The pandemic, online shopping, and the shift towards ‘re-commerce’
We live in a digital age where online shopping is more popular than ever. Sitting in the comfort of one’s home and browsing a seemingly endless amount of goods has certainly made our lives easier. Everything’s merely a click away. What’s not to love about that?
The strict movement control orders (MCOs) imposed by the Malaysian government and the self-imposed social distancing practiced by individuals have pushed consumers further towards online channels of commerce.
If it wasn’t part of your normal before, it is now. A US Census Bureau report found that in the second quarter of 2021, an estimated US $222.5 billion was spent in retail e-commerce sales.
The downside of online shopping
While online shopping has its benefits, there’s no denying the drawbacks. Due to closed borders and the emergence of coronavirus variants, many have halted their travel plans and chosen to instead spend their earnings by shopping.
This group of consumers either spends from their savings or through credit cards. And, since their introduction, “Buy now, pay later'” (BNPL) schemes have been encouraging irresponsible overspending.
A study conducted by the Organisation for Economic Co-operation and Development (OECD) on 26 countries, including Malaysia, shows that financial literacy and knowledge of youths aged 18 to 29 is poor, and they exhibit less prudent financial behavior.
According to the Malaysian Finance Minister, 40 percent of millennials (born between 1981 and 1996) are spending beyond their means. Bank Negara Malaysia reported that 47 percent of Malaysian youths (aged 18-29) have high credit card debts. These debts’ common internal factors include retail therapy, overspending on occasions, and a need to be part of the gang.
During the pandemic, an increasingly stressful life caused people to spend more on themselves. Retail therapy is a mood booster when stressed—the