By Lincoln Yap
Long perceived as Malaysia’s ‘engine for economic growth’, the middle class or the M40 economic segment of the Malaysian population has seen its fair share of dwindling opportunities – post pandemic.
In a startling revelation, Dato Dr Rais Hussein who is CEO of Emir Research observes, “More than half from M40 has dropped to B40 post pandemic, and still dropping.
We are still crunching the numbers from multi government official sources. We feel, from what we have now is B60, M20, T20 could be the new hierarchy. We are still working on these numbers in the coming months to get a clearer picture.”
The middle class in Malaysia, M40 or Middle 40% group, as based on the Household Income and Basic Amenities Survey 2019, earn between RM4,851 to RM10,970 per month. The M40 group covered 37.2% of the total household income in 2019.
There has been much talk about the collapse of Malaysia’s middle class in recent months.
With the Malaysian economy facing high employment, shrinking incomes and inflationary pressures, for businesses that thrive on middle class consumption – from the leisure, F&B and automobile industries to private schools, universities and insurance companies – challenges abound.
Even with government initiatives launched in recent months.
Shrinking incomes usually translate to less consumption and lower spending power. Marked differences are seen in reports from the Department of Statistics Malaysia between the B40 and M40 segments.
While the B40 segment tends to focus on utilitarian spending, the M40 segment have greater structural living costs – again, from leisure to almost everything else, including loans, be these for housing, automobiles, business operations, education or personal finances.
The middle income consumers drive the economy anywhere in the world.
So where does this leave the marketing industry? How will lower consumption impact the industry? Is the importance of Malaysia’s middle class to the marketing industry waning?
Hardly, as members of the marketing fraternity opine.
As mass consumers, the M40 segment can be considered ‘critical’ and remains ‘a top priority for marketers, especially Consumer Packaged Goods (CPC) brands’.
“Marketers are addressing this segment through better productization, (and) options of range of products that cater across the segments B40 to M40,” points out Eileen Ooi, CEO of Omnicom Media Group (OMG).
“In my view, the range of options in products and marketing options for the M40 remains abundant, in fact giving power to the consumers,’ says Eileen, who is also President of the Malaysian Digital Association (MDA).
Another interesting point Eileen raised was that the marketing fraternity could play a role as responsible marketers in data management, advertising policies and providing safer spaces for consumers. This, given the upsurge in scam efforts globally, is a fundamental shift that all marketers, agencies, tech providers and media publishers need to jointly drive.
In a similar train of thought, Darren Yuen, CEO of Initiative Malaysia, adds that the M40 group is ‘vital in creating consumer based demand’ and that they are also seen as a catalyst to ‘stimulate innovation and new growth areas’ given that this segment is also ‘aspirational’ to the B40 segment.
As the group most willing to take chances to ‘start, thrive and flourish businesses’, the marketing fraternity can encourage the M40s by showcasing their works/innovations across multiple forums Darren told MARKETING magazine Malaysia.
He added that this could be in the form of mentorship programmes from established marketers – such as Elevate – a business leadership bootcamp initiative of Mediabrands, over the last two years, to help this group ‘build their enterprises competitively on a global scale’.
Given these various factors, the M40 segment, seen as not just an ‘engine’ but increasingly as a stimulant to economic growth, seemingly remains as important as it has been to the marketing industry then, now and in the future.
The opportunities are there obviously, to the marketing fraternity, to widen its horizons, and reach, to a consumer market that won’t lie down and die nor fade away.
MARKETING Magazine is awaiting further comments from Mindshare and will update this piece accordingly. As this discussion continues….
MARKETING Magazine is not responsible for the content of external sites.