Malaysia is the 28th most confident country in the world.

chart2 consumerconfidence thumb
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(marketingmagazine.com.my) – The Malaysian consumer confidence trends upward in the second quarter of 2016 with 87 percentage points (pp) (increase of 8 pp from last quarter), after a steady downward drift since end of 2014, according to the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions released today by Nielsen, a global performance management company. (See Chart 1).

Chart 1: Nielsen Consumer Confidence Index – Malaysia vs. Global (2010 – Q2 2016) [%]
chart1 consumerconfidenceSource: Nielsen Global Survey of Consumer Confidence & Spending Intentions, Q2 2016

Consumers in Southeast Asia continue to remain confident with four out of six countries in the region scoring above the 100 pp mark. The Philippines (132 pp, +13 pp from last quarter), Indonesia (119 pp, +2) and Vietnam (107 pp, -2) dominates the list of top 10 most confident countries globally while Thailand (101 pp, -4) settled for the twelfth place.

Singapore’s consumer confidence level remain unchanged as per previous quarter (88 pp) and is ranked 25th while Malaysia jumped eight spots to be the 28th most confident country globally (36th in previous quarter). The average global consumer confidence is 98 pp (unchanged from previous quarter). (See Chart 2).

Chart 2: Nielsen Consumer Confidence Index, Southeast Asia vs. Global (Q3 2015 – Q2 2016) [%]

chart2 consumerconfidence

Source: Nielsen Global Survey of Consumer Confidence & Spending Intentions, Q2 2016

“Malaysia has weathered the currency devaluation and moved past the first year of the implementation of the goods and services tax (GST) without the economy going into any significant downturn. Thus, the nation’s consumer confidence outlook is returning, with more Malaysians believing that the economy is more resilient than a year ago,” said Richard Hall, Country Manager for Nielsen Malaysia.

The Nielsen Global Survey of Consumer Confidence and Spending Intentions, measures consumer confidence, perceptions of local job prospects, major concerns and spending intentions amongst more than 30,000 respondents with Internet access in 63 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. Within a country, period-to-period movements of seven points or more are considered statistically significant.

MALAYSIANS FEELS OPTIMISTIC ABOUT LOCAL JOB PROSPECTS AND PERSONAL FINANCES

Whilst the economy (45%) and job security (25%) remain the top two key concerns among Malaysian consumers, more than one third of Malaysian consumers are also feeling positive about the local job prospects over the next 12 months (36% vs. 27% in prior quarter). Nearly half also feel the same about their state of personal finances in the coming year (48% vs. 40%) despite sluggish economic environments.

“A year after the implementation of the GST, consumers have recovered spending in most essential food and non-food categories. Additionally, the Malaysia Government’s recent measures to reduce the mandatory 11% contribution in the retirement Employee Provident Fund (EPF) by 3% combined with a minimum-wage increase should contribute to more consumer spending power,” notes Hall.

The survey results also highlight other major concerns among Malaysians which include work/life balance (16%), debt (16%) and political stability (16%). (See Chart 3).

Chart 3: Top 10 major concerns among Malaysian consumers (Q2 2016 vs. Q1 2016) [%]

chart3 Top10majorconcerns

Source: Nielsen Global Survey of Consumer Confidence & Spending Intentions, Q2 2016

SOUTHEAST ASIAN CONSUMERS LEAD GLOBALLY WHEN IT COMES TO SAVING INTENTIONS

Southeast Asian consumers continue to lead globally when it comes to saving intentions. Consumers in Vietnam are the world’s most avid savers (76%) followed by Indonesia (70%, 3rd), Philippines (65%, 6th), Malaysia and Singapore (63%, 8th, respectively) and Thailand (62%, 10th).

The global average of consumers depositing spare cash into savings is 52% (up 1% from last quarter).

Besides prioritizing saving intentions, about one quarter of Malaysian consumers have also said that they would divert any spare cash towards investment of stocks/mutual funds (29% vs. 32% in last quarter) and retirement fund (21% vs. 27% in prior quarter) while about two in five intend to pay off debts, credit cards or loans (39% vs. 41% in Q1 2016). (See Chart 4).

Chart 4: Top 10 areas where Malaysian consumers are spending their spare cash (Q3 2015 – Q2 2016) [%]

chart4 top10areaswheremalaysia

Source: Nielsen Global Survey of Consumer Confidence & Spending Intentions, Q2 2016

Malaysian consumers are also not shy about spending on holidays/vacation (38%, down 2% from last quarter) and new clothes (26%, up 1% from previous quarter) despite a strong affinity towards saving any spare cash after covering essential living expenses.

Other areas of expenses include out-of-home entertainment (18%), new technology products (18%) and home improvements/decorating (17%).

The survey also revealed that consumers in Malaysia would continue to reduce household spending even when economic conditions would improve with over four in five Malaysians changing their spending habits in the past 12 months to improve household saving (87%). Over half of the respondents have reduced spending on new clothes (58%), switched to cheaper grocery brands (54%) and cut out out-of-home entertainment (52%) in a bid to save household expenses as compared to last year. However, should economic conditions do improve, about one third of Malaysians would continue to try to save on gas and electricity (36%), spend less on new clothes (31%) and minimize out-of-home entertainment (28%). (See Chart 5).

Chart 5: Top 10 actions Malaysian consumers have taken to improve household savings in the past 12 months (Q2 2016 vs. Q1 2016) [%]

chart5 top10actionsmalaysian

Source: Nielsen Global Survey of Consumer Confidence & Spending Intentions, Q2 2016

THE FMCG SECTOR CONTINUES TO PROSPER IN Q2 2016

Consumer purchasing power continues to climb in the Fast Moving Consumer Goods (FMCG) category in Q2 2016 compared to the same quarter in the prior year (8.1%). All FMCG super categories registered positive trend with Household (10.5%) in the lead followed by Beverage (9.3%), Groc
ery (9.3%), Personal Care (6.2%), Health & Wellness (3.0%) and Snack & Confectionary (2.8%).

“Post the implementation of GST, we saw FMCG sales decline in April 2015 with a slow build in positive sales over the following months with the end of 2015 producing a more positive picture for retailers and manufacturers after a bumpy year,” observes Hall.

“2016 started strongly with a positive Chinese New Year period impact but slower growth was registered in February and March, which unsurprising given the pre-GST stocking from the previous year. April proved to be a positive month as expected given this period a year ago is when we saw the short term impact of the pre-GST stocking and GST overall impact on consumer spending. Overall, if you take out the short term highs and lows caused by the GST implementation, we can see that the FMCG arena is looking slightly more positive than two years ago.”

While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration has not reached majority potential, audiences may be younger and more affluent than the general population of the nation. Additionally, survey responses are based on claimed behaviour, rather than actual metered data.


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