Although most countries have slowly started reopening their economy, consumers are still wary about spending as they continue to feel the financial impact of the Covid-19 crisis.
A McKinsey survey tracking consumer sentiment has revealed a decline in spending intent across two-thirds of the 42 countries observed.
Malaysia Retail Chain Association (MRCA) president Datuk Garry Chua said people are more cautious about their spending now and will only spend if it’s a value buy.
Drawing on the example of the success of 11.11 online sales, he said retailers need to ramp up their campaigns and offer huge discounts to attract consumers.
He added that people are moving towards online shopping now because of the movement restrictions, but businesses cannot replace brick-and-mortar sales with online sales as consumers tend to spend more at physical stores.
“The pandemic has led to people becoming more health-conscious and spending more on wellness products that can protect their immune system. Meanwhile, they become more wary about going to public spaces like shopping malls,” he explained.
Federation of Malaysian Consumers Associations (Fomca) president Datuk Paul Selvaraj concurred that more people are becoming open to getting daily essentials online now.
“People’s priority right now is getting access to the essentials at cheap prices, and are even trying things that are new to them due to limitations in choices,” he said.
The Covid-19 crisis is also a wake-up call for many who did not have a financial plan or manage their spending well. As many face financial disruptions and job security issues, people need to step up on their financial plans.
“Although people are very cautious about their spending now, they need to learn from the crisis and set up emergency funds and manage our debt well,” he said.
Dropee chief operating officer Aizat Rahim said more consumers are becoming more confident with online shopping as the pandemic has forced consumers to turn to online platforms for their essential needs.
“We have witnessed more than 100% growth on our platform month-to-month since the movement control order (MCO) started on March 18. We believe that this growth will be sustained even after MCO ends as people become more comfortable with online shopping. Consumer interests will also extend beyond daily needs to education, lifestyle and so forth,” he said. – May 22, 2020