Seamless commerce a necessity for Malaysia’s retailers

PETALING JAYA, 18 June 2024 – The retail and commerce landscape is rapidly evolving, with seamless online-offline experience now a fundamental requirement for retailers, and Malaysia is no exception. In a study commissioned by KPMG and GS1, 49 percent of respondents from Malaysia said they are comfortable with both online and physical store shopping, and 27 percent expressed a preference for in-store shopping. 

Ngu Heng Sing, Partner and Head of Consumer and Retail sector at KPMG in Malaysia, commented, “The retail landscape is undergoing a transformative shift. In Malaysia, we're seeing a convergence of traditional and digital shopping preferences, particularly among Gen-Z consumers. Retailers must prioritize seamless commerce to cater to these evolving needs, ensuring a cohesive shopping experience across all channels.”

Published in a report entitled “Navigating the future of seamless commerce in Asia-Pacific”, the study encompasses 7,000 respondents from 14 markets in the Asia Pacific region including Malaysia. It revealed the preference for variety over price among Gen-Z consumers, who along with Baby Boomers, also value faster and more reliable delivery over promotions, discounts, and competitive pricing. This shift emphasizes the need for retailers to enhance their logistical capabilities to meet delivery expectations. 

Mobile banking app is the preferred online payment method among Malaysian consumers, with security and fraud risks being the most important factor in choosing a payment method. Also worth noting is that Malaysia recorded the second-highest dissatisfaction rate at 27 percent with generative AI-driven product recommendations, almost at par with Singapore’s 28 percent.

The survey also indicated that Malaysian consumers prioritize e-commerce platforms that offer competitive pricing, a wide variety of products, promotions, and discounts, as well as fast and reliable delivery and secure payment options. Across the region, Malaysia recorded the second lowest adoption rate for subscription which can include digitally delivered services such as media or entertainment as well as FMCG products. Only 26 percent currently subscribe to a product supply while 50 percent have never subscribed, which implies the need for companies to think outside the box when developing their customer loyalty programs. 

Overall, Malaysian consumers embrace sustainable products, with 93 percent actively seeking them out. However, 44 percent of Malaysians expect sustainable options to be priced competitively with other options, with only 32 percent prepared to pay a premium. 

The report also highlighted the gradual traction gained by the Buy Now, Pay Later (BNPL) services across the region. Malaysians were found to have a generally high awareness of BNPL services, with just 10 percent unaware of them and about 28 percent of respondents across all age groups having used BNPL services in the past year, with the highest usage in the 25 to 34 age group (38 percent).

“The recent emergence of BNPL is transforming the digital payment landscape by offering instalments for a wide range of transactions, including low-ticket items. This bodes well for the underbanked population. However, there may be disruptions to the growth trajectory of BNPL, given the recent push for higher regulatory oversight and intervention,” Ngu observed.

He concluded, “In an era defined by consumers’ increased price sensitivity and digital fluency, the need for brands and retailers to adopt seamless integration, technological innovation, and personalized engagement cannot be understated. By embracing these principles, they can cultivate enduring connections and deliver transformative experiences that redefine the future of commerce.” 

The full report can be downloaded from kpmg.com.my/consumer 

For media-related queries, please email marcom@kpmg.com.my