What Malaysians Want to Eat
Consumer reliance on food service favours more than just local cuisine, new research shows
There’s a strong case to be made for Malaysia as a hot prospect for international restaurant brands looking for overseas growth. With increasing affluence, use of English in business, a population that’s young and urban, wide acceptance of foreign chains, and heavy reliance on food service, Malaysia has become the target for many global restaurant operators.
These are some of the findings Technomic uncovered in its recent report on Malaysia’s food services industry, which combines operator and consumer data with expansion developments and economic indicators to form a comprehensive view of the country.
How can a country’s residents thread the needle between multiculturalism and a cohesive cultural identity? One way is through their choices in foods and restaurants.
Malaysia is home to 32 million people spread across the Malaysian peninsula and northern Borneo. Ethnic Malay represent about half the population. Others include overseas Chinese and Indians, smaller indigenous populations and millions of immigrant workers. Six out of 10 Malaysians are Muslim, making halal important to the food and beverage industry here.
The nation is also young. More than half of the country’s residents are under 30, seven out of 10 are city dwellers, and incomes are fairly high, with yearly per-person GDP is about $29,000 in purchasing power parity, per the CIA World Factbook.
As one might expect, dining out of home is a big part of daily life in Malaysia. Data shows yearly revenue for food services of US$19 billion, including US$16 billion in commercial restaurant sales and an impressive 8.7 per cent annual growth rate for the sector.
Where Consumers Go to Eat
Malaysians eat out at a notably higher rate than citizens of other countries—87 per cent dine out at least weekly, compared to 74 per cent globally. They choose foods from a wide variety of inexpensive venues, including the country’s famed street stalls as well as from fast food, cafes and other convenience outlets.
Residents also routinely use foodservice throughout the day. Consumers report sourcing half of all breakfasts, 57 per cent of their lunches, 40 per cent of dinners and two-thirds of their snacks from restaurants or foodservice.
That’s far above global averages for each dining occasion.
Simply put, Malaysians are heavily reliant of restaurants and food away from home, especially compared to their counterparts around the world.
What Diners Fancy at Restaurants
So what kinds of foods do Malaysians want from restaurants? Some of the same familiar favourites as found in other countries around the world—those being pizza, chicken and burgers. The data shows that these items are far and away Malaysians’ favourite foods to order at restaurants.
Beverages are also a popular item to order at restaurants, whether it’s from a homegrown brand like OldTown White Coffee or from an American brand like Starbucks. Consumer data shows that many types of refreshing drinks are more popular orders in Malaysia than in other countries. Fruit juices, teas and coffees are all more popular with the Malaysian public than with the average consumers on average outside the country.
While Malaysian and American cuisines are popular with the dining public, locals are also highly accepting of other Asian fare. And it’s worth noting that 57 per cent of Malaysians prefer very spicy foods, compared to just 38 per cent of consumers worldwide on average.
Malaysia’s Chain Environment
American fast food dominates in Malaysia, but homegrown brands also play a large role in food services. According to data, among Malaysia’s top 25 restaurant chains, KFC and Pizza Hut lead the pack as the top two brands, with McDonald’s, Starbucks and Subway all in the top 10.The largest Malaysian chains are Secret Recipe, a table-service chain, with about 300 units, and the 270-unit beverage-kiosk chain CoolBlog.
Of the top 25 chains, fully 14 are Malaysian, 10 are American and only one, South Africa’s Nando’s, hails from another country. Twenty are quick service and just five—all Malaysian—are full service.
It’s important to note that these leading chains represent just a small part of the Malaysian food scene. The total unit count for all 25top chains is under 3,900, representing just 2.5 per cent of the nation’s approximately 155,000 restaurant outlets.
That’s a strong signal that there’s plenty of room left for chain penetration of the Malaysian market. And operators are taking note.
Challenging the dominance of Malaysian and American brands among top players in the Malaysian restaurant scene, concepts from other countries are now moving aggressively to gain market share in the emerging nation.
Indian casual-dining chain Barbeque Nation is moving into Malaysia as well as other Southeast Asian nations. Sandwich-maker Isaac Toast and chicken specialist NeNe Chicken, both of South Korea, have also opened their first Malaysia units. And the UK’s Costa Coffee—now owned by Coca-Cola—has also recently inked a master franchise deal to grown further in the market.
These companies are betting that Malaysia is ripe for chain development.
Players looking to make a splash in the Malaysian market should always consider the existing popularity of spicy pan-Asian fare, pizzas and burgers, the dominance of brands specializing in chicken, beverages, sweets and other fast foods, and consumers’ penchant for consuming meals outside the home at all times of day.
Aaron has spent the past 10 years helping Technomic clients and partners better understand the competitive landscape and areas of growth opportunity in the global foodservice industry. He currently contributes content, research and analysis to Technomic’s Global Foodservice Planning Program, a comprehensive program that delivers key insights, strategies and trends for chain operators, manufacturers, distributors and other food service companies.
He also creates custom global research projects and reports that help clients make informed decisions about their businesses.