The COVID-19 pandemic has seen the emergence of cashless, cautious and more conscientious consumers, according to the latest global survey by a British multinational banking and financial services company.
The firm found that 73 per cent of Malaysian survey respondents agree that the pandemic has made them more positive about online shopping, but they were also more careful with their spending and wanted new ways to track their money digitally.
The study involved 12,000 adults across 12 markets – Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, United Arab Emirates, the United Kingdom and the United States. It is the second in a three-part series, looking at how Covid-19 has transformed consumers’ way of life, and what changes could be here to stay.
While the first survey focused on the pandemic’s impact on earnings, the second offers new insights into the way the global health crisis is changing consumer spending habits. Respondents in all 12 markets anticipate doing more of their shopping online from now on.
Before the pandemic, only 30 per cent of Malaysians said that they preferred shopping online compared to 70 per cent who preferred shopping in-person. However, this has shifted significantly with 51 per cent now preferring online payments to the in-person card or cash payments. This increase in preference for online payments is true across a range of purchases, from groceries and travel to digital devices.
As a result, 79 per cent of people in Malaysia now expect the country to go fully cashless, with a majority expecting this to happen by 2030, the report noted. Meanwhile, as spending increases as lockdowns eases globally – 57 per cent of Malaysians reported increased spending in July, while 82 per cent of people in Malaysia say the pandemic has made them more careful with their expenditure.
Reflecting this increased caution, 68 per cent of the survey respondents in Malaysia said the economic impact of Covid-19 has made them more likely to track their spending, with over 80 per cent either using or interested in using budgeting tools or tools that block card-spend over specified limits.
Consumers around the world, including in Malaysia, are also now spending more on basics – such as groceries and healthcare – and digital devices than they did before the pandemic, and they expect this increase to continue in the future.
As well as increased caution when it comes to spending, consumers around the world are increasingly conscientious. This is good news for small businesses and those producing locally made goods, particularly those making and selling sustainably sourced products.
In Malaysia, more than half of people say they are now more likely to shop locally (64 per cent), more sustainably (54 per cent) and with small businesses (52 per cent). This is particularly true of younger generations (18-44), suggesting this trend is likely to continue.
The Managing Director and Chief Executive Officer of the firm’s Malaysian branch stated that the pandemic had accelerated digital adoption among the Malaysian consumers who have now found themselves more comfortable with online transactions, from shopping to investing.
The firm’s own data ATM withdrawal data supports this shift with ATM usage declining to half the levels they were two years ago, with Covid-19 dramatically accelerating the decline. He added that in a world where people are being more cautious with their spending, being able to keep track of where your money goes is very important.
One way to do that is to keep payments digital. Banks must continue to innovate digitally so that clients can conveniently and securely transact, track and manage their spending.
