DIGITAL MARKETING

An Insight Into the Market Growth of Malaysian E-Commerce

An Insight Into the Market Growth of Malaysian E-Commerce

E-commerce is loosely defined as a form of business where people buy and sell their products and services online. With e-commerce, the possibilities are endless – there are many things that are made available online, and it is no surprise that people can get hooked on big e-commerce sites. On a global scale, $4.9 trillion in sales have been generated in 2021. 70% of these sales happen in countries in the Asia-Pacific region, including Malaysia.

In Malaysia, the start of the e-commerce industry is linked to the introduction of eBay Malaysia in 2004. Today, it is a booming business that may generate up to $5,540 million in revenue and by 2025, the growth rate is expected to be 14.97% per year.

At a glance, Malaysia holds much potential to be the global hotspot for e-commerce. In a report by the Australian Trade and Investment Commission (Austrade), our country has the highest smartphone possession rates as well as the biggest increase in e-commerce activities.

Since 2018, the trend has been on the rise, and this proves that most Malaysians prefer to shop online for their products. While Lelong.my and Mudah.my have been called the pioneers of the e-commerce wave, sites like Lazada, Shopee, and Hermo have dominated the Malaysian market. Selling a variety of brands and products, each of these e-commerce sites is popular for many reasons.

Why Should You Invest in Your E-Commerce Store?

A side effect of the Covid-19 pandemic would be the emergence of e-commerce opportunities in the country. As local business owners close their brick-and-mortar store, many of them have switched to online platforms to continue providing their products.

A major industry that has caught my eye during the pandemic would be the food and beverage industry. On top of the main delivery and transport companies like Grab, HappyFresh, and Foodpanda, many restaurants have begun to introduce in-house delivery themselves. With everyone preferring to stay at home for their safety, they started to develop a need for these delivery services.

Image from Johor Foodie

Besides convenience, many have switched to e-commerce services because of their accessibility to various products. On Lazada, the biggest ASEAN e-commerce site, there are over 18,000 stores that support both international and national brands. In the same study by Austrade, the report claims that Malaysians rely on e-commerce stores to buy products from different states (e.g. East Malaysia) and countries (e.g. China).

The product ranges are diverse, the catalogue is organised, and the inventory is efficiently categorised based on their brand, product type, product characteristics, and even the availability of the product. You’ve got everything you need at your fingertips.

An e-commerce site is also easy to use. Think of Shopee Malaysia – you don’t have to come to the store at a certain time of day to avoid the big crowds. At the comfort of your home, you can browse through the options and pay for your stuff. You can also do all of this in a moving train, or right before you board a plane.

Shopee Malaysia also offers different payment methods, and they all ensure a sleek transaction process. At the same time, they provide fast delivery to your doorstep, order-tracking, and fuss-free product returns. Stores are constantly updated, and they provide an enhanced customer service experience by providing reviews and addressing your enquiries. What more can you ask for?

According to this article, the top five most popular items to buy online in Malaysia in 2019 are electronic devices, fashion items (regardless of gender), food, personal care products, and kids’ toys.

In terms of the region, MalayMail reported that Selangor stood out as the state with the most e-commerce activity. While men generally went for tech gadgets and accessories, women sought products in beauty and fashion. These product categories are particularly popular among teenagers and adults – groups with higher mobile phone usage.

Sale events could be a major benefactor to e-commerce’s rise in Southeast Asia, specifically Malaysia. CED Commerce has observed that on days like 12.12 (or 12 December) and 9.9 (or 9 September), there is a 4-5 times increase in web traffic and an average of order placements every 2 seconds. To back this up, Shopee Malaysia reported that they sold 80 million items during the 12.12 sales event in 2019.

In addition, CED Commerce found that evenings (specifically 9pm to 10pm) are the popular times to shop for shoppers during December sales events. This is because people are willing to stay up all night and check out the items in their cart. After all, as humans, we’re driven by huge discounts.

Image from Shopee Singapore

In an attempt to save the Malaysian economy during the pandemic, the government initiated a 3-month campaign project under PENJANA (Pelan Jana Semula Ekonomi Negara) to boost e-commerce awareness in the country. With a budget of RM140M (US$34.2M), it provided the resources to local businesses so that they can digitalise and sustain themselves. This included training, seller subsidies, and sales support. The campaign could potentially create more opportunities for many local merchants.

However, while e-commerce has its benefits, the lucrative industry also has its drawbacks. In the eyes of an e-commerce retailer, there are many facets to managing an online store. After the initial set-up, there is much to manage.

For starters, a retailer has to juggle inventory management and running their account. These two activities are made up of smaller tasks, including product marketing, store design, and community management. This is where Pandan Social comes in, offering their services in managing the technical side of e-commerce.

Get started on your e-commerce store now. Contact us at info@pandansocial.com or visit our Facebook page.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily represent official policy or position of Pandan Social.

Natasha Effendy
natasha@pandansocial.com