Per an industry report from the popular e-commerce platform Shopee, data revealed that over 145,000 Malaysian retailers on their application reported a sales increase of approximately 25% in the past 12 months. While the survey was conducted exclusively among sellers on Shopee, such data can provide a glimpse of the success that the e-commerce industry in Malaysia has achieved throughout the pandemic.
Many wonder whether such success can be sustained, especially given the return of retail shoppers to physical stores. Despite this, early indicators suggest that the e-commerce market in Malaysia will remain profitable in 2023, but how it progresses will depend on several factors moving forward.
Market Outlook of E-Commerce in Malaysia
At a glance, Malaysia’s e-commerce market is strong because of several factors, like growing internet penetration, improved connectivity, and the continued adoption of smart technology across society. These factors have bolstered the country’s overall digital economy and helped increase the number of online shoppers, a development that the e-commerce industry has effectively capitalized on. These indicators suggest that e-commerce in Malaysia and the involved parties have a strong foundation to work from in the short and long term.
Another significant factor that will likely influence the e-commerce market outlook is public-private partnerships between relevant e-commerce stakeholders and the Malaysian government. Such projects dedicated to e-commerce growth are flexible, thus allowing for collaborations of differing types. For instance, some smaller PPPs could focus on stimulating the growth of micro, small and medium enterprises (MSMEs) in the e-commerce industry via specialized programs, like upskilling or digital literacy classes. Other projects could instead be more extensive in scope, creating developmental frameworks like the National E-Commerce Strategic Roadmap (NESR), which strategically outlines a roadmap for e-commerce growth in Malaysia from 2021 – 2025.
The most important factor for e-commerce growth in Malaysia will be how online retailers pivot and adjust their business strategies, especially considering that pandemic spending behavior will drastically change in 2023 and the coming years.
Potential E-Commerce Growth Opportunities
One strategy that online retailers can employ is utilizing exclusive online product releases to maintain their current audience while enticing an entirely new consumer base. Given how flexible this business scheme can be, this strategy can be employed across large and small retailers in different categories.
Online retailers should also explore investing in an omnichannel approach, which helps increase retailers’ visibility both online and offline. Establishing an omnichannel presence can also help retailers improve their growth potential as they will increase the number of offline consumers they cater to. Online retailers could expand to brick-and-mortar stores in physical marketplaces if successful.
Moreover, another promising growth opportunity for e-commerce players is how the involvement of other industries can stimulate growth. For example, given that many online buyers rely on financial technology to facilitate their purchases, the success of fintech has directly translated to the e-commerce industry. Some e-commerce platforms have even developed their fintech ecosystem, enticing buyers to participate through vouchers and coin rebates.
As Malaysia's e-commerce industry attempts to sustain the growth it has enjoyed in the past years, the involved parties will need to keep an eye on emerging trends in the ever-changing market. Potential investors should capitalize now as the businesses will be open to collaboration.
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