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Being one of Southeast Asia’s Tiger Cub economies, Malaysia has always been an attractive destination for businesses selling womenswear. According to Euromonitor, womenswear retail value stood at USD 2.6 billion in 2018, and was predicted to hit USD 3.4 billion in 2023.
Selling items online is increasingly becoming a vital sales channel, with Statista1 reports online purchases of consumers goods was US$ 3.0 billion in 2018 and is predicted to grow at a CAGR of 13.6 per cent to reach US$5.7 billion in 2023. This value is expected to hit US$ 4.3 billion in 2020. From those online purchases, fashion will make up US$ 753.6 million in 2018 and is predicted to grow by a CAGR of 11.5 per cent to hit US$ 1.3 billion in 2023. In 2020, the value of fashion purchased online is estimated to grow to US$ 1.0 billion in 2020. While offline is still king in Malaysia, shoppers in the country are increasingly buying fashion items online. Online purchases of fashion stood at 9% of all purchases in 2019, but Statista also estimates that in 2024, 13% of all fashion purchases will be done online.
So what’s driving Malaysia’s purchases of womenswear online? What brands and platforms are doing well, and what drives women in Malaysia to buy their fashion items online?
Before we continue, it’s vital to note that Malaysia is a multicultural country. Malays make up the majority of the population, a quarter of the population is Chinese, with the remainder being ethnic Indians and other races. This cultural make up will let us see an interesting mix of insights when it comes to what drives online womenswear purchases in the country as we can see below.
Outerwear, like shirts and blouses, is the largest segment of apparel and footwear bought in Malaysia, consisting of 86 per cent of all women's fashion purchases in the country. In particular, there was a surge in casual dressing in Malaysia, which led to stronger current value growth of women’s shirts and blouses in 2018, according to a report by Euromonitor2. These tops are usually matched with trousers, skirts or jeans.
Malaysians tend to be price-driven shoppers. With there being many brands that sell these outfits at an affordable price, this trend helps to explain how Padini Holdings Bhd, Fast Retailing Co. Ltd (Uniqlo), H&M, and Inditex (Zara) remain at among the top positions for apparel and footwear market share in Malaysia. In fact, Brands Outlet3, a brand owned by Padini with a value-for-money positioning, holds the highest market share of all womenswear brands in Malaysia, which leads us to our next point on affordability.
Modest Wear was also highlighted by Euromonitor as an upcoming trend in Malaysia. Malaysia is home to a large population of young Muslims who are willing to express themselves more through what they wear but want to balance this with their cultural need to remain modest by not revealing their skin.
We’ve covered three key trends related to modest wear in Malaysia in an earlier article, but it doesn’t hurt to recap some of those points here.
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One of the most expensive products that Bawal Exclusive, a women’s modest wear brand in Malaysia, sold to date is a RM50,000 (US$ 12,000) hijab made from imported Japanese textiles and Swarovski crystals. The custom-made hijab was ordered in time for the Hari Raya season in 20194.
In the meantime, dUCk Scarves, also a modest wear brand in Malaysia, launched a limited edition scarf costing upwards of RM 800 (US$ 190) that sold out within the first five minutes of launch. The rising affluence and willingness of Muslim shopper to spend on premium modest wear shows their intention to make statements with what they wear.
Brands that position themselves to specifically target Muslimahs (young Muslim women) are flourishing in Malaysia. These include the aforementioned dUCk Scarves, Bawal Exclusive and also Naelofar Hijab - a modest wear brand founded by Muslimah influencer Neelofa who has 6.8 million followers on Instagram5.
On the other hand, brands that don’t position themselves with a specific Muslimah angle can also do well among this target group. Brands that sell items of clothing that can sufficiently cover one’s skin, like long-sleeved blouses and long skirts can also do well. It’s also important to understand and empathise with your Muslim consumers and their Islamic practices to prevent unwanted backlashes to your brand. One example is when Nike unintentionally used a design that looked like the Arabic script for “Allah” on the sole of one of their shoes which sparked a global Muslim boycott in 19976.
Apart from Padini’s Brands Outlet brand, the major womenswear brands that are doing well in Malaysia are fast fashion brands that are known for being affordable. Euromonitor2 notes that most of these top brands hold on to their market share through strong branding and constant promotions and discounts. Part of this effectiveness could come from the economic pressure that the Malaysian middle class is facing: salaries that don’t seem to be rising in tandem7 with rising living costs8 and feeling pressured by higher taxes9.
In fact, a 2018 study by the Malaysian Communication and Multimedia Commission (MCMC)10, 73 per cent of Malaysian shopper respondents stated that better prices offered by online retailers are their main motivation for shopping online. This search of good deals also leads to many in Malaysia going to Chinese websites for those who know how to navigate them.
Taobao, a Chinese-language online shopping platform owned by Alibaba receives more than 400 million monthly visits, and according to Similarweb11, Malaysia is fifth on the list of countries that visit that website the most. Products on Taobao are known for being cheaper than on most online platforms.
If you’re selling womenswear in Malaysia, it’ll be good to take into account Malaysian shoppers’ price sensitivity. While it could be difficult to match the discounts and promotions that more established brands rely on, there are other avenues to lower your overall prices and offer a great experience to your shoppers which can be achieved through eCommerce - which we’ll cover in the next point.
Padini Holdings Bhd, the current womenswear market share leader 2, has more than 90 per cent of their revenue being generated domestically in Malaysia with their primary distribution method being their numerous brick and mortar stores all over the country.
However, they’ve also noted the increasing prominence of eCommerce1 in Malaysia is changing consumer behaviour when it comes to purchase decisions. In the management discussion section of Padini’s 2019 annual report12, they cited this change of behaviour due to online shopping as a strategic risk they have to take into account if they are to retain their current leading position in the country. Statista also estimates that 90 per cent of Fashion sales will be done offline in Malaysia in 2020, but that’s set to drop to 87 per cent in 2024.
According to a report13 by eConsultancy, today’s online shoppers prefer to shop on eCommerce platforms that feature established brands. These would include well-known websites like Zalora, Lazada, Shopee and Prestomall. However, these shoppers have increased availability of information on price, and access to reviews found online or from posts on social media to find out a product’s quality. A Wirecard study14 found that 96% of Malaysian online shopper respondents liked cross-channel shopping with most respondents doing it to compare prices.
Here, we can see how different platforms add to the overall eCommerce experience for Malaysian womenswear shoppers. Lazada marks products that are eligible for free shipping on their platform, while also clearly showing the discounts and how much people can save on the pricing section of each of their listings to cater to shoppers’ price sensitivity. The free shipping part is particularly important, with 57 per cent15 of Malaysian shoppers saying that cost of shipping is the main reason holding them back from shopping online according to a study by Rakuten.
Fortunately, pricing isn’t the only thing that Malaysian womenswear shoppers are concerned with when it comes to their shopping experience. In the same Rakuten study, 70 per cent of Malaysian shoppers said that international shopping websites offer a wider range of products, 50 per cent of shoppers said international websites provide better quality products, and there’s a preference for international brands when it comes to women’s fashion.
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With more access to information, reviews, price comparisons and ways of finding new brands, Padini and eConsultancy noted that online shoppers these days focus more on the shopping experience and the product itself as opposed to just having loyalty to a particular brand. For instance, Fashion Valet16 focuses on curating and growing upcoming Malaysian fashion through their online store, which also includes traditional wear and modest wear. Poplook17 on the other hand, is an online store whose bestsellers are modest wear.
When all of this is taken together, it means that there is room for other up and coming international online stores to break into Malaysia’s womenswear scene. Beyond catering to Malaysians’ price sensitivity, your brand can leave its mark on the market by offering styles or products that aren’t easily available in local stores, vouch for your product quality through reviews and also have a consistent and reliable shipping experience.
Social media engagement is particularly important for brands looking to make it big in Malaysia. The Rakuten study also showed that Malaysians have the highest engagement rates for Malaysia shoppers via Facebook, with 63% of respondents following international brands, and 36% of Malaysians following international brands on Instagram. Malaysians stand out in APAC for being more receptive to brand discovery through social media advertising (65 per cent) and through influencer marketing (21 per cent).
In Malaysia, some of the biggest influencers include Nelydia Senrose18 (2.9 million followers from Malaysia according to HypeAuditor), Izara Aishah Adib19 (1.3 million followers from Malaysia) and Elyn Leong20 (142.7 thousand followers from Malaysia).
Another aspect of eCommerce that merchants need to take note of is how social media and social commerce changes the way shoppers interact with their stores according to Euromonitor2.
One trend to note is the direct integration of a shopping function into social media pages which enables high-speed “inspire and sell’ customer conversions, one example being Instagram Checkout. Combining this with Malaysians’ tendency to engage with social media advertising from international brands, it’s good to ensure that channels like selling on Facebook and Instagram are considered when engaging your Malaysian audiences.
In the end, Malaysians are quite price-driven, but having been empowered by eCommerce, are willing to try new products and brands beyond household names. Casual wear and established brands like H&M, Padini and Zara are still going strong, but the rise of modest wear can’t be ignored either.
The whole experience needs to be taken into account when reaching them - from being discovered through social media, to the prices and reviews they see online and ultimately the shipping experience. If you’re a pure play online store, the delivery of your product to your Malaysian consumers is the first physical touchpoint they’ll have with your brand. It’ll be good to consider working with a shipping partner with a strong international shipping network in Malaysia to cap off the great shopping experience you want to give to your Malaysian consumers.
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