KUALA LUMPUR, July 31 — Malaysian consumers have emerged as some of the most discerning shoppers in the world, with high expectations for personalized shopping experiences from their favorite retailers, according to The Adyen Malaysia Retail Report 2023. The report reveals that 55% of shoppers in Malaysia are likely to abandon their purchases if their preferred payment method is not available, highlighting the importance of offering flexible payment options.
Loyalty rewards also play a significant role in consumer satisfaction, with 68% of Malaysian shoppers feeling that existing loyalty programs offered by retailers are lackluster. Moreover, 83% of consumers hope for better rewards programs to enhance their continued loyalty. Retailers in Malaysia are grappling with these expectations, as nearly half (49%) find it challenging to maintain customer loyalty in the current business landscape.
Furthermore, a majority of retailers (53%) struggle to provide personalized services, citing difficulties in categorizing customers based on their needs and preferences. To compile the report, Adyen commissioned Opinium LLP to survey 36,000 consumers and Censuswide to survey 12,000 businesses globally, including 1,000 consumers and 505 businesses in Malaysia. Consumer behavior is shifting towards omnichannel payments, with Malaysian consumers valuing the ability to seamlessly transition between in-store and online shopping.
Among the surveyed markets, 66% of Malaysian consumers expressed greater loyalty towards retailers that offer the flexibility to initiate purchases in-store and complete them online. Additionally, 70% prefer retailers that allow online purchases with the convenience of in-store returns. Malaysian consumers also embrace technology-driven conveniences such as mobile point-of-sale (POS) systems and self-checkout kiosks, with 44% stating that these technologies enhance their shopping experiences.
Among the technologies mentioned, mobile apps are favored by 56% of consumers, followed by omnichannel shopping (40%) and self-checkouts (39%). In terms of payment methods, cash remains the dominant choice for in-store purchases (79%), followed by debit or credit cards (66%). However, there is a growing inclination towards alternative payment methods, including digital wallets (32%) and QR codes (24%). For online purchases, customers prefer to use debit or credit cards (62%), followed by digital wallets (47%) and QR codes (20%).
Given the diverse preferences of Malaysian consumers, the retail industry is primed for unified commerce, which involves syncing backend systems and customer-facing channels on a single platform. Despite only 12% of Malaysian merchants having invested in unified commerce thus far, the survey indicates a growing trend, with 35% having started investing in it within the past year and 46% considering doing so. Additionally, 49% of merchants plan to invest in connecting backend systems with customer-facing channels, representing an 88% increase from 2022.
Soon Yean Lee, Country Manager, Malaysia at Adyen, expressed optimism about the adaptability of the Malaysian retail industry in meeting evolving consumer patterns and leveraging technology as a growth driver. The findings of the report offer opportunities for local businesses to provide more personalized services that meet the demands of Malaysian shoppers. Despite concerns over inflation and rising costs of living, Malaysian retailers remain optimistic about growth, with 90% anticipating revenue growth in 2023 compared to the previous year. Additionally, 40% of retailers expect at least a twofold increase in business revenue.
To expand their reach, Malaysian retailers are eyeing international markets, with a particular interest in neighboring countries such as Singapore (50%), Indonesia (47%), and Thailand (41%). There is also interest in mature and emerging markets in the Asia-Pacific region, including Australia (29%), Japan (27%), and China (25%). While investing in digital channels, retailers acknowledge the brand value of physical stores, with 81% believing that stores will evolve to offer more experiential elements to engage consumers.
This sentiment aligns with consumer preferences, as 56% of Malaysian shoppers are more inclined to shop in-person if retailers provide interesting experiences at their physical stores. Cybercrime incidents and online fraud have raised concerns among Malaysian consumers, with 84% perceiving the risk of fraud as making online shopping less attractive. In 2022, nearly 30% of Malaysian consumers fell victim to online fraud, incurring an average loss of RM673 (approximately USD144). While 69% of Malaysian retailers express confidence in their fraud prevention systems, 36% reported losses due to fraud or chargebacks in the past year. Additionally, 30% experienced cyber attacks and data leaks.
The Adyen Malaysia Retail Report 2023 sheds light on the evolving expectations of Malaysian consumers and the challenges faced by retailers in meeting those expectations. By embracing flexible payment options, enhancing loyalty programs, and investing in unified commerce, retailers can create personalized shopping experiences that cater to the discerning Malaysian market, ultimately driving growth and customer satisfaction in the retail industry.