Ecommerce in Malaysia in 2018: An Overview and How to Get Started in E-commerce in Malaysia

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.

Ready?

Let’s get started!

In this guide

Summary

The Size of E-commerce in Malaysia

E-commerce in Malaysia So Far: A Timeline of Milestones

The Top E-commerce Players in Malaysia

Malaysian Shopper Behavior

What are Malaysians Buying Online?

Vital Sales Periods in Malaysia

How to Get Started with E-commerce in Malaysia

Conclusion

Summary

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 KoreaShopee 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)
1 Lazada 32 million
2 Shopee 11 million
3 11Street 8.4 million
4 Zalora 1.66 million
5 Hermo 718,000

Learn more about the top e-commerce websites in Malaysia in the article below:

Top 20 Ecommerce Websites in Malaysia and How They Make Money Online

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
  • MyCyberSale
  • Ramadhan
  • 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:

Why You Should Sell on Shopee Malaysia and How to Get Started in 2018

Why You Should Sell on 11Street Malaysia and How to Get Started in 2017

Why You Should Sell on Lazada Malaysia and How to Get Started in 2018

Sell on Lelong in 2018: How Much it Costs and How to Get Started in Malaysia

5 Ways to Start an Online Business in Malaysia in 2018

15 Popular Online Businesses in Malaysia and How They Make Money Online

Top 20 Ecommerce Websites in Malaysia and How They Make Money Online

How to Start an Online Business in Malaysia: A Step-by-Step Guide for 2018

How to Make Money Online Through Affiliate Marketing in Malaysia: Case Study + Guide

Conclusion

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.

Need Help with Setting Up Your E-commerce Business? Contact Us!

If you have been thinking about getting started selling online, we can help you to set up a store on any online marketplace (Lazada, Shopee, 11Street) or create your own e-commerce website.

To get to know more, please send us an email using the contact form below:

Lu Wee Tang
Lu Wee is the Founder of The Entrepreneur Campfire. The Entrepreneur Campfire (TEC) is where smart entrepreneurs in Southeast Asia gather. You can find practical articles on how to grow, market and scale your business on TEC.

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