MALAYSIA E-COMMERCE MARKET TO GROW BY 10.6% IN 2021

MALAYSIA E-COMMERCE MARKET TO GROW BY 10.6% IN 2021 - The Malaysian e-commerce market, one of the fastest growing in the Southeast Asia, is expected to register a strong growth of 10.6% in 2021 due to an accelerated shift towards online shopping among consumers caused by the COVID-19 pandemic, forecasts GlobalData, a leading data and analytics company.

Nikhil Reddy, Payments Senior Analyst at GlobalData, comments: “Malaysia’s e-commerce market registered a robust growth for the last few years supported by rising Internet and smartphone penetration, growing middle class population and tech-savvy millennials. The social distancing measures as well as closure of physical stores due to lockdown made online shopping more convenient for consumers.”

According to GlobalData’s E-Commerce Analytics, e-commerce payments in Malaysia is estimated to increase at a CAGR of 18.3% from MYR28.5bn ($7.1bn) in 2021 to reach MYR55.7bn ($13.8bn) in 2025.

Mr Reddy continues: “While e-commerce market registered a robust growth in 2020, the growth was comparatively slower than pre-COVID-19 period. This was mainly due to reduced consumer spending on services such as travel and accommodation due to travel restrictions. However, higher demand for day-to-day essentials products such as food and groceries is pushing e-commerce growth. 2021 is expected to be a stronger year for e-commerce providers, with gradual easing of travel and lockdown restrictions as well as rise in consumer spending.”

Cover Photo by Pok Rie from Pexels

The government is also taking various initiatives to boost e-commerce sales. Under its ‘Go-eCommerce Onboarding campaign’ running between July to December 2021, the government is encouraging SMEs to go online by providing them with financial aid/subsidies. The focus is to help small businesses widen their reach via e-commerce.

Mr Reddy concludes: “The shift in consumer buying behavior caused by the COVID-19 pandemic, coupled with the availability of various online payment options and government support will further drive e-commerce market in Malaysia.”