Malaysians embrace underconsumption trend: What does it mean for brands?

A new consumer trend is gaining momentum in Malaysia, particularly among the younger generation – underconsumption core. This trend, popularised on platforms such as TikTok, focuses on living with less and maximising the utility of existing products. It represents a shift from the impulse shopping culture that has dominated for years, encouraging consumers to break away from unnecessary purchases and make more mindful choices.

Underconsumption emphasised the increasing awareness of consumerism. It highlights the importance of valuing what one already owns rather than constantly seeking new purchases. This movement resonates with those who have grown weary of overindulgence, seeing it as a corrective measure rather than a novel idea.

What’s fueling the trend?

• Rising cost of living: As living expenses rise, more consumers are reassessing their spending habits. According to the 2024 Euromonitor voice of consumer lifestyle survey, 50% of respondents plan to save more, while 30% aim to reduce overall spending. Categories such as clothing, footwear, and new technology have seen significant reductions in spending as consumers prioritise health and wellness instead.
• Reaction to influencer culture: The underconsumption trend also serves as a countermovement to the influencer-driven culture of overconsumption. Many consumers are becoming increasingly aware that products showcased by influencers are often not genuinely used or purchased by them, leading to growing discontent and a desire for authenticity.

How TikTokers are embracing underconsumption

The trend manifests in various ways on social media platforms, particularly TikTok:

• Reusing and repurposing: Consumers are getting creative with their possessions, sharing tutorials on upcycling old or thrifted clothes into fashionable, trendy outfits.
• Thrift shopping: Buying pre-loved or second-hand items is becoming increasingly popular, especially among Gen Z, who are showing a strong preference for conscious shopping.
• Practical purchases: There’s a growing emphasis on affordable, high-quality basics, such as durable workout clothing or versatile cookware, that prioritise long-term value over impulsive buys.
• Maximising usage: Consumers are striving to extend the lifespan of their belongings, such as mending shoes instead of buying new ones or finishing products before purchasing replacements.

Underconsumption core gaining ground in Malaysia

According to Euromonitor voice of the consumer lifestyle survey Jan-Feb 2024, the underconsumption trend is catching on with Malaysian consumers. The survey found that 41% of Malaysians try to lead a minimalist lifestyle and do not buy unnecessary items, which is above the global average.

Additionally, more than 60% have engaged in sharing or swapping items or services, and up to 80% have purchased used or second-hand items before, with these behaviours being particularly prominent among Gen Z.

Repairing items instead of purchasing new ones is no longer just a stereotype associated with Gen X or Baby Boomers, but is also highly valued by Gen Z, who show a strong preference for purpose-driven brands and companies.

Impact on companies and brands

The rise of underconsumption has significant implications for brands and marketers. Purpose-driven brands are particularly well-aligned with this trend, resonating strongly with consumers who prioritise long-term value.

For example, Uniqlo’s RE.UNIQLO Studio promotes repair, remake, reuse, and recycle by fixing damaged clothes, transforming old items, collecting clothes for donation, and using unwearable garments as raw materials. Similarly, H&M’s ‘pre-loved’ concept in London supports a circular fashion industry by offering second-hand garments from various brands, rental services, and collecting unwanted clothes for re-wearing, reuse, or recycling. Another example is Nike’s global recycling program, Nike Grind which turns shoe scraps into practical necessities, safety tools, walkways, playground, etc.

Local startups that resonate with the trend can be seen from the expanding used car market, flourishing second-hand electronics platforms, growing electronics repair services, and rising popularity of pre-owned fashion, for example:

• Carsome: This online used car platform has attracted 339K Facebook followers and over 700K monthly unique visitors to its website.
• CompAsia: Specialising in refurbished electronic devices, CompAsia’s platform draws 33K unique visitors per month and has 57.9K Instagram followers.
• Secondlifeasia: A smart device repair company with 35 outlets nationwide achieved remarkable growth of 424% year-on-year and is expecting to hit an annual revenue of RM7 million in 2024.

In the pre-loved fashion sector, brands such as Refash (34K Instagram followers) and various thrift stores are gaining popularity, with significant Instagram followings, appealing primarily to consumers aged 16–34. Even the gaming sector is embracing this trend, with businesses such as Merhaen Gamers, which specialises in selling second-hand video games and consoles, having 7.1K Facebook followers. The pre-owned luxury goods market, valued at RM4 billion, continues to grow as consumers seek affordable and cost-effective options.

Brands seeking to align with the underconsumption trend must prioritise value-driven marketing that focuses on cost-effectiveness, durability, and long-term savings to appeal to these consumers. Highlighting essentials in their messaging – such as practicality, necessity, and functionality – can help resonate with consumers’ core needs. In addition, offering services that encourage product longevity, such as repair, upcycling, or customisation options that help customers extend the life of their purchases.

Building communities around mindful and intentional living can also foster stronger consumer relationship. In this context, it is essential to collaborate with influencers who genuinely believe in the brand's purpose and align with the trend.

Underconsumption trend is a significant shift in consumer behavior towards greater mindfulness, which is catching on with Malaysian consumers. As awareness of the impacts of consumerism grows, brands must adapt by prioritising value and authenticity in their offerings. By embracing this movement, companies can foster deeper connections with consumers who are increasingly seeking mindful, intentional choices.

The article was written by KerHarn Lim, Research & Insights, Publicis.