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Ramadan Online Shopping Trends

· ShopBack Insights
What is Ramadan?

Today marks the start of Ramadan in Malaysia and Indonesia. It is the most sacred month of the year for Muslims. During Ramadan, Muslims practise fasting from dawn to sunset. Eid al-Fitr marks the end of Ramadan and signals the start of the three-day celebrations filled with prayers, feasting and visitations.

Why is Ramadan a significant ecommerce season in Malaysia and Indonesia?

Approximately 60% of Malaysia’s population and over 87% of Indonesia’s population are Muslims. That amounts to an addressable market size of over 245M people who will be observing Ramadan, which sees a temporary lifestyle change revolving around fasting.

Currently, there are over 15M Malaysians and over 80M Indonesians who are active online shoppers. The number can only increase in the next few years as tech-savvy millennials and tech native Generation Z gain spending power.

The adjustments in daily routine during Ramadan as well as preparation for the revelry post-Ramadan bring about uplifts to Muslims’ purchase and consumption level.

At ShopBack, we did a comparison of our customers’ online shopping behaviour a month before and during Ramadan 2017. The strong uplift in both countries presents a clear case of Ramadan being a significant ecommerce season in Malaysia and Indonesia.

When is Ramadan?

The dates of Ramadan change every year based on the phases of the moon. It moves backward by about 11 days each year. This year, Ramadan begins on 17 May 2018 and ends on 14 June 2018.

In this article, ShopBack, the one-stop lifestyle portal that powers smarter purchase decisions, will delve into 2017 data* to uncover Ramadan online shopping trends in Malaysia and Indonesia.

*Data extracted from records of two major cities in both countries: Jakarta, Indonesia and Kuala Lumpur, Malaysia

What time do Malaysians and Indonesians shop online during Ramadan?

*Local time displayed.

In Indonesia, two spikes in site and app traffic are observed. The first spike takes place from 10.00AM to 11.00AM. This spike is noted as a constant even during non-Ramadan period.

 

However, the second spike from 4.00PM to 5.00PM is an isolated event during Ramadan in 2017. It accounts for an average increase of around 50% and becomes more pronounced in the last two weeks of Ramadan. ShopBack Indonesia postulates that the uplift in traffic is due to the anticipation of breaking the fast at sunset.

In Malaysia, the uplift in traffic is from 2.00PM to 4.00PM. This remains unchanged from non-Ramadan period, except for the slight increase of 10-15% in volume.

Both countries did not observe any changes in weekend traffic during Ramadan in 2017.

Note to marketers: It is always worthwhile to invest in marketing during working hours in Indonesia and Malaysia.

ShopBack’s data reveals a trough with significantly lower traffic during the 6.00PM to 7.00PM in Indonesia and 7.00PM to 8.00PM in Malaysia.

The drastic fall in daily online shopping activity is due to iftar, when Muslims break the fast on the first sighting of the new moon. Fasting ended at 5.44PM in Indonesia and 7.19PM in Malaysia in 2017.

Traffic picked up the hour after iftar, with Malaysia displaying a more significant uplift of around 40% as compared to Indonesia.

This year, fasting ends at 5.47PM in Indonesia and 7.18PM in Malaysia. ShopBack predicts that the dip in traffic will occur during the same window of time as observed last year.

Note to marketers: Reach out to Malaysians and Indonesians when they are online; Cut down on marketing efforts when they are offline.

When and what do Malaysians and Indonesians buy during Ramadan?

*Percentage uplift in orders compared to the month before Ramadan.

Five noteworthy observations:

1. First week of Ramadan saw an overall uplift across all verticals

Note to marketers: Kickstart your campaign on a strong note with store-wide promotions to encourage purchase behaviour.

2. Overall category winners for both countries: Fashion and Health & Beauty

3. Indonesians are more inclined to take up last-minute Ramadan shopping as compared to Malaysians, with the highest uplift exhibited in the 3rd week of Ramadan

Note to marketers: Create a sense of urgency to buy with scarcity marketing, flash sales and more that leverage last-minute purchase behaviour.

4. Toys & Games was the best performing category in the last week of Ramadan only in Indonesia

5. Electronics (cameras, mobile and tablets) did exceedingly well for both countries in the last two weeks of Ramadan

Note to marketers:

  • Marketers who do not deal in these top performing categories can consider striking partnerships with brands that serve these categories for further boost in Ramadan sales.
  • Marketers can also engage one-stop lifestyle platforms like ShopBack which deals in all categories to leverage cross-category pushes. 

Interesting finding: The groceries category experienced 7% decline in Malaysia and 81% climb in Indonesia last Ramadan!

How much do Malaysians and Indonesians spend online during Ramadan and what platforms do they shop on?

Note to marketers:

  • Ramadan provides a golden opportunity to attract new customers and encourage existing customers to use your service more frequently.
  • If you have limited resources for marketing boost, choose to concentrate firepower on the single platform that matters to the specific market.
What are ShopBack's predictions for Ramadan 2018?
  • 100% growth in orders for both Malaysia and Indonesia

This is very much related to the increasing population of tech-savvy millennials and tech native Generation Z in both countries. In a recent report by Frost & Sullivan, the global research and consulting organisation found positive quarter-on-quarter growth of over 20% in Southeast Asia's online retail market, with especially pronounced growth in Indonesia.

  • Newcomers for top categories: Travel and Pulsa

Travel (particularly domestic travel) will be an exciting contender for the top categories in Malaysia this year. More people are aware that they can book a bus ticket from BusOnlineTicket and flights from Traveloka, topped with Cashback from ShopBack.

Indonesians tend to be more cost-conscious about their phone bills during Ramadan as they spend more on calls to connect with their families. Getting pulsa (mobile reloads) online is more convenient and also cheaper than reloading through mobile banking or offline channels.

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