As a result of Malaysia’s internet and mobile connectivity, as well as public sector encouragement, Malaysia has high rates of eCommerce usage. Malaysia boasts 15.3 million online shoppers (50 percent of the population) and 62 percent of mobile users their devices to shop online.
Online shoppers are motivated by price advantages, product range, and availability of reviews. Malaysian shoppers look for free shipping, convenience, and exclusive deals offered by online stores.
Online shopping trends:
5 trends of the Malaysia e-commerce for in 2017:
The Malaysian e-Commerce market is gaining in attention and support from the government. Rising incomes, growing smartphone and internet penetration are all factors that will grow Malaysia’s online market from 0.5 percent of total retail spending in 2014 to five percent by 2020. This makes it an interesting time to assess the state of the market, in terms of government initiatives, consumer trends, and incumbent players.
e-Travel is the largest segment of the online business-to-consumer (B2C) market. The online business-to-consumer segment which includes mobility services (such as Uber, GrabCar and Grab Taxi) and online travel bookings, generated over US$3.5 billion in revenue in 2016.
The online purchase of goods will yield a further US$894 million, with ‘Electronics and Media’ being the most popular category among Malaysian consumers. Finally, e-services, including food delivery services and online dating, among others, will add another US$260 million.
There are over 50 million cards in Malaysia albeit a population size of 30 million. With 8 million cards in circulation, credit cards are by far the most popular payment card in Malaysia. The transaction volume of credit cards vs. debit cards is 4 to 1. The credit card dominance trend is expected to continue up to 2020. This is bolster by aggressive promotion as credit card issuers continue to entice customers with attractive rewards and promotions.
Malaysians' favorite countries for overseas online shopping are the United States, Singapore, UK, China and Hong Kong. Popular online categories include: daily supplies at 39 percent, fashion & accessories at 23 percent, special/rare items at 20 percent, home appliances at 7 percent, consumer electronics at 7 percent and food and health items at 4 percent.
B2B eCommerce is one of the fastest growing sectors for small- and medium size enterprises (SMEs). We are seeing an expansion in eCommerce as more SME take advantage of higher disposal income of the Malaysian population, better broadband service, and the proliferation of mobile devices in the country. eCommerce is helping SMEs, especially small businesses, compete globally by reducing some of the costs which allows the SME to focus on other areas of the business such as product development.
Since the inception of electronic trading or eTrade, there has been 835 SMEs from various sectors such as food and beverages, furniture, lifestyle, building materials, machinery and hardware, and auto parts that have been approved for the eTrade financial incentive. These incentives ranges from RM1,000 to RM7,000. Out of those approved, 641 SMEs have completed their company’s listing on the e-marketplace.
Current challenges for the eCommerce industry include a lack of understanding, limitations of competent personnel to conduct eCommerce activities, fear of cyber security threats, lack of digital marketing skills, limited production capacity, high fulfilment and logistics cost, lack of knowledge regarding market access and regulations in cross-border eCommerce.
The top eCommerce businesses are in consumer goods such as apparel, halal food and beverages, electronic and household items.
The government’s Economic Transformation Program includes an "Entry Point Projects (EPPs)” which is a “Virtual Mall” project. This virtual mall aims to grow the internet-based retail market. The largest virtual mall platforms in Malaysia are ezBuy and Taoboa. Alibaba from China is working with the Malaysian government to increase its presence in Malaysia.
Typically an eCommerce ecosystem is made up of the following components:
The few most popular eCommerce sites that Malaysian visit are:
M-Commerce is growing rapidly in Malaysia. The increase of mobile network operators, the ubiquity of commercial banks offering M-Commerce services and the increase in market size all demonstrate that the M-Commerce sector is growing. However, there are several challenges facing this industry: the level of security, the improvement of technology and the level of consumer satisfaction.
The development of M-Commerce in Malaysia is in line with the growth of mobile network operators. It has grown from three major players to 20 mobile network operators. The three major mobile network providers in Malaysia are Celcom (13.4 million), Maxis (12.4 Million) and Digi (10.9 Million). Overall, total active mobile subscribers in Malaysia are 41,324,700 and the mobile penetration rate is high at about 139 percent. The majority of customers are using prepaid services compared to post-paid services.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.