Study: Local MY brands thrive amid consumer-led brand boycotts

In the wake of the Israel-Hamas conflict, over half (52%) of the Malaysians had boycotted brands that they believed were doing business with Israel, with over 60% of the brand-boycotters opting for local brands, according to a study by consultancy Ampersand Advisory and research company InsightzClub.

Ampersand Advisory and InsightzClub carried out an online survey in March this year, interviewing 200 respondents that represent Malaysia's geographic, demographic and cultural diversity. They were located in Selangor, Kuala Lumpur, Penang, Sabah, Putrajaya, Sarawak and Johor Bahru with an equal proportion of male and female, and proportionate representation of the Malay, Chinese and Indian population. 

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The "Dealing with brand boycotts" report noted that this 52% cut ties with brands associated with Israel intentionally, with a majority of the brand-boycotters (91%) stopping buying and using products from the brand as a way of protest. Nearly a third (31%) shared posts encouraging boycotts through social media, while a fifth (19%) had decided to create their own social media posts to express their boycotts. 

As the study found that the mode of protest was a mix of physical boycotting and online advocacy, 25% of respondents shared that they also responded to social media posts which asked for boycotts while 8% physically participated in rallies or demonstrations (8%). 

The boycotts primarily stem from Malaysia's majority-Muslim population expressing solidarity with Palestinians amid ongoing Middle East conflicts, the study found. 

Catalysts of brand boycotts

However, today’s consumers have many more options that cater to changes in sentiment, taste and purchasing power, and local businesses have been quick to capitalise on this shift in consumer behaviour. Home-grown coffee chains and eateries have seen increased patronage as Malaysians seek alternatives to the brands they are boycotting.

As such, 71% of the study's respondents are now buying more from local coffee and restaurant chains. This includes brands such as ZUS Coffee, Tealive, Old Town White Coffee, Gigi and Bask Bear. Meanwhile, 70% opted for coffee and beverage chains from other countries including Kenangan Coffee and Chagee. 62% of the brand-boycotters chose to go for local restaurants and fast-food outlets such as Texas Chicken, while 58% picked local chocolate brands such as Beryl's.

Additionally, the study also noted that even as they boycott brands, 42% of consumers were aware that their actions hurt local employees of these companies the most, when asked who they thought were the most impacted by brand boycotts. 

The survey also showed that 24% of Malaysian respondents were aware that their actions hurt the local operations or franchise and distributors of the foreign brands, while 18% felt their actions hurt the parent company of the brand located overseas. 

In a way, their embrace of local brands – contributing to their rapid growth – comes with an expectation that these employees will easily find employment in the said local companies, the report stated. 

Moving forward

Looking ahead, the "Dealing with brand boycotts" study revealed that Malaysian consumers are extremely conscious about brand behaviour, and will scrutinise that from various perspectives, such as religious and cultural sensitivity (63%), poor behaviour of influencers or endorsers of the brand (60%), health (59%), bad labour practices (53%), trade practices (44%), and racism (59%).

This makes local brands as open to scrutiny as international brands, Ampersand and InsightClubz said. "Going forward, we believe that navigating the complexity of boycotts and fostering brand resilience requires action on several fronts. As global dynamics evolve, businesses operating in Malaysia must remain attuned to local sentiments and adapt accordingly to maintain their standing in the market," said the study.

The affected brands could highlight the contributions they have made to the local economy and society, or highlight their halal offerings and the fact that they employ local workers in large numbers. The report also added, that these brands should intensify their social media monitoring, while local brands or brands from Indonesia and China should leverage the golden opportunity to push their cultural value and relevance. 

“We did this research to see how prevalent the boycott was, even if the Israel-Gaza conflict seems to be getting lesser headlines nowadays. Clearly, the issue is still looming large in the minds of many, and brands need to be sensitive and work hard to overcome this sentiment," said Sandeep Joseph, CEO and co-founder of Ampersand Advisory.

"Perhaps more worrying, for the brands being boycotted, is the fact that once consumers get into the habit of not using a brand for a year or more, will they ever go back to that brand? From our survey, at least, it seems unlikely that they will. At the same time, this creates more opportunity for local brands to flourish," he added. 

Meanwhile, Mritunjay Kumar, CEO of InsightzClub said that for many Malaysians, the boycott is most powerful at the checkout counter, with 9 in 10 choosing to protest through their wallets rather than on the streets. "While physical activism is limited, online sharing and conversations show a growing preference for digital solidarity and consumer-driven change."

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