Malaysia Has One of The Best Developed Infrastructures for B2C E-Commerce

The latest publication of Hamburg-based secondary research organization yStats.com, “Malaysia  B2C E-Commerce Market 2014“, reports that Malaysia has one of the best developed infrastructures for B2C E-Commerce in South East Asia.

Internet penetration, supported by government programs, is the second highest in the region, and its logistics system is among the 30 best performing in the world. Consumers in Malaysia are well equipped with bank cards and other means to pay for online purchases. Though online retail in Malaysia still accounts for less than 1% of total retail sales, Malaysia is ranked in the top 30 markets worldwide for its B2C E-Commerce potential.

Nearly 20 million people are connected to the Internet in Malaysia, and another five million are expected to go online next year. A high double-digit percentage of Internet users in Malaysia shop online, motivated by price advantages, product range and availability of reviews. Malaysian shoppers look for free shipping, convenience and exclusive online deals offered by online stores. Moreover, online shopping is encouraged by new E-Commerce regulations adopted in 2013, aimed at protecting consumer rights and preventing online fraud.

The M-Commerce segment of online shopping is spreading rapidly in Malaysia, boosted by growing smartphone penetration and mobile Internet usage, which is encouraged by governmental initiatives, such as partial reimbursement of smartphone acquisition costs for young adults.

Cross-border online shopping is a major trend in Malaysia. The key destinations for the online purchases outside the country are the USA, China and the EU, with the most popular foreign merchants being respectively US-based Amazon, China’s Alibaba and UK-based Asos.

Various payment methods are used in Malaysian B2C commerce. A large share of the purchases made online are still paid for in cash. Of the online payment methods, credit or debit cards and online banking are in the lead, with PayPal in distant third. In terms of delivery, the majority of online shoppers were willing to wait several days for delivery of their purchases, while a significant share expect delivery in a maximum of one or two days.

Online auctions, classifieds, deals websites and social network shopping are more popular with online shoppers in Malaysia than online retailers. Websites such as group buying merchant Groupon, online classifieds Mudah.my, online marketplaces Q0010, Youbeli and Lelong are among the popular choices for Internet shopping.

The leading B2C E-Commerce players were online mass merchant and marketplace Lazada, online fashion retailer Zalora, and B2B2C marketplace Rakuten. Global groceries retailer Tesco also has established a strong online presence in the country, offering delivery of food and household products to the consumer’s doorstep.