The e-commerce market in Malaysia has experienced rapid growth in the past few years. According to local statistics, Malaysia’s e-commerce revenue exceeded MYR 1 trillion in 2021, a nearly 22% increase from 2020. Malaysia’s digital economy agency also predicts that the local e-commerce market revenue will reach MYR 1.5 trillion by 2025. With the government’s active promotion of online shopping and digital development, the e-commerce market in Malaysia has the potential for sustained growth. Additionally, the cultural similarities and Malaysia’s advantageous geographic location have made it a starting point for many e-commerce businesses looking to expand into other Southeast Asian markets.
1）The government actively promotes e-commerce development and online shopping
The Malaysian government has introduced the “Shop Malaysia Online” campaign, which provides MYR 200 million in funding and distributes electronic vouchers to consumers to accelerate the growth of the local e-commerce industry. Similar to the consumption voucher scheme in Hong Kong, the Malaysian government has partnered with various local e-payment platforms to offer electronic shopping, delivery, and e-wallet rebate vouchers to the public in order to boost the entire e-commerce industry.
In mid-April this year, the Malaysian government launched the ePemula program to promote e-wallet consumption by distributing MYR 300 million in e-cash to eligible youth. The program aims to cultivate the digital financial system and accelerate the formation of the Malaysian e-commerce ecosystem.
Furthermore, Malaysia’s credit industry has been slower to develop compared to other countries, and many consumers still prefer cash transactions. The ePemula program helps to accelerate the adoption of e-wallets by Malaysian customers and businesses. Consumers are increasingly confident in using e-cash through various e-wallet platforms, which has clear benefits for online shopping behaviors in the e-commerce market.
2a）High Internet Penetration Rate
The increasing number of e-commerce users and their online shopping behavior has led to the expansion of the e-commerce market in Malaysia. According to the latest statistics from data analytics company DataReportal, Malaysia’s internet penetration rate was close to 90% at the beginning of 2022. Malaysian consumers are comfortable searching for and purchasing various products online using their mobile phones. With the increasing popularity of e-payment methods and delivery services, the acceptance and usage of the internet has further increased due to the impact of the pandemic. This has led to sustained growth in the performance of the e-commerce industry in Malaysia.
2b）High-income groups have a strong demand for online shopping
According to the “2021 Malaysia E-commerce Report” by Hootsuite, a social media management platform, nearly 90% of individuals aged 35-44 have made online purchases in the past month, which is the highest proportion among all age groups. The main reason for this is that individuals in the 35-44 age group have higher household consumption needs and also tend to have higher incomes.
3）Strategic Geographical Location/ Chinese Community
The Southeast Asian market is diverse and complex, with language, culture, and preferences varying across different ethnic groups. While Malaysia is a multicultural country, the Chinese population makes up over one-fifth of the local population, and their language and culture are similar to that of Hong Kong. This makes it relatively easier for Hong Kong e-commerce businesses to enter and target the Chinese market during the initial phase of development. Once established, e-commerce businesses can gradually expand their reach to a wider range of ethnic groups and use this experience to tap into neighboring markets such as Singapore, Indonesia, Vietnam, and the Philippines.
As online shopping becomes increasingly popular in Malaysia, there is a growing need for e-commerce logistics services to support this trend. For businesses that are looking to expand into Southeast Asia, starting with Malaysia, it is important not only to understand the market environment but also to provide customers with a seamless shopping experience through efficient and reliable logistics support. This will not only enhance customer satisfaction but also prepare the business for future expansion into neighboring markets.
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