Malaysia’s economy is estimated to grow at 4.8% in 2020, marginally lifted from 4.7% in 2019. Unemployment rate will remain at 3.3% and inflation is estimated to be 2%, according to Ministry of Finance.
While 2020 economy seems to be holding up to expected uncertainties, the latest Consumer Sentiment Index (Q3 2019) from Malaysia Institute of Economy Research (MIER) saw the lowest index of 84 since Q4 2017. So how will this reflected in consumer behaviour and what their spending sentiments will be like in 2020?
It is vital for marketers to be able to understand these shifts in consumer sentiments, if they are to find new ways to build relationships with their consumers, while changing the way they think about their own categories.
It was twenty years ago that the term challenger brand was first coined, but the narrative around challenger thinking is undergoing a transformation, with new wave of challengers changing the way categories around us behave and operate.
In a bid to help advertisers and marketers who are looking to challenge the conventions and to better plan for their brands, PHD Malaysia, partnering with Vase.ai, has interviewed over 1000 Malaysia consumers and found some interesting insights for marketers.
At the outset, 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. 51% of consumers are hopeful that 2020 will be better than 2019, while 29% are expecting a status quo.
While consumers are relatively positive towards next year’s economy, the optimism does not translate into their personal finances. 57% of the consumers expressed some reservation towards their personal finances (either no improvement or manageable). They are likely to bring forward their cautionary spending into 2020.
The research also validates a common spending trait during the economy uncertainty, i.e.consumers will continue to spend on food, household products and children expenses, but defer spending on discretionary products like luxury goods, overseas holidays and leisure outings.
What does this all mean for brands that are trying to challenge the status quo?
• Given the cautious spending outlook in 2020, it becomes even more important for marketers to drive the full funnel experience. In this approach, it is critical to drive top of mind awareness and position the brand distinctively in the mind of the consumers.
• As consumers seek more value for money, they will be drawn to promotions & deals, especially across ecommerce & e-wallet platforms. Marketers need to have solutions across these platforms to drive high value.
• While doing so, marketers can leverage on the platforms’ digital advantage and optimise data technology to bridge the consumer journey from awareness to conversion.
PHD has been partnering with clients to drive full funnel experience by applying the five fundamental principles of challenger thinking, which was identified in its latest thought-leadership publication, Overthrow II:
1) Effectiveness over efficiency
2) Attitude over audience
3) Creativity over relevance
4) Personalized product / service over personalized advertising
5) Share of distinctiveness over share of voice
To understand how to apply these principles and how brands can adopt a new wave of challenger thinking, please contact Eileen Ooi at [email protected] or Kiron Kesav at [email protected]
This article originally appeared:https://marketingmagazine.com.my/positive-economy-outlook-but-cautionary-consumer-spending-remains-in-2020/