06 Oct One of the largest eCommerce markets in the region
Malaysia’s internet penetration rate of 81.2% is far higher than the rates prevailing in most other South East Asian developing nations. This puts Malaysia in a strong position to launch innovation-backed growth to capitalise on the country’s 25.6 million internet users. Malaysia, though a developing economy, is almost at par with Singapore and Hong Kong in its internet penetration rate.
Singapore and Malaysia represent the largest e-commerce markets in South East Asia, according to an A.T. Kearney report. Between them, they account for more than 50% of total online retail sales in the region despite being home to just 8% of the Southeast Asian population.
In 2020, Malaysia’s eCommerce market value was estimated to be US$ 4.46 billion according to Hootsuite and We Are Social and US$ 6 billion and it is expected to double to $8.1 BN by 2024, at 14% CAGR. Google and Temasek projects that Malaysia’s eCommerce economy could hit US$ 13 billion by 2025 with a CAGR of 17%. While e-commerce markets in Malaysia, Singapore and Indonesia are nascent compared to more mature markets in China and Japan, they stand out with respect to the relative size of their cross-border share of e-commerce. An estimated 55% of all e-commerce transactions in Singapore and 40% of e-commerce orders in Malaysia are cross-border orders from America and China.
In January 2021, Vice-president of digitally powered businesses (industry-supply) Gopi Ganesalingam said “Sectors like MedTech, the Fourth Industrial Revolution (Industry 4.0) and Agri Tech will be forerunners in 2021, contributing to the rise in digital revenue.”
Though goods imported into Malaysia are taxed and must comply with more stringent regulations than Singapore, Malaysia’s relatively larger and younger population highlights its future e-commerce potential. E-commerce growth in Malaysia is, in fact, primarily driven by a growing number of digitally-savvy, middle-class consumers seeking great deals and international brands. The nation also boasts an incredible 140% mobile penetration and 80%+ internet penetration. More than 25 million Malaysians access the internet and 80% of users between the ages of 16 and 64 shop online.