This year’s Ramadan celebrations in Malaysia will be notably dampened in light of the country’s efforts to curb the spread of the novel coronavirus (COVID-19).
With much of the world on lockdown and this year’s Ramadan bazaars cancelled, brands and retailers have a true opportunity to help Muslims, who make up 60% of Malaysia’s population, continue their beloved Ramadan traditions while sheltering in place.
Ensure Ample Stock And Home Delivery Slots
With Malaysians currently in the “Restricted Living” phase as of 10 April, there are three key behaviors that we have observed as consumers adjust to living amid the global pandemic: Malaysians have embraced home-cooking; they are frequenting smaller format shops that are closer to home, such as minimarkets and provision shops; and many Malaysians have turned to online shopping to fulfill their household needs.
We see these trends elsewhere around the globe and we believe that they will continue during Ramadan. To help consumers who are sheltering in place and looking forward to celebrating privately, FMCG manufacturers of categories that are popular during Ramadan, such as butter and margarine, fruit beverages and dry groceries, should ensure that their products are present and constantly well-stocked in smaller format stores. Out-of-stocks are lost opportunities, particularly for manufacturers, as one in four consumers have indicated their willingness to switch brands when faced with out of stocks. For key pandemic pantry items such as Hand Care, Snacks, Body Care and Household cleaners, the percentage of consumers willing to switch to new brands increases to 40% – 50%.
To take into account the scarcity of raw ingredients, local manufacturers can consider ramping up production and distribution of premix products associated with Hari Raya. During Ramadan-Raya 2019, cooking mixes saw close to 14% growth versus Ramadan-Raya 2018, and we believe to see even stronger growth during this Raya season given the challenges in stocking raw ingredients.
Retailers, too, need to strengthen their online shopping and delivery capabilities as we approach Ramadan. Since the country’s Movement Control Order (MCO) was implemented on March 18, many online grocery retailers have struggled to keep up with the sudden spike in demand.
Luca De Nard, Managing Director of Nielsen Malaysia, says that the MCO could be a catalyst for growth in online shopping, but only if retailers can demonstrate the soundness of infrastructure and supply chain. “Retailers that can ramp up their online capabilities and provide seamless customer experience ahead of the festive shopping period will be able to convert ‘forced trialists’ into frequent online shoppers even after the restriction movement measures are lifted,” he says.
“Retailers that CAN ramp up their online capabilities AND provide seamless customer experience ahead of the festive shopping period will be able to convert ‘forced trialists’ into frequent online shoppers even after the restriction movement measures are lifted.”Luca de nard, Managing Director, Nielsen Malaysia
Inspire Malaysia’s home cooks
With most of the country confined within their homes, home cooking is on the rise in Malaysia. A recent survey we did showed that one in two Malaysians are cooking at home more than once a day since the MCO came into effect. As we approach Ramadan, brands can take this opportunity to inspire and empower Malaysians to recreate their favourite Ramadan bazaar favourites in their own kitchens.
Given that 76% of Malaysians say that they are spending more time on social media under restricted living conditions, brands should leverage social media to communicate and engage with directly with consumers, whether through recipe videos, home cooking contests and other content that can ignite the spirit of Ramadan and Raya in consumers’ hearts and homes.
Manufacturers should also reassess the appropriate size to market, given that Ramadan and Raya celebrations will most likely be among a smaller family unit. During past Raya seasons, consumers often purchased larger pack sizes or quantities (share packs) of food and beverages to cater for the number of large social gatherings such as family get-togethers and open houses.
“During the 2019 Raya festive season, we saw a 43.4% growth in the average size per pack in the fruit beverage category,” says De Nard. “Without the usual buka puasa gatherings and Hari Raya open houses, consumers will not need to buy in such large quantities, which means manufacturers do not need to enlarge unit sizes this year.”
Rather than increase unit sizes, De Nard says manufacturers should consider bundled promotions on favourite Ramadan products such as rose syrup and evaporated milk (for the popular sirap bandung) or butter together with a butter container. In fact, three of the top five banded promotions last year included a free container.
Retailers, too, can come up with DIY meal kits containing ingredients for Malaysians’ favourite recipes that consumers can order and have delivered to their home. This is a great way to discourage wastage and unnecessary panic buying, as people will buy just what they need to prepare their favourite meal.
Last year, price promotions drove 30% of Raya sales, which is higher than the 22% seen during non-festive periods. Most of these price reductions were seen in beverages and dry groceries, with butter/margarine leading all Raya categories with 48% sales derived from price promotions.
This year, we expect products with competitive price promotions to do even better, as two in five Malaysians have lost some of their income as a result of the MCO, and will therefore be more price conscious.
CUSTOMER EXPERIENCE MATTERS
With a large percentage of Malaysia now in lockdown and experiencing what it means to have restricted movement, limited access to physical stores and an expanded reliance on digital connectivity, it is more important than ever for companies to demonstrate their relevance in consumers’ lives.
“Retailers and manufacturers have a golden opportunity to meaningfully connect and engage with consumers during this upcoming festive season,” says De Nard. “Those who have a solid understanding of the changes in shopping, usage and behaviour during this period will no doubt contribute to Malaysians’ Ramadan-Raya period being a happy one.”
The insights from this article were derived from:
- Nielsen Retail Measurement Services
- Nielsen “COVID-19: Where consumers are heading?” March 2020 survey