E-commerce is taking off in Malaysia. According to the statistics department of Malaysia, the e-commerce growth rate in Malaysia is expected to grow from the 10.6% in 2016 to 20.8% by 2020.
With one of the highest internet penetrations in Southeast Asia at 85.7% and mobile penetration at almost 140%, Malaysia has become one of the fastest growing emerging e-commerce emerging markets in the region.
What does this mean for you?
If you have always wanted to start an e-commerce business or want to grow your existing e-commerce business, this means that you will have a lot of opportunities to profit from this growing trend.
In this guide, I will show you the status of e-commerce now in Malaysia. We will look at
- how big exactly the e-commerce pie is,
- who are the players dominating the market,
- how are Malaysian shoppers behaving,
- what the biggest sales seasons in Malaysia are
and much more.
At the end of it, I will also show you how you can get started selling online in Malaysia if you haven’t done it already.
Let’s get started!
In this guide
Malaysia’s e-commerce landscape has grown a lot since the inception of pioneer marketplaces like eBay Malaysia and Lelong.
Now, with one of the highest internet and mobile penetrations, a developed logistics infrastructure and an educated population of online shoppers, Malaysia’s e-commerce pie is ripe for the taking.
At present, Lazada is the biggest e-commerce marketplace with the mobile-first Shopee trailing close behind. Combined, they command an estimate of 60 million users a month.
Further, government initiatives like the Digital Free Trade Zone (DFTZ) have bolstered cross-border e-commerce growth in the country. Sellers in Malaysia have the opportunity to export to countries like China, Singapore, Thailand, Indonesia, and the Philippines.
Image courtesy of www.mydftz.com
Although, with the recent change in government, much is left to be seen about the e-commerce developments that have since been established by the previous government.
Locally, marketplaces drive the most sales during 11.11 Singles Day and 12.12, both campaigns of which have first been popularised in China. Other than that, American-inspired Black Friday and our local MyCyberSales have also been pivotal in driving higher than normal sales to online sellers.
Malaysian shoppers do most of their shopping through mobile phones. But on top of formal channels like marketplaces and e-commerce websites, about a third of Malaysians prefer shopping through social media channels like Facebook and Instagram. Flights, hotel, and music are some of Malaysians’ most popular online purchases.
Now, there are many opportunities to start a business, with even a small amount of capital.
The Size of E-commerce in Malaysia
The first thing we want to look at is the size of e-commerce in Malaysia. The larger the pie, of course, the more there is for everyone.
According to Statista, revenues from e-commerce in Malaysia make up about US$1.3 billion.
Although this may appear big, compared to China’s US$584 billion, Malaysia’s e-commerce market is at least 500 times smaller.
Malaysia’s market is also almost 3 times less than that of neighboring Singapore’s which stands at US$3.4 billion, despite having six times the population.
As such, there is still a lot of room for growth in the e-commerce space in Malaysia.
E-commerce in Malaysia So Far: A Timeline of Milestones
To give you an idea of how far Malaysia’s e-commerce has come, below is a timeline of some of the most important e-commerce site launches (and closures):
2004: eBay launches eBay Malaysia
2007: Lelong.my is launched as pioneer Malaysian platform
2010: FashionValet.com is launched by Vivy Yusof and Fadza Anuar
2011: Mudah.my is launched
2011: Groupon launches in Malaysia by acquiring Groupsmore
2012: Lazada and Zalora are launched by Rocket Internet as a B2C e-commerce marketplace, Carousell C2C is launched, Rakuten Malaysia marketplace is launched by Rakuten Japan, Hermo.my is launched
2013: GemFive is launched by GuoLine eMarketing
2015: 11Street.my launched by 11Street Korea, Shopee is launched as mobile-first B2C and C2C e-commerce marketplace
2016: Rakuten Marketplace shuts down
2017: Fave launches, rebranded from Groupon
2017: GemFive shuts down
For a full timeline of the most important developments in Malaysia’s e-commerce, check out this resource from Go Ecommerce:
The Top E-commerce Players in Malaysia
In Malaysia, online marketplace dominates the e-commerce space, with local branded e-commerce websites trailing behind.
Here are the top 5 e-commerce websites in Malaysia based on their mobile app ranking:
|App Ranking (iOS)||Website||Monthly Traffic (Web)|
Learn more about the top e-commerce websites in Malaysia in the article below:
Malaysian Shopper Behavior
At the moment, internet penetration in Malaysia has reached almost 140%.
On top of that, following the global trend, more and more Malaysians are also shifting to mobile. In fact, Malaysians boast one of the highest mobile penetrations in the world at 85.7%.
As such, mobile has become an increasingly important consideration for e-commerce businesses. This was one of the reasons why Shopee launched as a mobile-first C2C e-commerce platform.
Other than buying on marketplaces and e-commerce stores, according to Bain & Company, about a third of Malaysians prefer buying informally using through Facebook and Instagram. This is the reason why social commerce is thriving in Malaysia.
What are Malaysians Buying Online?
Unlike the users in more mature markets like the US, Malaysians are not yet buying everything online.
According to the Consumer Barometer by Google in 2017, Malaysians are most likely to buy flights, hotels, music, ground travel and clothing and footwear online.
This means that not all products will see online sales.
Vital Sales Periods in Malaysia
According to a study by iPrice, sales periods drive the most sales in Malaysia with the 12.12 and 11.11 sales leading the way.
Both 12.12 and 11.11 are campaigns that have been imported into Malaysia by Alibaba and was first popularised through its own platforms like Taobao and Tmall.
Other than 12.12 and 11.11, these are the sales periods that drive the most sales in Malaysia:
- Black Friday
- Hari Raya
- Chinese New Year
Here is a closer look of the sales periods, as compiled by iPrice:
For sellers and potential sellers in Malaysia, these are periods to take note of as you can boost your sales.
How to Get Started with E-commerce in Malaysia
As you can see, there is a huge potential in e-commerce in Malaysia.
If you haven’t already started your own e-commerce business, the good news is that it is pretty easy to get started.
Here are resources that you might find useful to get started in your own e-commerce business:
The environment in Malaysia is ready for e-commerce growth. Internet and mobile penetration in the country is one of the highest in Southeast Asia and the logistics and legal infrastructure is prepared to take on a high volume of daily orders.
For those who are keen to profit from the growing e-commerce pie, you can do so by selling on e-commerce platforms, on your own website or even on Facebook or Instagram.