Consumer Spending Stabilised A Month After GST, Says BBDO

By Siti Radziah Hamzah KUALA LUMPUR, July 22 (Bernama) -- Consumer spending somewhat stabilised a month after the Goods and Services Tax (GST) was introduced on April 1 in Malaysia and is expected to further improve over the next six months, said BBDO (Malaysia) Sdn Bhd. Chief Innovation and Strategy Officer Anirban Ganguly said consumers had adjusted their spending accordingly after the GST implementation. "There was a lot of frontloading at end-March on anticipation that goods and services would be more expensive after April 1. But, consumers have been adapting well thereafter," he told Bernama. BBDO, an advertising and marketing company, conducted a study on the GST between March and April to gauge consumers' behaviour pre and post-GST implementation. About 100 respondents comprising the public and businesses, were involved in the survey. Anirban said 60 per cent of respondents were middle income earners. The survey identified two broad categories of spenders in Malaysia’s new economic reality. The first, maintain their lifestyle with some compromise, and the second, comprise those who drastically cut or stop certain purchases outright. According to the survey, Malaysians are cutting down on what they can, to save for what is worthwhile. The survey found that as many as 62 per cent of respondents would cut down on eating out and 48 per cent buying less clothes, with 36 per cent foregoing vacations and 33 per cent, cosmetics. "Consumers are willing to compromise spends on everyday items, but are less willing to cut categories that are 'worthwhile', such as travel or personal care," Anirban said He stressed the need for brands to hone their strengths and eliminate weaknesses to demonstrate product or services value beyond pricing. "Companies will continue to invest and give value for consumers as at the end of the day, they want them to become loyal customers," said Anirban. Asked if BBDO would conduct a follow-up study on the spending pattern post-GST, he said: "We will conduct such a study in four to five months and likely in September or October." --BERNAMA