As we have previously viewed in other blog articles we wrote covering Southeast Asia, it is no surprise for you that the region has immense potential for online merchants. In fact, the SEA region was experiencing strong economic growth before the COVID-19 pandemic. And, while Malaysia is still battling the effects of the pandemic, the ecommerce space has been booming during that time.
Like many other countries around the world, Malaysia experienced its sharpest recession in 20 years due to the COVID-19 pandemic, with an overall projected contraction of 5.8% in 2020. However, the successful containment of the third wave and the easing of movement restrictions coming from an effective roll out and distribution of vaccines will likely help boost economic recovery. Private consumption in Malaysia is actually expected to return to a 7.4% growth in 2021.
Entering the new year, prospects look brighter, with economic activity expected to improve and even grow by 6.7% in 2021 while the global economy is projected to grow by just 4.2%, according to the December 2020 World Bank Malaysia Economic Monitor.
As we have seen in other blog articles covering online buying behaviors during the pandemic, online shopping became the norm in a lot of countries around the world and ecommerce businesses boomed globally as people shifted towards online platforms and technologies in general. Malaysia was no exception and will remain one of the top five leading SEA ecommerce markets in terms of growth in the coming year.
During 2020, online merchants’ sales in Malaysia saw a significant growth across various product categories, showing a clear change in Malaysians’ buying behaviour. While Malaysians are adapting to new living situations and technology is taking on greater prominence within the population, the ecommerce industry has seen a very encouraging spike and was among the few industries in the country that thrived during this challenging year. According to data by the iPrice Group, the most visited ecommerce websites in Malaysia during the lockdown were Shopee and Lazada, with 81 and 36 million visits during the period respectively. And Lazada saw a 200% growth in the number of new sellers on their platform during the first half of 2020.
In line with this sharp increase in ecommerce activity, food deliveries also jumped and 17% of Malaysians ordered food via an application for the first time. As well, 48% of Malaysians said they were buying more online now than before the pandemic. Malaysia’s transition to digital is not likely to reverse.
According to the International Data Corporation (IDC), there will be a higher number of consumers embracing cashless payment methods for the first time this year. While Malaysia only has a middling bank card penetration, almost half of online purchases are made through bank transfer applications. The government also started to encourage consumers to adopt e-wallets through its economic stimulus package called Penjana. This short term economic recovery plan has 40 different initiatives, including the payment of Malaysian Ringgits to eligible Malaysians through e-wallet service providers, making this payment method the gateway for online payments. The three major e-wallet service providers that stimulated ecommerce payments in Malaysia during the lockdown are Touch n Go (TnG), Boost and Grab.
If you want to conquer new markets successfully and find out what we can do together, please contact us on our website, via LinkedIn or email (firstname.lastname@example.org).