E-commerce trends in Malaysia are quickly becoming one of the largest in Southeast Asia. it’s growth is outpacing that of traditional established markets in the region. This was apparent even before the impacts of the pandemic, Malaysia’s business-to consumer e-commerce value increased 39 percent in 2019 alone.
This growth in e-commerce has been coupled with the growing consumer preference for online shopping, anda availability of customized payment options in recent years.
Malaysia’s tryst with e-commerce started in 2004 with the launch of online shopping Malaysia eBay Malaysia. This was followed by Lelong.com.my in 2007, a C2C platform that attracts more than 9.56 million visitors per month. The current state of the Malaysian e-commerce market started taking shape in 2012 when two major players Lazada and Zalora launched their Malaysian operation, followed by Shopee in 2015.
Fast forward to 2020, Malaysia’s e-commerce market is worth US$ 4.3 billion, and is expected to double to $8.1 billion by the year of 2024 at 14% CAGR. Malaysia is now catching up to bring it’s e-commerce infrastructure, including product availability, payments, delivery and regulatory requirements, in line with more established online shopping markets.
How Big is the eCommerce Market in Malaysia?
Malaysia is the 40th largest market for eCommerce with a revenue of US$5 billion in 2020, placing it ahead of Iran and behind New Zealand.
With an increase of 49%, the online market Malaysia contributed to the worldwide growth rate of 29% in 2020. Revenues for eCommerce continue to increase. New markets are emerging, and existing markets also have the potential for further development. Global growth will continue over the next few years. This will be propelled by East and Southeast Asia, with their expanding middle class and lagging offline shopping infrastructure.
The eCommerce market includes online sales of physical goods to a private end user (B2C). included in this definition are purchases via computer as well as mobile purchases via smartphones and tablets.
Excluded from the definition of eCommerceDB are the following: digitally distributed services, online stores dedicated to digital media downloads or streams, online stores dedicated to B2B markets, and sales between private individuals (C2C) within the eCommerce markets.
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Top Online Stores
The biggest player in the Malaysian eCommerce Market is apple.com. The store had revenue of US$60 million in 2020. It is followed by zalora.com.my with US$56 million revenue and hihonor.com with US$38 million revenue.
Store rankings are based on every store that generates revenue in Malaysia. This store can either have a national focus and only sell in their main country or operate on a global scale. For this evaluation, only revenue created in Malaysia was considered.
One of the fastest growing stores in the Malaysian market is clarks.my. The store achieved sales of about US$0.9 million in 2020. Its revenue growth amounted to 102% in the previous year.
Market Size and Growth Rate
Market expansion in Malaysia is expected to continue over the next few years, as indicated by the Statista Digital Market Outlook. It has been predicted that the compound annual growth rate (CAGR 20-24) for the next four years will be 19%.
Compared to the year over year growth of 49%, this decrease suggests a moderately flooded market. Another indicator of market saturation is the online penetration of 37% of the Malaysian population who have bought at least one product online in 2020.
Five categories are considered by eCommerceDB. Fashion is the largest segment in Malaysia and accounts for 29% of the eCommerce revenue in Malaysia. This is followed by Electronics and Media with 28%, Toys, Hobby & DIY with 20%, Furniture & Appliances with 13% and Food % Personal Care with the remaining 11%.
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Top Shipping Service Providers
In Malaysia, POS Malaysia is the most frequently offered delivery service provider among online stores. Of those stores that indicate which services they use to transport their goods, 38% cited POS Malaysia as one of the providers. Moreover, GDex and DHL are among the top three shipping services companies offered by online retailers in Malaysia, at rates of 33% and 20%.
Shipping information is based on orders from the store’s main country, which is defined as the one where the store generates most of its online revenue. In this case, it is in Malaysia. Only stores that provide information about their shipping providers can be considered.
What are the Latest Trends in E-Commerce for 2021?
The e-Commerce trends in Malaysia are always changing and this year has been no different. More than ever, merchants are creating and/or improving their eCommerce businesses to meet customers where they are. While it may seem like everything in eCommerce is evolving.
We narrowed it down to the biggest trends that will affect businesses in the coming months and years. So, let’s explore the biggest eCommerce trends.
AR Enhances the Reality of Online Shopping
Augmented Reality (AR) has been a complete game changer for eCommerce. With this type of technology, shoppers can truly see the item they’re shopping for, which helps them make a buying decision. AR really changes the shopping experience in specific industries, such as fashion and home decor because the customers can get a better feel for the item without seeing it in person.
AI Helps Shops Learn About Shoppers
Artificial Intelligence (AI) and machine learning make it possible for the customer to have automated, personalized shopping experiences. AI is continuously collecting data on how a customer shops, when they buy purchases and what they are looking for in a product or a service. It’s a piece of technology that really can’t be replicated in-store.
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Chatbots Improve Shopping Experience
Chatbots interact with online shoppers much like an-in store sales associate would do. Today’s shoppers want to be able to find trending products in Malaysia and buy a product in just a few clicks, and if they can’t, they get frustrated. This is where a chatbot can step in and save the sale. Experts predict that 80% of businesses will be using chatbots in 2021.
More Ways to Pay
Talking about e wallet statistics Malaysia, customers have individual needs when it comes to payment methods, but they might cancel a potential sale if they can’t pay how they want on an eCommerce website. Offering a wide variety of ways to pay is a good way to increase conversion rates on mobile devices. Plus, if customers can save their payment information on your site, they’ll be able to checkout even faster the next time they make a purchase.
Businesses Should Optimize Digital Strategy for Conversion
Getting potential customers to your site is one task but getting them to convert is another. In 2021, businesses are looking to improve their conversion rates by optimizing their product pages. Multi-channel selling is also another way to get conversions, whether through Facebook advertising or shopping ads on Google.
Conclusion
The Malaysian insight remains an attractive market for eCommerce in Southeast Asia, thanks to its dynamic economy, developed enrapture for digital technologies, qualified talent pool and sizeable young population.
The National eCommerce Council (NeCC), comprising various ministries and agencies, was established to drive the implementation of the roadmap towards doubling Malaysia’s eCommerce growth rate.
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