Having spent over 15 years working across product innovation, banking, and social impact, I’ve had the privilege of analysing customer segments in diverse markets throughout Asia-Pacific.
This experience has given me a unique perspective on Malaysia’s consumer landscape, where rapidly evolving demographics and multicultural richness make customer segmentation both a challenge and an opportunity.
Applying this lens, I’ve observed distinct groups within Malaysia that drive economic growth alongside those whose voices are often muted or marginalised. This article dives into both ends of the spectrum, highlighting high-growth consumer segments, as well as the underserved communities that deserve greater inclusion in Malaysia’s growth story.
Part I: Malaysia’s Core Consumer Segments
Understanding Malaysia’s core segments offers a powerful framework for brand strategies aiming to capture high-growth areas. Here’s a breakdown of some key segments, with insights into their size, spending power, leading brands, and actionable recommendations for market success.
1. Malay/Muslim Segment
- Size and Dollar Value: Representing approximately 60% of the population (~20 million people), with an estimated annual expenditure of USD 70 billion.
- Per Capita Spending: Approximately USD 3,500 annually.
- Top Brands: Nestlé: A leader in halal-certified foods, trusted by the Malay community. Wardah: A top halal cosmetics brand, appealing to beauty-conscious, modest consumers.
- Strategic Recommendations: Align with Islamic values, secure halal certification, and leverage culturally relevant campaigns, especially around peak spending periods like Ramadan. Collaborate with local influencers to enhance brand credibility.
2. Chinese Segment
- Size and Dollar Value: Constituting about 25% of the population (~8.3 million people), this segment spends around USD 50 billion annually.
- Per Capita Spending: Approximately USD 6,000 annually.
- Top Brands: Apple: A favourite for premium tech, valued for quality and status. Astro: Engages the Chinese community with Cantonese and Mandarin media content.
- Strategic Recommendations: Emphasise quality and exclusivity. Use Mandarin/Cantonese in marketing, and consider loyalty programs. Digital-first approaches, like targeted ads on social platforms, can help capture and retain this audience.
3. Indian Segment
- Size and Dollar Value: This community, about 7% of the population (~2.3 million people), has an annual spend of USD 10 billion, largely in education and health.
- Per Capita Spending: Approximately USD 4,350 annually.
- Top Brands: Unilever: Known for haircare products that resonate with Indian cultural needs. Fair & Lovely: Popular in skincare due to its appeal to traditional beauty standards.
- Strategic Recommendations: Engage with culturally specific campaigns, especially around Deepavali. Personalise offerings to reflect heritage values, and build partnerships with community organisations to establish trust.
4. Youth Segment
- Size and Dollar Value: Constituting around 40% of the population (~13.3 million people) with a spending power of USD 20 billion.
- Per Capita Spending: Approximately USD 1,500 annually.
- Top Brands: Shopee: Known for its gamified shopping experience and youth-friendly promotions. McDonald’s: Customises menu options and seasonal promotions appealing to youth.
- Strategic Recommendations: Embrace social media trends, user-generated content, and influencer collaborations. Seasonal campaigns tied to cultural events or product launches attract this highly social demographic.
5. Middle-Class Urban Segment
- Size and Dollar Value: Around 25% of the population (~8.3 million people), contributing USD 45 billion in annual consumer spending.
- Per Capita Spending: Approximately USD 5,400 annually.
- Top Brands: Grab: A leader in convenience with ride-hailing, food delivery, and payment services. Samsung: Known for reliable, high-quality appliances suited for middle-class homes.
- Strategic Recommendations: Position products as time-saving, quality-enhancing, and family-oriented. Highlight product reliability and consider loyalty programs or subscriptions to reinforce brand loyalty.
6. Rural Segment
- Size and Dollar Value: Covering about 40% of the population (~13.3 million people), with USD 15 billion in annual consumer spend.
- Per Capita Spending: Approximately USD 1,125 annually.
- Top Brands: Milo (Nestlé): A household staple, particularly in remote areas. Petronas: Connects with rural consumers through accessible locations and outreach.
- Strategic Recommendations: Prioritise affordability, consistency, and traditional retail channels. Engage in community events or sponsorships to strengthen brand trust in rural areas.
Part II: Malaysia’s Forgotten Segments – The Poor and Underserved
While much attention is given to high-growth segments, Malaysia’s underserved communities deserve a place in the narrative.
These groups, often excluded from mainstream economic growth, represent billions in untapped potential and present opportunities for brands to drive social good alongside financial success.
1. Unbanked and Underbanked Populations
- Size and Dollar Value: Around 15% of Malaysia’s adults are unbanked, and 40% are underbanked, limiting their access to formal financial services and representing untapped economic potential.
- Top Brands: Boost: Offers cashless transactions to unbanked consumers, facilitating financial inclusion. Bank Negara’s e-KYC Initiatives: Simplifies account setup for unbanked communities.
- Why They Matter: Bridging the financial gap for these populations enables access to essential services and supports economic stability, reducing inequalities.
2. Micro, Small, and Medium Enterprises (MSMEs)
- Size and Dollar Value: MSMEs constitute 98% of businesses, facing a financing gap of around USD 21.5 billion.
- Top Brands: Funding Societies: A peer-to-peer lending platform providing affordable loans to MSMEs. Bank Islam’s SME Financing: Offers tailored financing to small business owners.
- Why They Matter: MSMEs are the backbone of Malaysia’s economy, supporting local employment and driving regional economic resilience.
3. B40 Group (Bottom 40% Income Group)
- Size and Dollar Value: This group represents nearly 12.8 million Malaysians, with limited disposable income, primarily spent on necessities. According to the Department of Statistics Malaysia's Household Income Survey Report 2022, households in the B40 category have monthly incomes below RM5,250 (or USD1,200).
- Top Brands: Nestlé: Provides affordable nutrition options like Maggi and Milo. Khadam Malaysia: A social enterprise offering budget-friendly groceries while employing B40 individuals.
- Why They Matter: Addressing the B40 group’s needs can reduce income inequality, boost quality of life, and improve long-term economic health.
4. Rural and Indigenous Communities
- Size and Dollar Value: Comprising around 40% of Malaysia’s population, these communities face limited access to education, healthcare, and economic opportunities.
- Top Brands: Petronas: Supports rural access to resources like clean water and healthcare. Telekom Malaysia: Expands digital access in rural areas, bridging the digital divide.
- Why They Matter: Rural and indigenous communities are integral to Malaysia’s identity. Expanding access to infrastructure and education improves quality of life and fosters sustainable development.
5. People with Disabilities (PWDs / OKU)
- Size and Dollar Value: Malaysia’s PwD community exceeds 4 million, often excluded from employment and accessible products.
- Top Brands: Dialog Hub by Dialogue in the Dark Malaysia: An experiential centre that offers sensory experiences and workshops led by visually impaired individuals, creating employment opportunities while fostering greater awareness and empathy for PwDs. KFC Malaysia: Inclusive hiring practices to integrate PwDs in the workforce.
- Why They Matter: PwD inclusion enhances diversity and unlocks unique talents, contributing to a more inclusive economy and enriching corporate culture.
Final Thoughts
In my observation, job ads often seek customer segmentation or marketing leaders to target ultra-high-net-worth individuals or other affluent groups.
Yet, we rarely see roles dedicated to understanding and uplifting the underserved—those who are too often left dependent on charities or government aid. It’s time for big corporates—banks, telcos, energy providers, and more—to recognise their role in driving inclusive growth. By championing the economic inclusion of these forgotten segments, they not only fulfil their ESG commitments but also build resilient communities that drive sustainable growth.
The call to action is clear: let’s shift our focus and invest in leaders who can innovate solutions for Malaysia’s underserved communities. Supporting these segments isn’t just a social responsibility; it’s a powerful way to unlock hidden value, deepen brand loyalty, and foster a society where everyone has a chance to thrive.
After all, true progress isn’t about leaving anyone behind. It’s about creating pathways for all Malaysians to be part of a shared, prosperous future.
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Eric Chuah is an experienced marketing and social impact strategist with over 15 years of expertise across product innovation, banking, and social entrepreneurship in the Asia-Pacific region. Known for his ability to connect market insights with purposeful strategies, Eric has a unique perspective on consumer segmentation and economic inclusion. His work empowers brands to go beyond conventional markets, advocating for growth that uplifts all communities. Passionate about creating meaningful impact, Eric regularly shares thought-provoking insights on LinkedIn, exploring the intersection of business, social good, and innovation.
