Malaysia’s top 100: Millennial purchasing dominates as nation continues to reel

Malaysia has had a particular arduous year. Its Covid situation worsened in 2021 as record-high infections and deaths ravaged the country, and political instability continued to cause havoc leading to unelected prime minister Muhyiddin Yassin being pushed to resign.

In these testing times, a culture of self-starters, resilience, and convenience emerged. And this has led to purchasing patterns and brand sentiment indicated in Malaysia’s top 100 brands, as part of Campaign's Asia’s Top 1000 research.

For starters, messaging app Telegram recorded the highest spike of all brands (by 84 spots) to debut in the top 100 this year.

Darren Yuen, CEO of Initiative & BPN Malaysia, said that the rise of Telegram can be linked to WhatsApp’s new privacy policy that no longer allowed users to opt out of sharing their data with Facebook, prompting many to seek alternative platforms.

“Telegram was one of the preferred alternatives due to its high privacy settings. [Its rise] shows that users have a strong voice when it comes to the security of data when using these platforms,” he said.

Cindy Quek, head of strategy at Grey Malaysia, said that the popularity of the platform also comes from it having more features than WhatsApp and Facebook, which has led to more people using it. On top of that, celebrities such as Siti Nurhaliza and Neelofa—who share millions of followers between them—began to use Telegram to share updates and send greeting to their fans. Small businesses have also turned to the app to hawk their products, a phenomenon that has taken flight as pandemic-related layoffs and cuts have resulted in many Malaysians starting independent businesses.

Telegram has also begun to come in handy for government agencies to disseminate state announcements, such as the Crisis Preparedness and Response Centre under the Ministry of Health which set up an official group for public updates on Covid.

The inevitability of Shopee and Lazada

Pharmacy chains Watsons and Guardian slipped by 19 and 7 spots respectively, a surprising result given that Malaysia was battling record-high Covid cases throughout most of 2021. Yuen attributes this to the proliferation of Shopee and Lazada which were the top two destination points for Malaysian shoppers this year, owing to a significant push of CPAS ads from retailers.

Quek said that because Malaysia underwent multiple periods of lockdowns, most people chose to adhere to the Standard Operating Procedures (SOPs) by not stepping out of their homes.

“We started ordering [self-care products] on ecommerce platforms like Shopee and Lazada. And Malaysians are generally bargain-hunters, so the most affordable e-stores usually get the highest sales, which would bump up their rankings and placement in the app,” she said.

This would also explain why hygiene products such as the P&G-owned Dynamo and Unilever-owned Breeze performed especially well this year. Quek said these brands tend to run promotions on their official e-stores on Shopee and Lazada with prices usually being slightly below market price.

It’s not a coincidence that SK-II, which rose a whopping 70 spots this year, launched its first-ever online flagship store in Southeast Asia on Lazada’s LazMall, which includes personalised beauty services and exclusive gift bags. One could even say that the perks of buying an SK-II product on LazMall supercedes those of buying it at a brick-and-mortar store.

“SK-II in Malaysia runs similar campaigns as their global ads,” said Yuen. “In the recent years, they’ve become closer to consumers with their engagement with James Corden, Naomi Watanabe, John Legend and Tang Wei.”

Plus, the brand’s Olympics campaign tapped into the anime craze among young adults in Malaysia. Yuen added that the use of Japanese actress Haruka Ayase in their always-on ATL campaign also helped.

Quenching the thirst for convenience

In the drinks category, Milo rose by seven spots while Nescafe and Dutch Lady slipped by 23 and 32 spots respectively. Yuen said that the growing up milk (GUM) category of drinks has seen significant declines in 2021, and being the market leader in the category, Dutch Lady suffered the most.

“This is due to affordability during these times which has seen sales and margins decline significantly from people reducing frequency to not purchasing at all,” he said.

Nescafe, meanwhile, likely took a hit due to a rise in artisanal or craft coffee products and cafés which has driven young coffee-drinkers to upscale their consumption to more premium brands. Brands such as Nespresso have milked this trend with coffee pods marking double-digit growth in the past year, according to Yuen.

“On the instant mixes, there has been intense competition from cheaper alternatives and also introduction of new players like Frenche Roast with a lot of brands showcasing their variety of range in their communications,” he said.

Malaysians were also evidently enamoured by the appeal of the drive-thru during lockdowns, which well-performing brands Starbucks and McDonald’s actively pushed in their marketing this year. KFC and Pizza Hut, meanwhile, which slipped in rankings this year, do not shout from the rooftops about their drive-thru outlets and prefer to bank on delivery and self-collection.

Quek said: “The drive-thru, in particular, makes it easy and practical to order during a lockdown and at a time when people may still be reluctant to dine out. The perception that [Starbucks and McDonald’s] have better and more efficient service than the competition also helps in these challenging times.”