How Did eCommerce Took Off In Malaysia?

How Did eCommerce Took Off In Malaysia?
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The eCommerce sector is one of the fastest growing and most attractive industries in Malaysia. The latest estimate by Statista revealed eCommerce platforms garnered revenue of RM4.2 billion by the end of 2017. Furthermore, the industry is expected to generate RM9.8 billion in revenue by 2022.

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The adoption of eCommerce platforms in the past years has greatly increased due to the surge of internet users. In 2017, there were 15.1 million active users in Malaysia, which is 47.9% of the Malaysian population. With the introduction of more affordable internet and broadband plans each year, the number of Internet users is expected to continually rise year on year.

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The main factor that drove eCommerce’s rise in popularity was also due to the existence of attractive products and services that was once not available through conventional businesses. If we look back 10 years ago, many consumers were still unfamiliar with online shopping and felt insecure making online purchases with their personal credit cards or bank details.

So how did we change from unbelievers of eCommerce to active online shoppers? Over the coming weeks, I will share my observations of how the online shopping industry developed in Malaysia and success stories in hopes to inspire local entrepreneurs to follow their path.

The Rise of ecommerce platforms at the Turn of the Millennium

The adoption of eCommerce during these years were spurred by the increased availability of internet services and usage of computers in households and offices. A study by the Multimedia University Malaysia stated that eCommerce earned a high growth potential due to the rapid rise in number of computer users and faster internet connections each year.

C2C platforms such as eBay and Lelong thrived during this era as it gave individuals the ability to sell products in a reliable and in a convenient manner. Users unfamiliar with payment gateways could easily purchase or sell items through cash on delivery (COD) methods. So, instead of inserting their credit card or bank details, buyer and sellers can meet face to face to inspect products and accept payments.

eCommerce platforms that existed in this era provided the first experience of shopping online to many Malaysians. This paved the way for traders to sell their items online without the need of a physical store to market their products.

The popularity of C2C platform also encouraged the use of payment gateways and other online payment methods. eBay, which provides Malaysia access to products sold abroad, made it mandatory for users to register as members to use its primary payment gateway, PayPal. This encouraged the use of online bank transfer, credit, and debit card in the subsequent years.

The 2000s also witnessed the rise of online stores on blogs that sold various items from consumer tech products to fashion items. When blogging exploded into the youth culture in the mid-2000s, it gave anyone with internet connection the ability to share their thoughts, ideas or sell items at the tip of their fingers.

Among them were Vivy Yusof who went on to launch her own online store, named Fashion Valet later in 2010. Vivy started blogging during 2000 under the domain and often shared her thoughts on topics such as love, life, career, family and parenting.

Vivy's husband, Fadzarudin Anuar (who was her boyfriend in the 2000s), saw ecommerce platforms' potential and partnered with Vivy to market fashion products online. In just a few years, they became one of the most visited online fashion stores in Malaysia and inspired many others to initiate their online business as well. Vivy’s pioneering move in the world of eCommerce in Asia was recognised by various organisations and among them were Forbes who listed her in the 30 Under 30 Asia list.

By 2011, eCommerce platforms experienced an additional influx of online shoppers through the hype of discount coupons by players such as Groupon. This set an important basis for eCommerce in this country as it further encouraged both local and international players to open shop in the country. In the years to come, Malaysians will see the introduction of more online stores such as Lazada, Zalora, 11Street, and many others that became a household name to shoppers today.


This is an expert article by iPrice Group

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