The ecommerce market of Malaysia has become one of the largest in Southeast Asia as it outgrows the region’s traditional market. It was proven with a 39 percent value growth in 2019 before the pandemic hits. The ecommerce growth is combined with consumers’ online shopping and customized payment option preferences in recent years.
It all started with the launch of eBay in 2004 followed by Lelong.com that attracted more than 9 million visitors per month. The Malaysian ecommerce market took shape when Lazada and Zalora launched their Malaysian operations and followed by Shopee later on. Worth US$ 4.3 billion in 2020, the Malaysian ecommerce market is expected to double up to $8.1 billion by the year 2024. Now Malaysia is slowly evolving by focusing on its infrastructure like product availability, payments, delivery and others to be more in line as an established online shopping market.
Factors Stimulating the Ecommerce Growth in Malaysia
Malaysia also has one of the highest internet penetration rates in south-east Asia. Ecommerce growth in Malaysia is mainly driven by the growing number of digitally-savvy, middle-class people who look for great deals and access to international brands. Here are some major factors that drive ecommerce growth in the region.
- Social Distancing and COVID-19 Restrictions
- Seamless Delivery Logistics
- Surge in Online Grocery Shopping
- Digitally-savvy consumers
- The Rise in Social Media
- Preference for Digital Payments
- Government Assistance
Malaysian ecommerce share many similarities with other emerging markets in neighboring countries like Singapore, Indonesia & Thailand. To take note, there are a few interesting cultural and region-specific differences to watch out for.
- Transactions Across Borders
- Mobile-First Audience
- Affinity towards discounts
- Ease of Digital Payments
- Social Commerce
- Competition Between Regional & International Retailers
- Annual Shopping Events
Malaysia is easily one of the most attractive markets for eCommerce in Southeast Asia given the current population size and increasingly well-off middle class. Below are a few strategies that retailers and brands can take advantage of this opportunity.
- Offer a diverse product range
- Provide a wide range of payment options
- Offer superior fulfilment experience
- Understand local nuances
While Malaysia’s ecommerce market is still developing compared to mature markets like China and Japan, it’s still one of the largest ecommerce markets in Southeast Asia. Malaysia stands out because of its size in the cross-border share of the ecommerce market. Malaysia’s youth population highlights its economy’s future potential as an e-commerce market. Malaysian consumers are often looking for great deals and access to international brands, but it may change if more local brands prioritize giving out better customer experiences, products and prices than those of rival international brands.