COVID-19 has seen the emergence of a cashless, cautious and more conscientious consumer, according to Standard Chartered’s latest global survey. Almost two-thirds (73%) of Malaysian survey respondents agree that COVID-19 has made them more positive about online shopping, but they are also more careful with their spending and want new ways to track their money digitally.
The study of 12,000 adults across 12 markets – Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US – 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. In Malaysia prior to the pandemic, only 30% said they preferred shopping online compared to 70% who preferred shopping in-person. But this has shifted significantly with 51% now preferring online payments to 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% of people in Malaysia now expect the country to go fully cashless, with a majority expecting this to happen by 2030.
Meanwhile, as spending begins to creep up as lockdowns ease globally – 57% of Malaysians reported increased spending in July – 82% of people in Malaysia say the pandemic has made them more careful with their expenditure. Reflecting this increased caution, 68% of survey respondents in Malaysia said that the economic impact of COVID-19 has made them more likely to track their spending, with over 80% 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 now spending more on basics – such as groceries and healthcare – and digital devices than they did prior to the pandemic, and they expect this increase to continue in the future. Meanwhile, in Malaysia 65% of respondents say they have spent less on travel and holidays than they did before the pandemic, while 33% have spent less on experiences and 62% have spent less on clothes. This trend is also expected to continue with 48% saying they anticipate spending less on travel/holidays, 23% on experiences and 41% on clothes 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%), more sustainably (54%) and with small businesses (52%). This is particularly true of younger generations (18-44), suggesting this trend is likely to continue.
Abrar A Anwar, Managing Director and Chief Executive Officer of Standard Chartered Malaysia, said: “The pandemic has accelerated digital adoption among the Malaysian consumers who have now found themselves more comfortable with online transactions, from shopping to investing. Our own ATM withdrawal data supports this shift with ATM usage declining to half the levels they were two years ago, with COVID19 dramatically accelerating the decline. “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 your payments digital. It’s imperative that banks continue to innovate digitally so that clients can conveniently and securely transact, track and manage their spending.”