TNS Malaysia head of client service Dan Foxman and head of qualitative Suzanne Huang examine how international brands can take on local champions.
Malaysia has long been considered as one of Asia’s most developed economies, now arguably more so than ever.
While international brands have enjoyed a relatively accessible and receptive market in Malaysia for many years, they are coming up against increasingly strong competition from local brands.
Well known international brand Havaianas, for instance, is being shouldered out of the market by local fashion brand Flipperslipper, which is also available overseas where it is taking market share.
Home-grown Exabytes managed to anticipate demand for web-services in the Malaysian market, which has made it one of the leading providers of web-hosting services there, as well as leading growth in Singapore and the US. The international expansion of these local brands strengthens their position in the local market and will give them more ammunition to keep big international organisations at a distance.
Another big challenge global brands are coming up against is the need to target different ethnicities and religions in this highly fragmented market.
“Multinationals need to understand the local nuances to appeal to Malaysia’s discerning consumer who has a growing choice at their fingertips”
The Muslim Malay population make up around 70% of consumers, andare growing in influence and spending power. Around 20% are Chinese Malaysians – mostly Buddhist – with the remaining 10% are made up of Christians and Hindus. Clearly this calls for certain considerations when creating brand campaigns.
For a predominantly Muslim population, brands need to ensure they are aligned with traditional values around family, marriage and culture. In the personal care industry there is a growing demand for halal cosmetics, as shown by Sunsilk’s Clean & Fresh variant. This was marketed specifically to hijab-wearing Malaysian women and – unlike competitor brands – didn’t show women flaunting their hairstyles.
Looking at different sectors, the FMCG industry is experiencing rapid growth, with local Malaysian brands more empowered than ever before. WIPRO UNZA strikes back with local products like Safi, special skincare products to meet the needs of the modern Muslim women, while Nestle’s share of the market is being eroded by the likes of IndoCafé and Kapal Api.
Taking into account this stiff competition, multinationals need to understand the local nuances to appeal to Malaysia’s discerning consumer who has a growing choice at their fingertips.
Highly connected market
It is perhaps one of the better-known facts about Malaysia that it is a highly connected market.
Connected Life, TNS’s annual report of 60,000 consumers, found that 95% of Malaysia’s population now own a smartphone. The average millennial (aged 16-24) spends 3.8 hours every day on their phones – the equivalent of 1,241 hours a year – making this age group a ripe target for digital marketing via social media or instant messaging platforms.
One brand that has capitalised on this connectivity to make a splash in the market is Nando’s, the much-loved South African chicken restaurant, which has invested heavily in digital in recent years. With plans to reach 140 stores across Malaysia within the next 10 years, reaching a wider audience through Facebook and other digital platforms will play a key part of this strategy.
The last year has also seen major developments in the e-commerce market as home-grown brands adopt cash-on-delivery payments. This has helped address concerns from wary consumers about the safety and reliability of online payments.
Brands like Lazada – seen by many as the Asian equivalent of Amazon – have capitalised on this, with latest figures suggesting there are now over sevens million online shoppers in Malaysia. The popular online purchase are travel services (including flights and accommodation), film tickets, fashion products and consumer electronics.
There is no doubt that Malaysia is a complex and increasingly sophisticated market, yet one that offers significant returns for brands which invest the time to tailor their campaigns to the religious, cultural and personal preferences of the local consumer.