Chapter 4The most impacted shoppers
Consumers at all income levels are feeling under pressure financially, with low income Malaysians leaning heavily on in-home FMCG.
Data collected at the end of 2022 shows that a significant proportion of consumers are currently still feeling under pressure financially. This cuts through all SEC groups as shoppers across the spectrum are feeling the financial heat, which is expected to continue through 2023. For households who fall into the low income bracket, negative financial sentiments are slightly more prevalent.
A higher proportion of low income shoppers are under financial pressure overall. This in addition to a high proportion who are currently sheltered by government subsidy programmes, but are anticipating future pressure in the coming years. These pressures have forced low income shoppers to lean heavily on in-home FMCG, a trend which started in 2020. Sales value for in-home FMCG skyrocketed, and has maintained at a high value and growth rate in subsequent years.
Looking forward, however, there is an expectation that lower income households will continue to lean on in-home FMCG for their basic needs, following three years of continual growth. Government subsidies are not expected to increase, which will force shoppers to be more deliberate in their spending, resulting in slower growth for in-home FMCG compared with the last two years.
What are the implications of this for brands?
