Education centre Arus Academy government relations and lead coordinator, Said Farid Zainudin states that trading down also helps people become financial literate.
"According to a 2020 Bank Negara Malaysia poll, people with more financial literacy typically choose more economical items whenever possible," he says.
Being financially sound demonstrates an individuals understanding of how to efficiently stretch their funds. This, when practised by large groups of people could also help the nation beat the effects of inflation.
"According to the Malaysian Department of Statistics, there is a rise in consumers purchasing more private-label and local goods in 2022," Said says.
Such change demonstrates how Malaysian consumers are able to maintain their purchasing power by modifying their shopping patterns in response to price increases.
A former business consultant Rachel Weber used to advise business clients make informed decision of their finances.
"From a professional point of view, I think the trading down lifestyle reflects consumers' desire for affordability," she says. "Inflation and rising cost of living has made consumers more conscious of their spending."
Because of these issues, consumers are now seeking ways to cut their expenses while maintaining a comfortable lifestyle.
Besides that, growing awareness of environmental issues – resource depletion, unethical retail production and pollution – has further motivated individuals to prioritise sustainability over consumerism.
"Many today are trading down by opting for thrift store finds or eco-friendly brands that place importance in endurable materials and ethical production," she continues.
"Trading down is not a difficult practice to follow as de-cluttering and budgeting are some of the baby steps people can take to save time and reduce monetary waste," she adds.
"Delayed gratification is also a good way to deter impulse spending... this approach allows people to place themselves in a better financial position in the long run."
However, although trading down has its advantages like less financial strain and increased financial stability, Said says there are also some disadvantages to the practice as well.
"Some customers have voiced worries regarding the quality of products that are less expensive, even though they value savings," he says.
"People may become less loyal to a brand as a result of this discontent since they will begin to consider price over quality when making decisions on purchasing products."
Despite that, it has been proven that those who trade down and follow other low consumption lifestyle practices show a significant improvement in their financial health.
In a 2020 research published in the Asian Journal of Business and Management, Malaysian consumers who repeatedly looked for bargain solutions reported having an improved financial health.
"More savings and improved financial security can result from these practices," it says.
Lim adds that being frugal has always been hardwired into the human brain.
"After the Covid-19 pandemic and the economic turmoil that came with it, it made many of us realise the importance of being prudent with our spending," he says.
"This is why trading down has become a growing habit. In the long run, it is about spending as less as possible."
