Stress Drives up Online Purchases in the New Normal


Dr Brian UOWMKDU

By Associate Professor Dr. Brian Wong Kee Mun

While Malaysians were restricted at home during the implementation of the Movement Control Order (MCO), a large number experienced stress leading to a significant increase in their online purchase frequency, a recent study by UOW Malaysia KDU School of Business has revealed.

The 2,163-sample online study on consumer behaviour from 15 to 28 April 2020 indicates that half of consumers surveyed made an online purchase at least once in 1 to 7 days. However, 16% of the consumers reported that they did not purchase anything online in the first 3 phases of the MCO period.

“Consumers’ behaviour change towards online purchase can be linked to the personal stress that they have experienced since the beginning of the MCO implementation,” said Associate Professor Dr. Brian Wong, the Head of School of Business at UOW Malaysia KDU.

The study shows that 34% of the consumers felt stressed in the past 1 month, with female consumers being slightly more stressed than their male counterparts. Out of the four stress factors measured in the study (i.e. nervousness, lack of energy, feelings of gloominess and dejection, and exhaustion), most of the male consumers (40%) felt significantly more exhausted under the MCO. While the female consumers also felt exhausted (41%), 38% of them responded that they also felt more nervous than before. Being exhausted with the panic shopping and nervous over potential exposure to COVID-19 perhaps motivated consumers to shop online instead.

With the MCO bringing most physical retail businesses to a halt, consumers’ online purchase (including websites, mobile applications, social media, telephone) were further revolutionalised. 55% of the consumers surveyed placed a high perceived value on online purchase during the MCO period. In fact, almost half (43%) of them were willing to pay more for an online purchase option, with up to 76% of them willing to pay a maximum of 5% premium on the usual price, as indicated in the study. The top 3 reasons for online purchase among the consumers included convenience, good value, and safety.

“With movement being restricted, it is understandable that food delivery became the top item purchased during the MCO period. The surge of online grocery shopping is also well explained by the hassle that consumers have to go through if  physically shopping in-store, such as the long waiting time to enter the premise and precautionary actions taken to prevent from Covid-19 exposure,” explained Dr. Brian. He added that “the other top items purchased during the MCO period included electrical & electronics, fashion, health & beauty, and home & lifestyle merchandise,”

Shopee came out as the top online purchase platform during the MCO period, while Grab Food was found to be equally popular among female consumers, revealed the online study. Lazada was the next preferred online shopping platform, while consumers also purchased directly from the merchandiser websites and applications. Social media platforms such as Facebook and Instagram were also among the favourite online purchase platforms.

“In order to predict consumers’ behaviour in the future, we also measured consumers’ expectations of the Malaysian economic outlook and their expected household financial condition in the next 12 months,” explained Dr. Brian.

The survey showed that while 30% of consumers take a neutral stand about the future economic outlook; 45% of them are hopeful of an economic recovery. However, only 38% of them expect an improvement in their household financial condition in the next 12 months. “With these indications, we predict that online purchase will continue to grow post-MCO period. However, consumers will be more budget-minded, opting for better value products and services.   Delivery services will remain essential for the next 3 to 6 months, while direct online purchase from the merchandiser’s website or application may change the retail shopping experience among consumers.

Prior to the COVID-19 pandemic the Malaysian e-commerce market value was estimated to reach US$ 4 billion in 2020. However, this is still lower than that of many other nations in the region. The boost of online purchasing during the MCO period will further escalate the e-commerce penetration rate and form the new normal among businesses in Malaysia. Dr. Brian concluded that, “Online platforms are no longer a choice for businesses to consider in the new normal condition. Rather, it is a “must” for them to embrace and implement in order to stay relevant.”

 

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21 May 2020

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UOW Malaysia KDU



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