Welcome to Malaysians on Malaysia: Our quarterly report on the Malaysian Consumer Confidence Index (MYCI). In our ongoing endeavour to offer insights into Malaysia’s evolving market landscape, this edition continues to delve deep into the latest consumer trends and the influencing factors, providing a fresh perspective for you. Join us as we unravel the driving forces behind this chapter’s momentum and its potential implications.
In Q3’2024, the MYCI and all of its components displayed exceptional growth, marking a breakthrough in the nation’s collective sentiments. Innovative technologies are gaining momentum through manifestations from relevant parties towards the digitalised prospect, such as the surge in crypto owners and digital bank users. For a better grasp before diving into this chapter, we recommend reviewing Q2’2024 MOM.
MYCI Soaring to New Heights
A new record for the MYCI has been set, reaching an impressive score of 155 points. This milestone is particularly significant as it is the first time since 2018 that the index has achieved over the 150 points threshold. This figure not only represents the highest MYCI score in history but also stands as the culmination of Q3. The increase in points signifies a growing optimism among the people, indicating positive trends in market sentiments and confidence levels.
Economic Indicators Align Confidence Level
Abreast the MYCI are the strengthening economic indicators. Improvements are observed in all key metrics, with the economic outlook rising to 139 points. It is a momentous growth from previous quarters; a result of the substantial initiatives and strategies implemented throughout 2024. This optimism brings forward a promising future, highlighting an upward mobility of the overall nation’s economic outlook.
E-Wallet Gaining Further Momentum
The shift towards digitalisation is especially evident in Malaysians’ preference for cashless payment methods. As of Q3’2024, the e-wallet adoption rate has escalated up to 90%, with an average monthly spending of RM414.1. The usage is engraved in almost everyday settings, with groceries, restaurants, and CVS being the most frequent places for e-wallet transactions.
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After reaching a record high last quarter, the MYCI continued its remarkable ascent in Q3’2024, climbing 13 points to a new peak of 155 points. This upward trend reflects a renewed sense of optimism among Malaysians, driven by key improvements across various areas, including economic growth, employment stability, tourism surge, and increased local spending. Coupled with the strengthening Ringgit against the US Dollar, these factors have instilled hope among citizens, who see potential relief from rising living costs and a brighter financial future.
The optimism extended into all MYCI components depicted in the line graphs above, which will be elaborated further.
MYCI’s first component — current financial well-being, mirrored the overall index, reaching an unprecedented level of 166 points in Q3’2024. The recovery has been extending since Q4’2023, a 10 points increase as of last year. This is underpinned by the 5.3% GDP growth recorded in Q3 — a result of higher exports and increased foreign investments which have in turn created new job opportunities for the locals. In a closer look from Bank Negara Malaysia (BNM), Malaysia’s gross exports had actually risen to 7.8% in Q3, a 2% increase compared to Q2. Hence improvement is also observed in the employment rate in Q3, where 96.8% of Malaysians are employed and getting paid, translating a better financial stability for households and underpinning their confidence in their current financial position.
Malaysians’ confidence in their future financial well-being has also grown, with the index for this category reaching 175 points in Q3’2024, up from 167 points in Q2. It has surpassed the 170 points threshold, setting a new standard for the future. Stable incomes and steady prices for essential goods have contributed to this heightened optimism, as it indicates higher purchasing power.
Additionally, government initiatives aimed at alleviating extreme poverty, such as joint financing projects involving government-linked companies (GLCs), government-linked investment companies (GLICs), the private sector, and third-sector organisations, are set to reshape Malaysia’s socioeconomic landscape further. Hence, trust should be instilled in Malaysia when looking forward to the future financial outlook.
Higher disposable incomes have also translated into greater confidence in major spending, with the index for major purchases climbing to 146 points in Q3’2024, up from 141 points in Q2. This growth was particularly notable among lower B40 households, signalling improving financial conditions in this demographic.
While Q3 did not feature major cultural celebrations, the surge in spending could be attributed to the booming property market. The industry has recorded the highest number of property transactions in a decade, with 70,520 deals worth nearly RM29 billion. This, albeit some purchases may come in the form of investment, is believed that a majority is still reserved for personal use, which sparked spending on home renovations, furniture, and related items.
Sentiment regarding the current state of the economy also saw a sharp rise, reaching 139 points in Q3’2024, a 25 points increase from Q2. This positive outlook was consistent across all income groups, with their scores exceeding 130 points collectively. Besides the improved exports and investment mentioned above, the burgeoning tourism sector is worth crowning to be one of the driving forces of this positivism.
Particularly, Q3 marked the peak durian season, and this king of fruit definitely has its fans and brought spotlights to the nation from both local and international travellers. Penang alone, had anticipated a sale of RM1 billion from the durian industry. The sector is further pushed by Tourism Malaysia, which rolled out special durian tour packages and endorsements from international celebrities, attracting more international visitors and their recognition of us offering quality tropical fruit.
Looking ahead, sentiment for the state of the economy in the next 12 months reached 150 points in Q3’2024, a dramatic increase from 125 points in Q2. This optimism, also observed across all income groups, stems from the collective positive trends outlined above. While inflation remains a concern, it has remained relatively stable in Q3’2024. Whereby according to BNM, while government adjustments to diesel subsidies led to higher diesel and vehicle insurance prices, these were balanced out by moderating food and beverage costs, which is much of a necessity of everyday lives.
The look into activities carried out by Malaysians in the past 3 months revealed noticeable consumer shifts across various sectors such as shopping, payment preferences, travel, food consumption, and gaming.
A significant rise was seen in e-commerce activity, with purchases on platforms such as Shopee increasing to 38% this quarter, up from 30% in the previous quarter. Similarly, live-stream shopping such as Shopee Live, surged to 24%, compared to just 10% previously. This growth was likely fuelled by campaigns tied to the nation’s two key events – Hari Merdeka on the 31st of August and Malaysia Day on the 16th of September, where celebrations often include festive promotions and themed initiatives.
Digital payment usage has also seen a notable boost, with e-wallets, banking apps, and Buy Now, Pay Later (BNPL) services all gaining traction. Beyond the ongoing digitalisation of payment systems, this trend may also have been influenced by merchant collaborations with payment platforms during the Independence Day campaigns, offering incentives to encourage adoption. For instance, campaigns encouraging citizens to wear the national flag’s colours such as blue to get cashback discounts fostered both community spirit and increased spending.
In contrast, domestic travel has experienced a decline from 42% to 32% this quarter, while international travel remained steady at 12%. This dip in domestic travel may be attributed to the timing of the Diwali festival and Christmas, which falls in Q4’2024. Many travellers may have postponed their plans, reserving leave and resources for celebrations later in the year. Food delivery, on the other hand, exhibited a 20% increase in the use of third-party food delivery apps such as Grab. This rise is also likely tied to the discounts and promotions offered during the Merdeka season, further illustrating the strong influence of national holidays on Malaysian consumer behaviour.
These changes reflect the dynamic interplay of cultural events, technological advancements, and shifting market trends that shape Malaysians’ purchasing and lifestyle decisions.
Coming to the use of e-wallets in Malaysia showed a continuous upward trajectory, reaching a record-high adoption rate of 90% in Q3’2024. This unprecedented growth is further highlighted by the average monthly e-wallet spending, which peaked at RM414.1. While the consistent uptake of e-wallets is well established, the introduction of nascent digital wage payment systems has likely contributed to their growing prominence. Employees can now receive their salaries directly into e-wallet accounts, such as TNG Digital, making this payment method even more accessible and practical.
When comparing physical payments (cash) with digital payments, it becomes evident that cash usage has been steadily declining over the past year, while digital payments have continued to receive traction. In Q2 and Q3 2024, digital payments accounted for over 60% of payment preferences, mirroring similar patterns observed in 2022. This shift underscores the efforts of merchants to encourage cashless transactions and the increasing variety of digital payment options available. Malaysians are gradually reducing their reliance on cash, although it remains a necessity in certain contexts where digital payments are not yet accepted.
A further breakdown of the 62% share of digital payments reveals that e-wallets dominate the landscape, accounting for 28% of usage. This is followed by debit cards at 12%, bank apps at 9%, credit cards at 7%, and bank transfers at 5%. E-wallets have steadily gained ground, absorbing market share from other payment methods. Nevertheless, traditional options like debit cards and credit cards still maintain their place, highlighting personal preferences and situational factors influencing consumer behaviour.
Moving on, Touch ’n Go continues to dominate the e-wallet sector, reaching an impressive 93% usage rate in Q3’2024. Other major e-wallets, including MAE by Maybank, GrabPay, Boost, ShopeePay, and BigPay, have experienced slight dips but remained key players.
Touch ’n Go’s success is attributed not only to its loyal user base but also to its expanding range of features. Beyond facilitating utility payments and offering exclusive merchant discounts, it has introduced investment schemes such as the e-Mas gold investment option in partnership with CIMB Bank. This initiative has likely attracted a wave of new users by offering secure, bank-backed investment opportunities with the convenience of real-time monitoring and control. Additionally, the cease of WeChat Pay’s services in Malaysia during Q3’2024 may have prompted a partial migration of users to Touch ’n Go as well.
Uses of e-wallets remained most prevalent in three key categories: groceries (71%), food and beverage (68%), and CVS (59%). While the ranking fluctuates slightly every quarter, these three categories consistently lead the pack. This trend indicates that consumers prefer using e-wallets for daily necessities, often influenced by rewards programmes, timing, and collaborative campaigns. As consumer attitudes continue to evolve, vendors in these sectors should take note of tailoring their offerings to align with preferences and leveraging the potential of e-wallets to enhance customer satisfaction and loyalty.
Tracking tech trends in Q3’2024 revealed a unified increase in both awareness and familiarity across all available forefront technologies in Malaysia. Artificial Intelligence (AI) and Cryptocurrency continue to dominate public awareness at 94% and 92%, respectively.
Among emerging technologies, Virtual Reality (VR), Augmented Reality (AR), and Esports have shown the most dramatic surges in awareness. VR awareness climbed by 17%, from 71% in Q2 to 88% in Q3, while AR followed closely with a 14 points increase from 70% to 84%. Similarly, e-wallet awareness saw a significant 14 points jump, reaching 90% in Q3. The growing attention to VR and AR indicates a steady rise in adoption and exposure to innovative technologies within Malaysia. Although these remain relatively niche, the influence of high-profile collaborations and events has played a pivotal role in boosting public interest. For instance, CelcomDigi and U Mobile’s partnership showcased a VR headset that allowed Malaysia’s Minister of Communications to virtually experience SUKMA 2024 in Sarawak. Businesses and events like VAR Live Theme Park at MyTown Cheras and AR FEST KL which has interactive street art displays in major destinations have also brought immersive VR and AR experiences to the public, giving them opportunities to learn more about these technologies.
Esports, meanwhile, its remarkable traction has reflected deeply its growing influence in Malaysian culture. As of Q3’2024, the local team Selangor Red Giants (SRG) claimed champion victory at the Mobile Legends: Bang Bang (MLBB) Mid-Season Cup (MSC) — the first time the Malaysian team brought home this prestigious title. Further fueling this momentum is the significant increase in government support, with the Esports Fund 2024 for Esports Integrated (ESI) raised from RM250,000 to RM1 million, which is aimed at nurturing local talent and fostering growth within the industry. This combination of achievements and investment has led to a notable rise in awareness and familiarity, with esports achieving a 62% familiarity rate among Malaysians in Q3’2024.
Lastly, a worth noting trend is the growing interest in digital banking which has an awareness level of 83% and familiarity level of 63%, indicating high adoption rates. While it is a relatively new entrant to the financial landscape, these digital banks are steadily carving out their niche with ease-of-use features and appealing incentives. This sector is poised and expected to become a significant player in Malaysia’s ongoing digital transformation in 2025.
Extending from the above, the percentage of Malaysian crypto owners surged to 57% in Q3’2024, marking a sharp increase from 37% in the previous quarter. This 20 points rise reflects heightened public interest in and adoption of digital assets within the country.
As of August, Malaysia is attributed as one of the top 10 crypto-friendly destinations for digital nomads and companies. This recognition highlights the country’s progressive stance on cryptocurrency adoption, supported by clear regulatory frameworks and a unique talent pool. The developing infrastructure has attracted like-minded individuals and encouraged more crypto-related events, such as the Malaysian Blockchain Week (MYBW) hosted in Q3. With about 60 speakers and 2,000 attendees exploring emerging trends such as Web3 gaming, the event was a successful example of the growing crypto ecosystem here.
In terms of performance, the crypto market in Q3 showed favourable conditions following the US Federal Reserve’s first rate cut in 4.5 years. The interest rate decreased by 0.5% in September has helped accelerate the performance of several cryptocurrencies which will be discussed in the next section.
This strengthening sense of community, together with increased government engagement and a positive market environment, may have bolstered Malaysian confidence in digital assets, hence driving the greater crypto adoption in Q3.
The surge in overall cryptocurrency ownership indicates tractions in the types of coins owned as well. Notably, Q3 saw an increase in all types of coins tracked, with Bitcoin Cash (23%), XRP (20%), Bitcoin (17%), Ethereum (15%), and Dash (12%) as the top 5 holdings among investors.
Reasons influencing the adoption of these coins can vary from security features and market capitalisation to social influence. Yet, the most prominent force in Q3 was the rate cut mentioned above, which led to substantial price increases for Bitcoin, Ethereum, and Dogecoin following its announcement. To put it simply, this is seen as a positive move by the crypto community as there is a lower potential loss in their investments following the reduced interest rate.
As for Bitcoin Cash, there is growing attention on it due to its strong momentum exhibited in September, which is believed to be driven by increased adoption of peer-to-peer payment systems and heightened interest in altcoins.
Oppotus stays committed to acquiring insights in the next analysis, offering a unique perspective on the country’s landscape.
Note that the opinions presented regarding Malaysia and its people reflect the views of Malaysian citizens aged 18 and above, from all income segments, residing in key cities of the Peninsula, and selected in a representative manner.
For a more granular analysis of the data above, contact us at theteam@oppotus.com. Our team of experts would be pleased to facilitate a comprehensive review and offer customised recommendations tailored to your needs. Alternatively, explore the omnibus solution to incorporate additional measures for your business in our MOM study.
