Hi.. I just found an interesting article from Telegram being sent by my friends. It is about how hard our consumer in 2017. It is better if I share it to all of my reader.
TOP FIVE CONSUMER TRENDS
1) Facing multiple financial issues, many consumers cut spending
Many Malaysian consumers were hit by what they considered a triple blow in 2015: a sluggish national economy; the implementation of the 6% Goods and Services Tax (GST) in April; and a weakening currency. The combination pushed up inflation rates, especially in the second half of 2015, forcing many household to tighten their belts in order to cope with the increasing cost of living. Many consumers have begun curbing their spending and cutting discretionary spending (including spending on holidays, dining out and entertainment), and many others have devoted their time to finding bargains to maximize their household spending.
A recent survey by recruitment website Jobstreet revealed that 24% of respondents said they had already faced problems with their expenses even before the GST was implemented in April 1, 2015. More than one-half also said they had reduced the number of times they go out for lunch with colleagues while 47% said they had started bringing food to work from home. Some said they now take public transport (13%) and car pool (10%) to reduce their commuting expenses. In other reports, consumers said when they are shopping for food they are switching to generic brands and value-for-money products to save money and shopping for essential goods at warehouse sales, expos and hypermarkets when goods such as cooking oil or baby milk powder are on sale.
In a recent article on website Malay Mail Online some consumers discussed how they are coping with their financial dilemmas. Taxi driver Mohd Zawawi Ahamad said he was working more hours while still cutting household expenses. “Zawawi said his food expenditure rose by 30%, while maintenance and spare parts prices for his taxi has jumped by 40%, with the cheapest tyre in the market costing him MYR140 now instead of MYR100”. He told the newspaper “If you ask anybody, what we can do is just compromise on so many things. People are adjusting like me, but the burden is still there”. Another consumer, a father of three said “We can’t run away from it. We just have to adjust, but the truth is we still suffer”. He added that his two older children were forced to take jobs to help the family afford to buy new clothing for younger siblings.
Of course, not all consumers are suffering to the same extent (if at all). Nevertheless, it appears that even more affluent households are looking for ways to cope. Business executive Kenneth Ch’ng told the Malay Mail “We have cut down on dining at the local restaurant, going to movies and switched to doing grocery at the local wet market but even with these measures we are experiencing an approximate 21% jump in total expenses. We feel that our standard of living has dropped”.
2) Tougher credit requirements place home ownership out of reach for many
Due to fears about the combination of increasing household indebtedness and the significant rise in property prices, the central bank has introduced measures to cool the property market by tightening credit requirements. This, in turn, has reduced the number of mortgage loans available to consumers. Some of these measures, including the maximum loan tenure of 35 years for mortgages and the removal of the Developer Interest Bearing Scheme—which saw the interest on mortgages of homes under construction borne by the developer—have made homes unaffordable for many and pushed many prospective home buyers, particularly first-time buyers, out of the market. According to research conducted by the Khazanah Research Institute in 2015, average house prices in Malaysia are now more than four times the median annual household income. In urban Kuala Lumpur and Penang house prices are 5.2 to 5.5 times the median annual household income, making buying a home “severely unaffordable”.
Despite these setbacks, most consumers still harbour the desire to be home owners and they are continually looking for alternatives to standard mortgages. Many are willing to take the risk of financing their new homes entirely on credit while others seek help from their parents to come up with the large down payments now required. Some have even dipped into their Employees Provident Fund savings to finance their homes. Still others are putting their preference for a new home aside and looking instead to the more affordable secondary home market or opting for government-operated affordable housing schemes.
Generally, exorbitant housing prices are squeezing household budgets and consumers are finding they must look very closely when considering household purchases. In addition, with fewer new home owners coming into the market, demand for a wide range of household goods and services has declined and will continue to decline until the housing crisis is resolved.
3) Consumers increasingly shopping online
In line with increased broadband penetration and the continual growth in the number of internet users, internet retail has experienced significant growth. Between 2009 and 2015 value sales per household of internet retailers increased by 82% (in 2015 prices) to reach MYR237 in 2014, including MYR22.5 per household attributed to mobile internet retailing.
For the most part, consumers are attracted to the convenience of shopping online as well as the lower prices. In addition, many shoppers find they can secure products online that are not stocked on the shelves of local brick-and-mortar stores. A survey by Google published in 2014 revealed that 43% of Malaysian internet users who had never shopped online said they planned to do so within the following 12 months.
The recent 11street Online Shopping Index examined internet retailing trends during Ramadan and revealed that Malaysian online shoppers are purchasing a wide range of products. Hoseok Kim, 11street chief executive officer said “Contradicting the popular belief that fashion and electronics are the most sought after categories, Malaysians shop in diverse categories including health & beauty, kids & baby, home & living, grocery, services such as e-vouchers and many more”. He added “Furthermore, the 11street Online Shopping Index uncovers that customers actually bought from either two or more product categories within a single transaction and it is expected to increase over the next few years“.
Internet retailing is projected to continue to increase in coming years, driven for the most part by growth in mobile online shopping. Between 2011 and 2014 value sales of m-commerce increased by 374% (in real terms). Between 2015 and 2018 values sales are projected to more than double, reaching MYR62.60 per household in 2018.
4) Holiday-makers increasingly opting for domestic destinations
The recent economic slowdown and weakening ringgit have not dampened consumers’ desire to go on holiday. However, vacation habits are changing as Malaysians look more closely at domestic destinations rather than overseas holiday destinations.
The trend was highlighted at the recent travel fair hosted by the Malaysian Association of Tour and Travel Agents (MTA) where exhibitors in two halls focused on domestic travel. MATTA CEO Phua Tai Neng told The Star “In 2014, 60.7 million Malaysians were domestic tourists, which was an 11.6% increase from 54.4 million in 2013, so we are definitely expecting at least a 5% increase this year.”
Tourism Malaysia director of domestic marketing Iskandar Mirza said that state travel organisations from Sabah, Sarawak, Langkawi, Johor, Negri Sembilan, Terengganu, Kedah, Kuala Lumpur, Labuan, Pahang and Putrajaya would exhibit at the fair. He added that “Tourism Malaysia would be launching a special package on Pahang this year, which would primarily focus on eco-tourism. ‘We realise that Malaysians these days prefer to travel with packages, as it helps them to save money,’ he said”.
Domestic travellers are also looking for value for their money. Many holiday-makers are expected to combine their holiday travel with ‘balik kampung’ trips during festival periods or travel to other states for their holidays in combination with occasions such as weddings in order to save on transport fees.
5) Consumers preparing more meals at home, cut spending on dining out
A growing number of consumers faced with increasingly squeezed household budgets are deciding to cut spending on dining out and they are preparing more meals at home. The trend has been facilitated by the wide availability of affordable fresh ingredients at local wet markets and supermarkets. Clearly, the exemption of basic food items and fresh produce from the new 6% Goods and Services Tax (GST) has made buying fresh ingredients to prepare meals at home an even more attractive option.
Many consumers who don’t want to eliminate dining out altogether are now visiting less expensive food service venues, such as neighbourhood Mamak and Indian-Muslim restaurants and hawker stalls. Indeed, meals at restaurants situated in shopping malls usually cost between MYR25 to MYR50, not including a drink. In contrast, meals at common Mamak stalls and hawker centres usually cost around MYR10 with a drink. A recent report in the Malaysian Chinese News noted “As people cut down on dining in restaurants, they opt to visit food court instead. Hawkers [have benefited] after implementation of GST”. Malaysian Hawkers Association national president Datuk Lee
Teong Chwee confirmed the trend, adding that recent crowds in night markets and food courts are now larger than they were prior to the implementation of GST.
– This article is about my country but I think some of you also affect on global economy crisis. Just share if you have any experience facing the same problemn