The Malaysian e-commerce market, one of the fastest growing in the Southeast Asia, is expected to register a strong growth of 10.6 percent in 2021 due to an accelerated shift towards online shopping among consumers caused by the COVID-19 pandemic, forecasted GlobalData.
Nikhil Reddy, Payments Senior Analyst at GlobalData, commented, “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 percent from MYR 28.5billion (US$7.1 billion) in 2021 to reach MYR 55.7 billion (US$13.8 billion) in 2025.
Mr Reddy continued, “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.”
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.
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Mr Reddy concluded, “The shift in consumer buying behaviour 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.”