Deloitte report highlights Malaysia as “Digital Life Leader”

• Report focuses on first ever Digital Life Index of South and Southeast Asia
• M’sia attractive market for e-commerce due to economic growth & advanced digital infra

An extensive survey conducted by Deloitte across age groups in eight countries in South and Southeast Asia showed that consumers aged between 21 and 40 years old are the leading force enabling the rapid adoption of a digital life in the post Covid-19 world in these two region’s.

Titled "The Next Wave" Emerging Digital Life in South and Southeast Asia, the report is now available in English here, and provides insights into the state of digital life adoption across Singapore, Malaysia, Thailand, Indonesia, the Philippines, India, Bangladesh and Pakistan. Some of the key highlights and takeaways from the report, pertaining to Malaysia as well as the region show some interesting developments.

Leaders in Digital Life

Notably, the report found that Malaysia is among the regional leaders in Digital Life.

Based on the seven indicators of digital life: mobile phone penetration, mobile Internet speed, digital payment maturity, online shopping maturity, social media activity and policy support, Malaysia is a qualified "Digital Life Leader" with its high aggregate payment amount, active social platforms and convenient lifestyle services.

With a population of about 32 million, Malaysia is an attractive market for e-commerce in Southeast Asia due to its economic growth and advanced digital technology infrastructure. The contribution of e-commerce to Malaysia's gross domestic product (GDP) has grown steadily, reaching about US$28 billion (RM116 billion) in 2018.

According to data, Malaysia’s digital payment pioneer, Touch ’n Go, covers the highest number of users for its e-wallet application (82.41%), followed by Boost (66.68%). In February, Malaysia became the second country to support subway payment and entrance via QR code after Touch N’ Go joined the DuitNow system.

The report also pointed to Malaysia as having the highest social media penetration. As of January 2020, about 81% of the Malaysian population are active social media users, up by about a third from 2016. The study found that Facebook is the most popular social media platform among Malaysian users as of 2020, followed by Instagram, Facebook Messenger and LinkedIn.

The country also has the second highest penetration rate of smartphones (83%) after Singapore (87%). Overall, about 80% of Malaysia’s population are active Internet users, and mobile phone use is likewise relatively high.

Regional Digital Life Index in region

Like Malaysia, neighbouring Singapore and Indonesia are ranked as “Digital Life Leaders”, whereas Thailand and the Philippines are noted as “Digital Life Followers:

• Singapore: The country ranks as the “Digital Life Leader” in the digital economy, driven by strong government support, broad public participation and good infrastructure.
• Indonesia: The country stands out with the richness in its digital life, where digital payment covers almost every daily life scenario. Its online shopping coverage has also experienced exponential growth, and the number of online shoppers is expected to double in coming years.
• Thailand: Despite being ranked as a “Digital Life Follower”, Thailand has some of the best digital economy development prospects in Southeast Asia. Its relatively high per capita income has led to high mobile phone penetration, bringing digital life to majority of citizens. Whether it is social media, e-commerce, offline payment or game recharging, Thai people have a high degree of acceptance and enthusiasm for the digital economy.
• Philippines: Another “Digital Life Follower”, mobile penetration in the Philippines has potential to improve but the country showed strong advantages digital payment adoption, especially peer-to-peer transfers and gaming industry.

Digital Services Support a Greater Breadth & Depth of Daily Activities

Since the outbreak of Covid-19, 78% of the respondents in South and Southeast Asia indicated that they have increased their use of digital services. The top three most common daily life scenarios where consumers in the region choose to use digital payment are e-commerce/m-commerce (70%), peer-to-peer transfer (69%), and in-store purchase (62%).

The report also found that consumers’ top three reasons for opting to use e-wallets are: convenience (77%), contactless (69%), as well as value-added benefits and promotions (9%).

Across all countries surveyed, entertainment apps were among the top five most popular mobile apps among consumers, namely social media apps at 79%. E-commerce/m-commerce apps as well as daily life services apps (mainly ride-hailing, news and books, and workplace collaboration apps) also saw significant use at 74% and 59% respectively. This is followed by music/streaming apps (50%), and lastly financial services apps (45%) particularly for mobile banking and digital payment.

The report was originally launched by Deloitte in September at the INCLUSION Fintech Conference in Shanghai, organized by Ant Group and Alipay. It is produced by Deloitte in partnership with the INCLUSION Fintech Conference.