Higher Past Promo Levels
Believe it or not, Malaysians were more promo-reliant in the past
There is no question that promotional sales are higher than years ago. However, promotional share has not recovered to pre-Covid 19 levels even. To examine why, we need to go back to 2020 to observe what caused the drop-off initially.
During the Movement Control Order (MCO) in 2020, shoppers were restricted in their movements and as such, were less choosy about the products they needed to purchase as promotions were not the priority. Thus, shoppers ended up purchasing groceries in outlets around their vicinity instead of travelling a longer distance for a supposed better deal. This led to the rise in outlets like 99 Speedmart and Eco Shop, which do not push promotions as much since they are focused on Every Day Low Price (EDLP).
But even after the pandemic, shoppers have been accustomed to the dependable EDLP outlets and thus, these outlets continued to grow even during the endemic and post-endemic periods. Although the promotion-driven outlets recovered, some market shares have not. So, while it is important to make sure our promotions are incremental and effective, our strategy without promotions must be just as strong.
Promotional sales are forecasted to grow still but the promotional share may not necessarily grow because 99 Speedmart still commands such a strong loyalty with or without promotions and Eco Shop continues to be an emerging retailer. In other words, winning using promotions is important, as is winning without promotion.
This report serves as a highlight to the key promotional facts to help manufacturers optimize their promotional strategy to ensure incrementality and efficiency in Malaysia. Promotions will continue to be a major part of Malaysian shoppers’ decision making so we need to ensure we are well-equipped to make the right decisions regarding our strategy and remain one step ahead of our competitors.
The full report will reveal other facts about promotions such as the type of categories that rely heavily on promotions, whether shoppers are going on more exclusively promotional trips or will shoppers mix promotions in their basket as well as the target groups for our promotional activations among other key facts to assist you in your decision-making.
Understanding the promotional landscape in Malaysia will be vital for manufacturers to get better returns on their investments in promotional activations and realize end goals from running the promotional activities.
