The eCommerce market in Malaysia and Singapore presents unique challenges and opportunities, shaped by specific consumer behaviors and market trends. This white paper explores these aspects, highlighting strategies for eCommerce brands to enhance customer experience (CX) and capitalize on the growing demand.
Market Overview and Consumer Behavior
Singapore and Malaysia are distinguished as leading mature e-commerce markets in Southeast Asia, characterized by high internet and smartphone penetration, affluent and tech-savvy consumer bases, sophisticated logistics and payment infrastructure, and supportive government policies. The e-commerce sector in Singapore is projected to grow at a Compound Annual Growth Rate (CAGR) of 11% over the next five years, while Malaysia's market is expected to experience a 14.32% growth rate during the same period.
Four similar trends have been observed across both markets:
- 1. Increasing Purchasing Power of Younger Generations
There is a noticeable shift towards online shopping, driven by rising incomes among Generation Z and Millennials. This demographic, which is expected to comprise 75% of ASEAN consumers, spends seven to eight hours daily on the internet across various devices, dedicating four to five hours to social media activities. (Source: World Economic Forum)
- 2. Preference for Sustainable and Eco-friendly Purchases:
Consumers in both Singapore and Malaysia are increasingly making purpose-driven purchases, with a significant number expressing willingness to pay more for sustainable and eco-friendly options. Specifically, 90% of Singaporeans and 60% of Malaysians have indicated a preference for such products, highlighting a shift towards more environmentally conscious buying decisions. (Source: Singapore Business Review and Statista 2023)
-
- 3. Value-Driven Spending
There is a growing trend of conscious spending, with consumers seeking greater value in their purchases. Four out of ten Singaporeans and Malaysians reported a decrease in their spending from 2022 to 2023.
Singaporean shoppers are dedicating more time to finding the best deals online (42%) and in stores (48%), while 40% postpone purchases until major sale events like the Great Singapore Sale and Singles’ Day to capitalize on discounts.
Similarly, 54% of Malaysian shoppers are seeking the best online deals, and 44% in stores, with 37% awaiting sales events like Ramadan sales and Singles’ Day for additional discounts. (Source: Adyen Retail Report 2023)
- 3. Value-Driven Spending
- 4. Health and Wellness Spending
Despite tighter budgets, there is a willingness among consumers to allocate more for health and wellness.
Recent findings indicate that 79% of Malaysian respondents have become more health-conscious as a result of the pandemic, with 75% ready to increase their spending on health and wellness products. Similarly, 69% of Malaysian respondents reported an increased focus on health, with 77% willing to spend more in this area. (Source: Asia-Pacific Health Priority Survey 2023)
These trends reflect evolving consumer preferences and spending habits in Singapore and Malaysia, signaling opportunities and challenges for businesses operating within these dynamic e-commerce markets.
But how will brands decode these consumer preferences for strategic outreach?
Download the full report here.
