Malaysian shoppers turn selective as Asean growth fails to lift FMCG spending
KUALA LUMPUR: Cautious household spending and increasingly selective shoppers are making it harder for fast-moving consumer goods (FMCG) companies in Malaysia and other Asean countries to capture growth.
KUALA LUMPUR: Struggling consumer spending and pickier shoppers are proving difficult for fast-moving consumer goods (FMCG) firms in Malaysia and other Southeast Asian countries to achieve growth, according to a recent report. Despite steady economic growth throughout the region, FMCG companies are finding it more challenging to boost sales, as consumers become more discerning about their spending habits, stated a new Bain & Company and NielsenIQ report.
The report predicts that over 50 million people will join the consumer class by 2030. With FMCG value growth remaining stagnant between 2023 and the first half of 2026, weak sales volumes have been offset by continued price increases across the six Southeast Asian markets covered. As Southeast Asia's economy is expected to expand by 5.1% in 2026, household spending is being impacted by slower real wage growth and elevated household debt.
This is causing consumers to become more selective, with shoppers willing to spend more on products they view as providing tangible benefits while cutting costs in other areas. Praneeth Yendamuri, a partner and head of Asia Pacific Consumer Products practice at Bain, noted that consumer products companies can no longer depend on overall consumption growth or conventional notions of premium and value.
In Malaysia, the report highlights the need for FMCG brands and retailers to focus on a market where simply offering the cheapest or most premium product may not be sufficient. Seven in ten consumers who upgraded in one category have also downgraded in another. Beauty and baby care products are among the categories experiencing increased premiumization, particularly where consumers connect products with better health, safety, performance, or advantages for their families.
Household products, however, remain more focused on value. Approximately 58% of consumers expressed willingness to pay a premium for compelling reasons such as trustworthy quality, proven effectiveness, or significant performance improvements. Additionally, half of Southeast Asian shoppers stated they would switch brands immediately if their preferred choice was no longer available.
Businesses will need to make more precise decisions on where to compete and create products based on genuine consumer willingness to pay.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
