This is part of our Southeast Asia Ramadan series, where we explore eCommerce insights for Indonesia, Malaysia, and Singapore as well as looking into how to overcome logistics issues associated with last-mile during Ramadan in countries like Malaysia. For all of these in one convenient package, check out our SEA Ramadan Guide 2020!
With the Ramadan period approaching, many who practise the Islamic faith are preparing for a lifestyle change to fast, do charitable deeds, and grow closer to God. For this topic,we have rounded up insights about eCommerce during Ramadan in Malaysia from one of our partners, HIJENTITY. HIJENTITY is a Muslim lifestyle and fashion company that owns the brands Tudung People SG and Homies in Jannah, and has physical outlets in Malaysia.
According to Filzah Zainal, Head of Marketing & Operations at HIJENTITY, “For many Muslims, Ramadan is a time for purifying the heart, a time for personal reflection, and self-restraint. Eid can also be seen as a celebration of one’s personal journey of self-discovery.”
This month-long period is a sacred time for a sizeable number of Southeast Asian Muslims, which includes those living in Malaysia. Since Muslims make up 61.3 per cent of Malaysians,1 the changes in behaviour are significant enough to cause ripples in the market in the month of Ramadan.
According to Google, spending for Ramadan and Raya goes up to MYR 18 billion (USD 4.13 billion) each year, with an average revenue generated per capita at MYR 900 (USD 206.51).2 On top of this, Malaysians who work in government linked companies will also get their bonuses paid out before Raya, leading to more disposable income for the festivities.
Criteo’s study in 2019 said that Southeast Asian countries saw an increase in sales 10 days into Ramadan and lasted through the 10 days before Hari Raya Aidilfitri.3 The same study also shows that browsing also already happens in the first week of Ramadan, but conversions happen more during the second half of Ramadan.
This behaviour can be explained by Malaysians’ price sensitivity, which we’ve also covered before in our collection of Malaysian eCommerce insights. When it comes to shopping at the Ramadan bazaar, they are willing to wait longer until the prices drop so that they can get the best deals.4 This behaviour is also seen in online channels, as eCommerce platforms also push promotional pricing to entice customers to buy as the month goes on.
In terms of when Malaysians shop online during Ramadan, iPrice has found that online shopping activity would increase by 105 per cent in 2018 at 5 am in the morning.5 This is because Malaysian Muslims would wake up before dawn to have their Sahur (pre-dawn meal) before they start their day. On the other hand, online traffic for shopping decreases when Malaysians buka puasa, or break their fasts, in the evenings. This dip in activity typically happens at 7 pm in the evening.6
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However, with the spread of COVID-19, consumer spending habits may change. The Malaysian government recently imposed a Restricted Movement Order from the 18th to the 31st of March.7 The annual Ramadan bazaars across the country have also been cancelled8. Physical retailers in Malaysia also saw a drop in sales by up to 50 per cent, but eCommerce retailers have benefited as more consumers turn to online channels to do their shopping.9
On 18th March 2020, the Malaysian government imposed a Movement Control Order10 under the Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967. Starting from the middle of March, it was extended to mid-April as of the time of this writing.
Under the Movement Control Order, government and private offices and physical retail outlets are to be closed. These exclude businesses and offices that offer essential services. No social gatherings and religious activities are allowed during the control order period. There are also comprehensive restrictions for Malaysians travelling abroad and restricted entry for foreign visitors.
These changes in behaviour may last into the Ramadan period, which starts from the 23rd of April to 23rd of May and the Raya holidays which take place on the 24th and 25th of May. If the Restricted Movement Order does not stretch over into Ramadan, many Malaysians may take precautionary measures which may affect some Raya traditions.
One of these traditions that may be affected is balik kampung, where Muslims return to their home state to visit their extended family. These celebrations usually mean open house visits and festive gatherings to break their fasts together. Since social distancing may take precedence to avoid the spread of COVID-19, whether this yearly tradition will take place en mass remains unknown. This would, in turn, affect shopping behaviour in this year’s Ramadan-Raya period.
Malaysians have been adapting their lifestyles to staying at home more. As this lifestyle change could increase online shopping behaviour, even among those who may not have shopped online before, we’ll explore how demand for different product verticals could change later in this section. With that said, let’s dive into the different product verticals that will see an uptick during this time period.
According to iPrice, fashion items are the most sought after products to buy during the Ramadan-Raya season. Popular searches during this period include baju raya (modest clothes for Hari Raya celebrations) and the names of local fashion brands like Fashion Valet, Muslimah Clothing, and Naelofar Hijab.11
For many Malaysians, getting a new set of baju raya for the festivities is a must. This extends to coordinating the outfits of the rest of the family members. In an interview with The Star, celebrity personal trainer Azmil Mohd Salleh said that his wife’s planning also extends towards other members of the extended family.12 This level of planning is done weeks in advance of the actual purchase, and the purchase of these clothes would happen during the Ramadan period.
In the same interview, Azmil also revealed that he preferred if the stores catered to all members of the family and had an online shopfront so that they are able to get the items of clothing all at once.13 For other families planning to match their clothes by colour, this would lead to consumers purchasing the same items of clothing for the family to wear, such as multiple sizes of baju melayu for men and multiple tudung and baju kebaya for women.
According to Filzah Zainal, Head of Marketing & Operations from HIJENTITY, some Malaysian families also make use of ‘tone on tone’ when colour coordinating their outfits. She says, “In Malaysia, some Muslim families can go one step further when colour coordinating what they wear. For instance, they can play with tone on tone – coordinating different shades of the chosen colour – when coordinating what they and their family are wearing.”
This isn’t limited to only traditional clothing. According to findings by Salaam Gateway14, some Muslims who buy modest fashion from stores not necessarily focusing on women who cover, as long as they can make their own style while respecting the rules of modest fashion. What’s important is that your brand can understand, empathise, and cater to the needs of the Muslim consumer’s modesty, and be sensitive to Islamic practices to prevent any backlash. This is good news for international brands that can serve this market via international deliveries.
To complete the look, Muslimahs may also turn to cosmetic products as well. According to Google’s study in 2019, searches for beauty and fashion tips goes up by 100% six months prior to the Ramadan season. This also coincides with Shopback’s insights where Health & Beauty products tend to do well during the Ramadan season.15 This also reflects the larger behavioural trend where the planning for purchasing Raya related fashion and beauty items are done in advance of the actual purchase.
On top of this, the rise of social media also means that Muslim families would take it to the ‘gram to showcase their thematic outfits for the year. According to Hootsuite/We are social, social media penetration in Malaysia is at 81 per cent, and Facebook and Instagram are among the top 5 social media platforms there.16 With this many users online, family members and friends can share what they wear to their connections on the online sphere.
Because of how ingrained the idea of having matching clothes during Raya is along with the rise of social media, online sales of fashion items are likely to increase this Ramadan period despite COVID-19.
As the coronavirus outbreak spread in 2020, Malaysians started doing more health-related searches on Google from the middle February, before the number of these searches spiked around the week the movement control order was announced based on research on Google Trends17. Another Google Trends18 report shows increases in DIY face mask and DIY hand sanitizer searches as well.
These health related searches also included topics on immunity and vitamin C. Customers hunted for different brands and looking up specialist health and beauty retailers and pharmacies, which suggests that many are stocking up on health supplements in a bid to boost their immune systems. This rush to keep their immune systems up doesn’t stop there, though.
In 2018, Criteo reported that home & living products had an uplift in sales during Ramadan by 42 per cent in Southeast Asia.19 This is because most families would be ready to receive guests in an open house during Hari Raya Aidilfitri. Thus, spendings on home and living items to prepare the house would also coincide with the Ramadan period.
During this period, Google has identified that homemakers would search for cleaning tips and cleaning products in order to prepare the house to receive guests.20 These guests can include extended family, friends, and even strangers,21 so the house is expected to be crowded during the Hari Raya celebrations. However, with the COVID-19 outbreak, there is some uncertainty on whether homeowners would be willing to receive that many guests this year.
If the situation allows it, many hosts look to decorate their homes for the upcoming Hari Raya celebrations, usually in greens, in conjunction with the celebrations.22 Green is a favourable colour for this celebration because of its strong association with the Islamic faith.23 Some of these furnishings bought include curtains, decorations, lightings, and traditional oil lamps known as pelita, as lighting the pelita is a symbolic act to attract spirits and angels into the home.24
As people expect to stay home for extended periods, many would be tempted to purchase more home and living items to make life and work at home more comfortable, with additional furnishings like pillows, essential oil diffusers, table runners and more coming to mind. Some may potentially begin DIY home improvement projects, like repainting their own rooms, considering that manpower for full renovation works may be hard to comeby amidst social distancing measures.
As for where they will find these items, Google found that Malaysian homemakers would have eCommerce apps like Lazada, Shopee, and Carousel downloaded.25 These sites usually run promotions online in conjunction with major shopping seasons, and Ramadan is no exception. According to iPrice, Lazada’s Ramadan and Raya Sale can see home & living items discounted up to 90 per cent during this festive season.26 To prepare for this influx of orders, it helps to stock up on your inventory and have a reliable shipping partner with eCommerce shipping options ready to take on the increased volume in orders.
Many Muslims who moved into city centres like Kuala Lumpur would make the annual pilgrimage back to their hometowns, known as ‘balik kampung’ in the Malay language. This often means that these families will be travelling by car, bus, or plane to reach their destinations. If they’re travelling by car or bus, the road trip may take hours as the mass exodus would cause jams on the highway.27
To prepare themselves for this, families would purchase things in the mom & baby product category like child car seats and bottle warmers in preparation for the long journey.28 On top of that, consumer electronics would also see a spike in purchases amongst Malaysians.29 While the data found in Shopback’s study reveals an increased purchase in consumer electronics at large, travelling families could be buying things like portable car chargers and power banks in preparation for the trip via car.30
In terms of when there will be consumer intent in these travel essentials, Google’s findings shows that interest in homecoming related searches would surge in week 4 of Ramadan and the first week of Raya.31 If you’re selling these products, you can plan your online promotions around this time period to drive more potential customers to your online store.
However, there is a likelihood that traveling and their associated eCommerce activities may take a hit since the Malaysian government is discouraging anyone from going back to their hometown during the lockdown.32 If the lockdown continues, people could be less willing to leave their current location for their hometowns, and thus have less of a need for these travel essentials.
Even though the COVID-19 outbreak is causing a lot of uncertainty on the Ramadan and Hari Raya festivities, it’s likely that Malaysian Muslims will continue these celebrations within their own nuclear families. Thus, eCommerce businesses would do well to prepare themselves to cater to these changes in behaviour during the Ramadan period.
To do this, it’s vital to have a good eCommerce presence along with strong delivery capabilities. For one, if you have your own Brand.com, you could tap onto the popularity of social media in Malaysia in order to get your items out there. On the other hand, listing your products on local eCommerce marketplaces like Shopee, Lazada, or PGMall will get your products in front of many buyers, especially if you participate in the Ramadan promotions. You’ll also want to look out for any upcoming logistics challenges that Ramadan could bring to eCommerce and last mile delivery, which you can read about in our new article.
If you’re on these platforms, it helps to start early in order to capture your buyer’s interest and have them convert into sales in the second half of the Ramadan month. Finally, having a reliable shipping partner that can reach all parts of Malaysia during this time of the year will ensure that your entire eCommerce shopping experience is integrated and seamless.
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Want to learn more about Southeast Asia’s Ramadan opportunities? Check out our series below:
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