COVID-19 has driven momentum towards the digital economy in Southeast Asia by necessitating rapid adoption of ecommerce, home deliveries, and digital and contactless payments, according to the latest Mastercard Impact Studies.
Even as countries in the region start to ease restrictions and prepare for a “new normal”, the report indicates that some of these trends and habits formed in response to the pandemic are expected to remain for the long-term.
Gathering input from consumers across 10 markets in the Asia Pacific region, the report examines the effects of extraordinary events on attitudes and behaviors among consumers and/or business professionals. The recent results indicate a rise in online shopping in the region, with 40 percent or more of surveyed consumers in Malaysia, the Philippines, Singapore, and Thailand reporting they relied more on home delivery services in April than in March. Meanwhile, nearly half of the consumers surveyed in Malaysia, Singapore, and Thailand reported an increase in their online shopping during the same period.
Alongside these changes in purchasing habits was a region-wide shift in payment methods, with the majority of consumers in all Southeast Asia markets surveyed reporting a significant decrease in cash usage—67 percent in Singapore, 64 percent in Malaysia and the Philippines, and 59 percent in Thailand—since the beginning of the COVID-19 outbreak.
Meanwhile, various contactless payment methods saw their usage increase. In Singapore, 31 percent of respondents reported more use of contactless credit cards to pay, while mobile and digital wallets saw the greatest uptick in use among all contactless payments methods in Malaysia, the Philippines, and Thailand.
With regards to consumer sentiment in the region, up to 83 percent of Filipinos remain cautious about COVID-19 infection, while the figures are 70 percent in Malaysia, 55 percent in Singapore, and 41 percent in Thailand, and there are broad concerns held across the region about how the pandemic is affecting household finances.
The uncertainty has also led to consumers across the region holding off on making big-ticket purchases—80 percent in the Philippines, 75 percent in Malaysia, 74 percent in Thailand, and 65 percent in Singapore—all higher than the APAC average of 59 percent. While concerns about the pandemic continue, there is great confidence among consumers in how the situation is being managed in their respective countries.
For instance, in Singapore 88 percent and 68 percent of respondents respectively felt positive or neutral about how the government and banks are helping them through the crisis. This confidence has led to 20 percent of respondents indicating they believe they will increase their level of investment over the next few months.
“COVID-19 has impacted everyone and every country in some way or another. Many consumers and businesses have been quick to adapt to the digital world and cashless payments in order to stay safe and maintain a sense of normalcy in these extraordinary and uncertain times. Even as organizations and markets prepare for recovery, consumer concerns over their safety and well-being will be at the forefront of any strategy—and this is evident in the way that consumers in Southeast Asia are now shopping and transacting,” said Safdar Khan, Division President, Southeast Asia Emerging Markets, Mastercard.
As a company, Mastercard adopted a drive into digital commerce years before COVID-19 to maximize options and convenience for consumers in how and where they shop and pay—by tapping a card or mobile device on a contactless terminal in a shop, using an e-wallet within a smart phone, making a purchase online or seamlessly transferring money and paying bills. For merchants of all sizes, Mastercard has a range of solutions and services in e-commerce, payments, cybersecurity, fraud protection, data analytics and productivity to help businesses thrive in the changing business environment.