• Jeff Rajeck

Social commerce in Southeast Asia: Malaysia

There are many reasons why Malaysia should capture the attention of marketers who are reviewing their Southeast Asia (SEA) strategy.


First off, the country has a large population - around 32 million in total, of which approximately half are consumers aged between 18 and 54. Income levels are relatively high for the region, around US$30k GNI per capita, and the country is largely English-speaking, ranking 3rd out of 25 for English proficiency among countries in Asia.


Malaysia's population is digital-savvy, too. The country's Internet penetration rate is over 80% and Facebook estimates that it has more than 22 million subscribers in the country. Ecommerce adoption is high, with more than 70% of its consumers shopping online in 2020.


But what does all this data mean for marketers? How are Malaysians using social media for their online shopping? Should companies focus more on social media channels to reach Malaysian consumers?


To find out, Econsultancy and Magento recently surveyed hundreds of consumers and marketers across Southeast Asia (SEA) and asked them about how they are using social media for commerce. Below are summary results from respondents from Malaysia, and for more on this topic, please download the full report here: The State of Social Commerce in Southeast Asia.


1) Confirmed: Malaysians use social media a lot

Our survey shows that Malaysians don't just have social media accounts, they use it regularly.


WhatsApp, YouTube, and Facebook are used every day by more than 3 in 4 people in the country - and both Instagram and WeChat are used by a higher percentage than the SEA average.


Additionally, Malaysians use social media a lot. More than 7 in 10 are on social media for at least an hour every day and nearly half use it for more than three hours a day.



Social media is, therefore, a great channel for marketers seeking to reach Malaysian consumers.


2) They shop on social media, too

Malaysians don't just use social media to be 'social'. When looking for information about potential purchases, nearly all Malaysian consumers turn to social media.


More than 8 in 10 use Facebook for recommendations and reviews and around half do the same via YouTube and Instagram.



While it's likely that marketers are already using social media for brand messaging and promotions, this data should encourage them to spend even more time listening, posting and advertising on social media channels.


3) And social media influences their purchasing decisions

Consumers in Malaysia are also keen on purchasing items that they see on social media.



Around 7 in 10 agree, either strongly or somewhat, that they buy products online after seeing them on social media. This is slightly ahead of the SEA average and a testament to the power of social media to drive purchases.


And the Malaysian social commerce journey doesn't end with the purchase. Many in Malaysia also share what they have bought on social media, with 8 in 10 respondents indicating that they use at least one social network to do so.



4) But many consumers are still not using 'social commerce' to its full extent

When marketers think of 'social commerce' many imagine that it should resemble how consumers in China shop via Taobao. Meaning, consumers use the same platform to search for products, read reviews, ask for opinions and then buy.


This vision of social commerce, though, does not seem to be how buying on social media works in Malaysia. Whereas Malaysian consumers find social media valuable for the early part of the journey (e.g. finding special offers and viewing photos from real customers), few find buying on the platforms (via 'shoppable ads') valuable.



The reason for this is likely to be that consumers have many ecommerce options. Brand websites and marketplaces compete with social media for the final click.


Marketers can, of course, offer consumers a point of purchase through social media, but they should not be surprised if it is not used by Malaysians to a great extent.


Social commerce, it seems, has room to grow in Malaysia.


5) Malaysian businesses agree: Social media drives sales

While consumers are not necessarily clicking to buy from social media in Malaysia, merchants are still enthusiastic about the results that they are getting from the platforms.



Six out of 10 professional respondents said that they strongly agreed that social media drives online sales - and not a single respondent disagreed.


So, while critics can point to social media's dismal record in driving direct, 'on the platform' sales, Malaysian businesses still recognize that social media plays a vital role in the discovery and research phases of the customer journey.

6) And they think social media's influence will grow

Businesses are not aware of the benefits they get from social media, they are actively investing in the platforms. When asked how their budgets for social commerce technology will change over the next 12 months, 60% said that they will increase and not a single respondent reported a plan to decrease.



So, whether it's social listening, management systems or data analysis tools, businesses want more social selling technology to reap the benefits of being more active on social platforms.


Over a longer time horizon, the sentiment is the same. Every respondent indicated that social commerce will become increasingly important over the next 5 years, with, again, no dissenting views.



Marketers who target Malaysia and do not yet have a social selling strategy should, therefore, take another look at what they are doing on social media. Businesses in the country clearly believe that social media is important to the bottom line - and will become increasingly so in the future.

7) Challenges remain, but Malaysian businesses appear ready to face them

Integrating ecommerce with social media is not without its challenges, though. Many Malaysian professionals feel that they do not have the technical skills necessary and they also indicate that their data structure isn't up to the task. They also think integration is expensive and that data security issues remain.



Yet, within the list of barriers to success, there are a couple of indicators that businesses in Malaysia are prepared to face the social commerce challenges. Only 1 in 10 businesses say that they lack internal buy-in for the integration initiatives and hardly any (3%) indicated that their companies lack the desire to change existing ecommerce workflows.


Businesses who do not yet consider social media to be a serious channel for commerce need to review the data in the report which shows that the market is moving forward with social selling. And, if the consumer sentiment is any indication of the size of the opportunity, laggards will be missing out on the significant growth available to those who are successful with social commerce.


For much more on this topic, please download the full report: The State of Social Commerce in Southeast Asia.

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