The e-commerce market in Malaysia is among the fastest-growing in Southeast Asia, with a total transaction value of MYR25.6bn (US$6.2bn) in 2019. This is expected to cross $11 billion in 2023, according to GlobalData.
Rising Internet and smartphone penetration, growing middle-class population and increasing tech-savvy millennials, coupled with government initiatives, propelled the e-commerce market value to grow more than three times between 2015 and 2019, according to GlobalData’s latest report, Malaysia Cards & Payments: Opportunities and Risks to 2023.
Total transaction value in the space is expected to grow at a compound annual growth rate (CAGR) of 15.9 percent to reach 46.3bn Malaysian Ringgit ($11.2 billion) in 2023, the firm adds.
In addition to the increasing number of online shopping population, the government is also supporting the country’s e-commerce market with initiatives under its National eCommerce Strategic Roadmap (NESR), said Sowmya Kulkarni, Banking and Payments Senior Analyst at GlobalData.
As part of the NESR, the government is putting concerted efforts to increase awareness among consumers and businesses, especially small and medium-sized enterprises (SMEs). The government launched the Digital Free Trade Zone in March 2017 with an aim to position Malaysia as one of the regional e-commerce hubs.
Alternative payments are the most preferred mode of e-commerce purchases in Malaysia, accounting for 38.2 percent in 2019, closely followed by payment cards with 38 percent, based on GlobalData’s 2019 Banking and Payments Survey.
With consumers gradually shifting from cash to electronic payments in Malaysia, the rise in online shopping will provide payment companies a significant growth opportunity in Malaysia, added Sowmya.