Malaysia is at an exciting period of time, where a major confluence of consumer demand and technological innovation is happening. Specifically, we’re looking at new e-commerce trends over the past year. Partly caused by the pandemic and partly by shifts in customer behaviour, these are what’s shaping how we shop, play, and work.
Let’s look at key figures and explore this emerging phenomenon:
1. More than 26 million Malaysians have access to the internet
As of 2021, Malaysia’s population clocks in at 33 million. This means about 8 out of 10 Malaysians have access to the internet, mostly among the urban and young. This suggests a large population of internet users and consumers that is expected to grow larger in this decade.
2. 80% of users between the ages of 16 and 64 are already shopping online
Young online shoppers in the country are usually quick to flock to the trendiest websites. Similar to trends seen in many other countries, young people are more adaptable to new technology, particularly among millennials and Gen Z. This is why it’s common practice for new online businesses to open their market offerings to these segments first before expanding to other age groups.
3. As of Q4 2020, Malaysia's internet economy rose 6% at MYR45billion Gross Merchandise Volume
Gross Merchandise Volume refers to online sales revenue. Despite the sluggish economy due to the ongoing pandemic in 2020, the country saw an increase of internet economy, according to a report by Google, Temasek & Bain. This trend is similar for many developing countries in Southeast Asia and could suggest a positive outlook for internet business.
4. Malaysia's e-commerce industry is currently valued at USD 4 billion
Our e-commerce industry is one of the highest in ASEAN. Throughout the region, especially Indonesia, Thailand and Vietnam, the e-commerce sector has been growing substantially. Thus, it opens up export opportunities to Malaysian brands who are looking to venture into international markets for the first time.
5. 82% of Malaysian consumers said they bought something online in the past month
A big majority of Malaysians have used the internet for shopping recently. With better internet infrastructure and new ways of working and living, it is now easier to shop online. Popular social media such as Instagram have also been evolving to become more shopping-friendly, encouraging consumers like young Malaysians to click and purchase.
6. 58% of Malaysian have purchased items online using mobile apps
Just 5 years ago, there were only one or two mobile shopping apps available in the country. Today, half of Malaysians have at least one shopping app on their mobile phones. Some of the most popular ones include e-marketplaces such as Lazada, Lelong or Shopee and e-retailers such as IKEA, Tesco, Sephora and Zalora.
7. 46% of Malaysian online payments are done through online banking, followed up by debit cards, e-wallets, and cash payments
Most cashless transactions are made through online banking such as Maybank2U, CIMB Clicks and PBe by Public Bank. This method is seen as easier and more secure. However, an increasing number of people are paying with debit cards and e-wallets.
8. e-Wallet usage is forecasted to grow at a Compound Annual Growth Rate of 53% in 2021, with most users being under 45 years old
E-wallets like TnG, Grab Pay, Boost and WeChat Pay have grown more common in usage in Malaysia. Younger users who are digitally-savvy are seen as early adopters of this new method of payment. It’s not uncommon to see sellers and even hawkers flashing the QR code option to get paid. It is that ubiquitous nowadays.
9. Many 45-54-year-old Malaysian shoppers still prefer Cash-On-Delivery when shopping online
Debit cards and online banking should be your go-to payment options when setting up a payment gateway for your e-commerce website. However, it’s still helpful to include cash payment options where possible, especially if your target customers are older adults. This is why television infomercials such as CJ Wow Shop are very popular among this age group, as it uses their main media channel (television) while offering COD payment options.
10. Since the COVID-19 pandemic, e-Commerce adoption among SMEs has increased by 300%
It’s little wonder that online adaptation has exponentially increased since 2020 due to social distancing and movement restrictions. This has been the biggest push factor for offline businesses to start venturing into cyberspace. And with many e-commerce-enablers that are user and budget-friendly, going digital has never been easier for Malaysian sellers.
11. During the last major online shopping event on 11.11.2020, clothing was the most popular item sold at 43%, followed by fashion accessories and beauty & hygiene products
The most popular item sold during the last 11.11 sale event came from the clothing category. Consumer products remain top sellers across many e-commerce platforms in Malaysia. Businesses in the fashion industry have a lot of room for expansion and growth before they can leverage on the potential the industry has to offer.
12. 40% of e-commerce orders in Malaysia are cross-border orders from American and Chinese websites
This statistic suggests that there could be an area where demand cannot be met by local sellers, explaining the need to purchase items overseas particularly from the States and China. Sites such as Alibaba and Amazon are popular sites worldwide, which might explain the influence on Malaysian consumers. Local sellers can perhaps identify what items are popular among Malaysian buyers in these sites and adapt to market demand.
The vast majority of trends and stats we’ve looked into on the Malaysian e-commerce market showed a very positive outlook in the coming years. Soon, the world could be back to pre-Covid times, but the online shopping trends are here to stay. With higher purchasing power, better IT infrastructure and younger consumers entering the market en masse, the signs for e-commerce adoption have never been clearer. Get started with e-commerce now. Download E-commerce Platform Comparison for Malaysian Business 2021 to see which platform is best for your business.