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A retail revolution is underway in Southeast Asia

Consumers’ adoption of technology is fundamentally disrupting the retail value chain. Will your organisation be left behind?          

KUALA LUMPUR, 1 July 2016 – Online shopping is gradually becoming the new normal for Malaysians, with almost half of Malaysian consumers making online purchases at least monthly, according to PwC’s Total Retail 2016 Survey (Southeast Asia report). This growth is encouraging considering that Malaysian consumers are relatively new to the online marketplace--nearly 60% of Malaysian respondents to PwC’s survey reported buying online only within the last three years.

In PwC’s most comprehensive Total Retail survey to date, nearly 23,000 online shoppers in 25 countries revealed the changing behaviours that will drive the coming retail revolution. The Southeast Asia report features local insights from our survey of consumers in Malaysia, Singapore, and Thailand. It illustrates what drives Southeast Asian consumers differently from consumers around the world. 

This includes usage patterns of mobile phones to make purchases, where Southeast Asian consumers are leading the world. 66% of consumers in Malaysia and Singapore each and 73% of consumers in Thailand use their phones to make purchases (the global average is 54%). Malaysian consumers are ahead of other Southeast Asian countries in terms of reading reviews on social media (69%) and accessing promotional offerings (74%). 

Scott Constance, Senior Executive Director and Retail and Consumer Consulting Leader for PwC South East Asia Consulting said:

“It’s exciting to see the increasing adoption by consumers in Southeast Asia of technology-enabled shopping behaviours. Malaysian consumers are relatively new to the online shopping market but are clearly on the leading edge globally in the areas of mobile and social shopping. This expands the universe of possibilities for retailers who want to engage individually with their consumers, but also presents a challenge to retailers as consumers broaden their range of channels for interacting with brands vying for their attention.”

Opportunities for retail stores to reposition themselves

Even with the rise in online shopping, the role of the bricks and mortar retail store continues to be important. Malaysian consumers make it clear that they want the retail store to be a portal to the wider brand experience and product assortment. They want more knowledgeable sales associates to guide them on the journey. They want the ability to order an extended range of stock across a store network or brand, and the ability to gain access to information about product availability at other retail locations.

The threat to retailers from not providing this experience is worrisome - the lack of access to products desired by consumers locally could lead to lost sales. It is a key factor motivating 61% of Malaysian consumers to buy from retailers outside their own country.

Scott continued:

“It’s important for brands to consider how strongly today’s consumers, primarily millennials, are driven to buy or experience things because of the fear of missing out (FOMO), and to use that as an incentive to evolve amidst rising competition. The single most important factor which will keep retailers truly fit for the future is the ability to earn trust by delivering on what consumers want, even if it means going outside the four walls of the store to make it happen. It’s also critical for brands to follow through by creating new value for these consumers through technology and new innovations.”

Changing demands in retail transactions and logistics—they want it now

Consumers in Malaysia, like those around the world, are demonstrating a continually increasing desire for faster service at a location of their choice. Over 60% of consumers in Malaysia have a willingness to pay for same-day delivery of online orders—and there is growing awareness and demand for delivery within the hour. The same trends are occurring in other countries across Asia.

But there is a challenge: Brands competing to serve these consumers face a complicated set of consumer preferences for payment and order fulfilment across Asian countries. In some cases, commerce is facilitated by the wide adoption of credit and debit cards or proprietary electronic payment networks. In other Asian countries, cash remains the most preferred payment option, complicating the effort to fulfil orders for delivery, with adoption of electronic payment options lagging behind.

Scott added:

“The complexity of the back-end of commercial transactions outside of the bricks and mortar environment is a major challenge for brands in Southeast Asia. Consumer expectations for service and responsiveness are no different if not higher, and many companies’ supply chains struggle to meet the challenge with patchwork processes, technologies, and infrastructure not built for purpose.  It’s an area ripe for innovation in the coming years as brands evolve to fulfil consumer demands.”  




1. The four key themes emerging from the Total Retail 2016 Survey (Southeast Asia report) are:

  • Nearly everyone, everywhere is shopping online
    About half of Malaysian respondents buy online at least monthly and only 7% have never shopped online.
  • Southeast Asia shoppers lead the world in mobile and social adoption
  • There is strong unserved demand for broader product assortments 
    Consumers want access to a variety of products across the brand or across the retailer’s store network at a one-stop shop (the retail store).
  • Consumers increasingly want more delivery options, the day they order

2. Download the report here:


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