular, face greater
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potential than others, making digital payment trends an
important topic for merchants to follow. Food and beverage
(F&B) merchants at the forefront of the digital commerce wave
will be well-positioned to benefit from the cashless revolution.
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2020 RETAIL TRENDS IN MALAYSIA
Why go cashless?
1 Speed up payments
It takes much less time to process a cashless payment
compared to processing a credit card payment. Merchants
especially small- to medium-sized retailers are able to cut their
payment wait times and increase the number of transactions
in a day. Without having to count money and balance the
books, there would be fewer mistakes, and more time to focus
on growing the business.
2 Opt for a secured environment
There is less risk at stake with cashless payments. Merchants
sleep easier at night knowing that they don’t have to balance
the books at the end of the day, manage large volumes of
cash in-store or spend additional time traveling to the bank to
deposit their daily cash earnings.
3 Make smarter business decisions
Forward-thinking merchants are becoming data-driven in
their decisions. They now have insight into their business
transactions including transaction data and customers’
spending habits — all in real-time. Armed with actionable
insights, merchants are able to evaluate their business
strategy and devise marketing tactics.
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2020 RETAIL TRENDS IN MALAYSIA
Cashless Payments in Malaysia
250 Steady growth
over the last five years
in value of cashless
transactions*
200
value of cashless transactions* (RM bil)
150
Annual
100 savings up to
50 50%
on transaction
fees, from
0 cashless
2015 2016 2017 2018 2019 payments.
*Source: Bank Negara Malaysia
With a digital merchant platform, merchants save up to
648 hours* a year, in reconciliation of payments
*a traditional offline merchant spends an average of 2 hours a day, manually balancing
the books and depositing their earnings into the bank.
The cashless revolution
has spread to
30+
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cities across
13 states in
Malaysia
PAY
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2020 RETAIL TRENDS IN MALAYSIA
TREND #2
CUSTOMER
LOYALTY
BUILDS
REVENUE
Getting new customers is a good way to grow — but getting
your existing customers to return is even better. Merchants in
Malaysia have discovered untapped revenue potential with their
return customers. How? The answer is simple: Cashback.
With every 100
customers, at least
70 return to the
same merchant.
Cashback has proven to be a timeless strategy for building
customer loyalty and increasing repeat customers. There’s
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nothing like a perk to bring in even the most secluded
customer, especially when the cashback is only available at the
merchant outlet.
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2020 RETAIL TRENDS IN MALAYSIA
Did you know?
Cashback
RM9.30 ROI
gained for every RM1 cashback
drives up to issued, higher ROI than Google
70%
Ads. For every RM1 spent
promoting your outlet via
Google Ads1, you only gain an
of repeat average of RM4 in return.
customers 1
Return on Investment (ROI), Google Ads Help
Optimize non-peak “For every RM1 cashback that we
hours by up to give, customers come back and
2.5X
spend at least RM7.”
- leading F&B merchant in Malaysia.
in sales
“At least 33%
of our customers
Slash up to are repeat customers,
RM50K
a year in marketing
with every RM1 cashback we give to
customers generating up to
costs with the use 15X in sales.”
of cashback. - business owner of a leading F&B franchise in Malaysia.
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102020 RETAIL TRENDS IN MALAYSIA
TREND #3
DATA
DRIVES
SMARTER
DECISIONS
Merchants are making smarter,
data-driven decisions
Which of your products generate the most orders in a week? How
do you know which segment of customers to target for additional
promotion? The answer to these questions and more is a core
reason why traditional, offline merchants are expanding their
business online.
Based on our research, merchants in Malaysia are gaining a
competitive edge by becoming more data-driven in their business
decisions. They are analyzing sales trends, customers’ spending
habits and devising promotional strategies to optimize their
non-peak hours. Easy access to data in real time also supports
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merchants in obtaining micro-loans from financial institutions.
Armed with actionable insights, merchants are able to make
smarter decisions to grow their business.
How much insight do you have into your business right now?
112020 RETAIL TRENDS IN MALAYSIA
Did you know?
At least
98%
of merchants find it
useful to receive
actionable data
insights.
Fave eCards
Simple and user- result in
friendly reports
make it easier for merchants
to quickly analyze their
business data and make
informed decisions.
2X
increased sales
Around 1 in 3
merchants are able
to correlate insights to
their marketing spend,
resulting in higher ROI
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122020 RETAIL TRENDS IN MALAYSIA
“We can see customer behavior, how
much they spend and what they spend on.
This actually helps us develop marketing
strategies for each individual store.”
- marketing head at a Malaysian coffee chain.
“Based on these insights,
we can target to a specific
demographic easily.”
- owner of an award-winning international diner
“The reports are very useful for us
to understand the effectiveness
of our cashback rebate.”
- marketing manager of a leading Japanese restaurant.
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132020 RETAIL TRENDS IN MALAYSIA
Industry Trends
Shaping The
Cashless Scene
In Malaysia
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142020 RETAIL TRENDS IN MALAYSIA
Food & Beverage (F&B)
While there is a trend of restaurants coming to
consumers through delivery or takeout, Malaysians still
crave being at a physical restaurant for two reasons:
convenience and socialization. Today, modern food and
beverage (F&B) merchants are using a combination of
digital merchant tools including smart cashback*
to increase transactions and drive revenue.
Cashless takes a Keeping ‘em
bite out of retail coming back
Credit and Return customers
contributed to
debit cards
remain the most 54%
popular cashless of sales for the year,
payment method for making customer
F&B outlets, followed loyalty a potential
by major e-wallets. revenue stream.
The kitchen rush Who spends more?
Women aged
Dinner
time 25-34
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delivered
drives the biggest
sales throughout 22%
the week. of sales in 2019.
*Smart cashback = A great way to get more customers during
non-peak hours. Merchants on FaveBiz are able to customize
their cashback at selected hours, days or weeks.
152020 RETAIL TRENDS IN MALAYSIA
Malaysian foodies
love these malls!
These five shopping malls in Malaysia drove the
most revenue at leading F&B outlets with
1. 1 Utama
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2. Queensbay Mall
3. Sunway Pyramid
4. Mid Valley Megamall
5. Gurney Plaza
162020 RETAIL TRENDS IN MALAYSIA
Most Malaysian
foodies are
hungry for ...
Cake
Buffet Dim Sum
Steamboat
are high on the Food for
average Malaysian thought
foodie list, being
the top keywords
searched on the
Fave platform.
63%
Female diners
drive higher
transactions within six
months compared to
male diners (37%).
Consider running a
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promotional campaign
geared towards a
specific demographic.
172020 RETAIL TRENDS IN MALAYSIA
Appetite for delicious,
guilt-free cuisine
From 2020 onwards, we believe there will be a
wave of organic (almost forgotten) ingredients
and techniques making a comeback to the
dining scene.
Poke bowls, salads and juices will pick up the
pace with healthy foodies. Keeping up with the
digital era, Malaysian consumers, especially
urban dwellers will become more savvy and
knowledgeable about food and its origin. A
recent survey by Food Industry Asia reveals that
locals are actively trying to improve their food
consumption habits, opting for healthier food
choices — a fact that F&B merchants are quick
to use to their advantage.
Hassle-free
& convenient
2.4X
increase
in cashless payments
Power-packed at health-food outlets
meals
Eating healthy
is more than
a habit; it’s a Health-
lifestyle. food haven
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Return customers
generated in Malaysia
Highest cashless
80%
of sales at
payments recorded at
health-food outlets in
Georgetown, Penang
health-food and Taman Tun Dr.
outlets. Ismail, Kuala Lumpur.
182020 RETAIL TRENDS IN MALAYSIA
Retail
Malaysians love to shop at the tap of their smartphones,
preferably from the comfort of their homes — and trendsetting
retailers are thinking ahead. Leveraging on e-commerce
campaigns such as Singles Day, 11.11 and 12.12, retailers are
taking the opportunity to showcase their best offers on the
largest online deal platform in Malaysia. The bottom line?
Cashless payments are dominating sales for retailers.
The best deals = Weekend peak
new customers Sundays,
77% 3-6pm
of total sales
are peak hours for
generated
Malaysian retailers,
by new customers,
driving the biggest
mostly by women aged
sales!
25-34
Spending power Highest-grossing
spikes up Home & Lifestyle
Average retail spend
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is RM465, and Sports &
an increase of
Travel are in the
65% top 5 highest-
compared to 2018. grossing retail
categories.
192020 RETAIL TRENDS IN MALAYSIA
Top 5
Highest Earning
Retail Categories
Mobile Electronics
10.0%
Sports & Travel
8% TV & Home
Appliances
56.9%
Home & Lifestyle
11.5%
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Fashion
13.6%
202020 RETAIL TRENDS IN MALAYSIA
Which mall
drove the
highest
revenue for
retail outlets?
Leading retail outlets
with FavePay earned
the most revenue at
these five shopping
malls in Malaysia.
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1. 1 Utama
2. Ipoh Parade
3. Queensbay Mall
4. Mid Valley Megamall
5. Sunway Pyramid
212020 RETAIL TRENDS IN MALAYSIA
Beauty & Wellness
Salons and spa treatments are highly sought after in Malaysia.
Today, beauty and wellness outlets are growing their bookings
by building customer loyalty and showcasing their best deals
on Malaysia’s largest deal platform. Public holidays such as
Chinese New Year and national events accelerate a huge
percentage of seasonal sales.
Who doesn’t love Lucrative
a good deal? services
91%
of beauty & wellness
Spa,
massage,
sales were generated hair and
through deals facial are the
showcased on Fave,
mostly by women aged top 4
highest-grossing
18-44 years.
beauty and wellness
services.
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New customers drove the
highest sales for beauty &
wellness outlets
New
customers
81%
Return
customers
19.0%
Weekend
primetime for Massage, Spa
beauty and
Facial Manicure
wellness
Saturday and Haircut
Sunday afternoons
drive the highest are among the
sales for beauty most searched
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and wellness keywords on Fave.
retailers where
massage, facial,
spa, manicure, and
haircut are among
the most searched
keywords on Fave.
232020 RETAIL TRENDS IN MALAYSIA
Health & Fitness
Fitness speak is the new norm as healthy guilt-free
meals continues its upward trend for urban dwellers.
The desire to lead an active lifestyle is shaping the
growing fitness scene in Malaysia with positive results:
fitness centers are coming up with flexible crossfit
membership plans and social spaces are being
converted into an exercise-friendly venue.
Burning the core Generation of
superwomen
September
saw the highest peak
for health- and fitness- 68%
of sales were
related deals especially on
contributed by
Mondays women aged
between 18-44
3-6PM. years.
Top selling Did you know?
fitness deals During the
2019 11.11 sale
30-day in Malaysia, among
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gym access the top five highest-
and zumba classes grossing FaveDeals
remain some of the was a comprehensive
most popular FaveDeals health screening
purchased by Malaysians. package.
242020 RETAIL TRENDS IN MALAYSIA
Activities & Services
From a 3-hour karaoke session to an extreme
adventure sport, Malaysians are spoilt for choice
when planning their weekend activities. The months
of January and December 2019 saw a spike in travel-
related FaveDeals especially to Banting, Port Dickson
and Cameron Highlands.
Driving growth Gearing up for
FaveDeals brought in the weekend
54%
repeat customers
contributing to
> Fridays
drive the highest
number
of activities
89% of sales. purchased.
Catching the waves Bestselling Engines get
Weekend getaway to children’s activity pampered
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Banting is the Indoor playgrounds like Motor enthusiasts
top-selling travel The Parenthood Playland were quick to snap up
FaveDeal drove admission ticket FaveDeals on lubricant,
including admission to sales with FaveDeals bringing in 4X new
the Gold Coast Morib especially during the customers in
Water Theme Park and school holidays. October.
activities for two people.
252020 RETAIL TRENDS IN MALAYSIA
Cashless has moved beyond a trend —
it is a way of life.
The latest Consumer Payment Attitudes Study by
Visa reveals that the preference for digital payments
is the highest in Southeast Asia. Malaysia ranks
among the highest in ownership of mobile apps.
More merchants are responding to this behavior by
increasing their digital acceptance footprint. Will you
be doing the same?
It is critical that your business keeps up in order to
gain sustainable growth for the future.
Now that you have explored trends shaping digital
payments in Malaysia and its impact on various
business categories, it is time to put those insights
into action. Invest in a leading digital merchant
platform that will help you drive sales, build
customer loyalty and increase efficiency.
The time to grow your business is now.
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262020 RETAIL TRENDS IN MALAYSIA
FaveBiz, the next-generation
digital merchant platform
Empowering offline merchants to achieve
sustainable growth in the digital age
Revenue-focused
• Cashback via Fave
Integrated platform
drives over 70%
• Used in over 30,000
repeat customers to
merchant locations across
merchants vs 20-
Singapore, Malaysia and
30% from industry
Indonesia.
loyalty solutions.
• Access to profit-boosting
services such as FavePay,
FaveDeals and more.
Seamless
experience
Average in-app
merchant rating
of 4.5 upon 5 • 86% of
stars by more merchants in
than 4 million Malaysia saved on
Fave users. payment terminal
costs by switching
to FavePay.
• For every
RM1 spent on
marketing via
Fave, merchants
gain an average
of RM9.30.
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It takes less than 3 minutes
to start accepting cashless payments.
Sign up for FaveBiz now.
Visit www.favebiz.com to learn more.
272020 RETAIL TRENDS IN MALAYSIA
Additional references
• Non-Cash Payments Volume, Capgemini
• Consumer Payment Attitudes Study 2019, Visa
• (October, 2019) Towards a cashless Malaysia, The Star
• (May, 2019), The Sun Daily
About the whitepaper
The 2020 Retail Trends in Malaysia whitepaper was compiled using Fave analytics and external
research to identify actionable insights for offline merchants to expand their business online, and
gain sustainable growth. All materials presented in this whitepaper, unless specifically indicated
otherwise, are under copyright and proprietary to Fave. To learn more, visit www.favebiz.com.
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