Shopper Digest: Boycott - Game over?

If you work in the FMCG categories today, we are sure the topic at the forefront of your mind is the boycott of brands perceived to be supporting Israel. Regardless of where we stand on the issue, this topic has undoubtedly generated conversations, incited strong feelings, and has, in some way or another, impacted our lives either directly or indirectly.

For those of us working on brands that are being boycotted, we know it has led to a large number of Malays reducing their purchases of these brands, followed by a frantic effort by brand owners to regain these lost sales. This sudden exodus of Malays is significant, showcasing the power of collective consumer action (-28% value sales decline).

However, if we look at one such beverage category in Malaysia, although there has been an increase in sales of non-boycotted and local brands, it does not fully compensate for the losses of the boycotted brands. This suggests that Malay boycotters can be categorised into a few groups, although it is difficult to segment and size these groups: 

• Those who have fully stopped purchasing a brand on principle (lapsers; penetration drop)
• Those who remain loyal to a brand (maintained penetration but have significantly reduced volume by shopping less frequently) 

Considering that Malays make up approximately 70% of the Malaysian population, does the boycott signal the end of the road for the boycotted brands? Fortunately, we are beginning to see some glimmers of hope – in the form of convenience. Let’s take a closer look at the aforementioned beverage category.

In the latest periods (up to August 2024), we are already seeing some recovery for Brand X within this beverage category among Malays, but only in two out of the three formats in which they operate – namely, ready-to-drink (RTD) and mixes (all-in-one sachets). However, we do not see a corresponding recovery in the powdered format, despite recent promotional efforts to drive down prices for consumers. With other factors remaining constant, we hypothesise that convenience may be aiding the recovery of Malay sales for Brand X. Supporting this hypothesis is the fact that similar recoveries are being observed among Malay shoppers in other convenience-related categories and formats, such as:

• Portable (cups and bowls) instant noodles vs. regular instant noodle bags
• Frozen foods
• Cooking aids – all-in-one seasoning, MSG, recipe mixes, etc.

In an increasingly modern world, it stands to reason that brands able to leverage consumers’ and shoppers’ time constraints will remain relevant, especially as we move towards a future where human equity sentiments and value continue to play a major role in consumer decisions.

Penetration refers to the percentage of the population purchasing a specific brand over a given period. It is a crucial measure used by key industry players to evaluate the size of their existing customer base (in comparison to competitors) and to assess the potential for expansion. At Worldpanel, we track penetration consistently on a 4-weekly basis, providing a clear trend of performance at both category and brand levels.

Source: P6&8’24 database, Worldpanel Division, Kantar Malaysia