Summary

The Malaysia E-commerce market is expected to register a CAGR of 9.8% over the forecast period from 2022 to 2027.

Key Highlights
According to the International Trade Administration, Malaysia has a high e-commerce adoption rate, supported by a large population of active internet users (27.4 million or 80%) and high mobile phone penetration (84.2%) in 2021. Further, as of January 2021, there were 28 million social media users and 39.9 million mobile connectin=ons in the country.
Further, many government initiatives are being implemented to support the growth of e-commerce in the country. The government has established the National e-Commerce Council, comprising various ministries and government agencies, to drive the implementation of the National eCommerce Strategic Roadmap 2.0's (NeSR2.0).
The National eCommerce Strategic Roadmap 2.0's (NeSR2.0) is endorsed by the National Council of Digital Economy and 4IR and will be guided by three objectives: intensifying e-commerce adoption, enhancement of ecosystem development, and strengthening of e-Commerce policies and regulations.
According to the Commercial Crime Investigation Department (CCID) of Malaysia, E-Commerce fraud cases have increased from 3,318 cases amounting to RM 22.39 million in 2018 to 8,162 cases of e-commerce fraud with losses amounting to RM 57.73 million, which were reported until October 31 in 2021. Such high tenacity of fraudulence has restrained the market's growth, disassociating the buyers' trust.
According to the Malaysian Communications and Multimedia Commission (MCMC), internet traffic in Malaysia has increased by more than 30% during the pandemic. The Malaysian government has also recognized the growth of e-Commerce in the country and has supported MSME in adopting e-commerce. Further, the government was also proactively promoting the adoption of e-Commerce through digital campaigns such as "Buy Malaysia" and #SayaDigital.


Key Market Trends

Government Initiatives supporting the increased adoption of Digital Solutions


According to the Finance Ministry of Malaysia, in 2020, Malaysia's digital economy accounted for 22% of the total Gross Domestic Product. It is expected to create more than 500,000 jobs by 2025. With such developments, the Government is strategically collaborating with the private sector to incentivize people to adopt digital services and provide grants and assistance to smaller businesses.
The Government has outlined a roadmap for intervention in six areas in recent times. These areas include accelerating seller adoption of e-Commerce, increasing adoption of eProcurement by businesses, lifting non-tariff barriers (e-Fulfillment, cross-border, e-Payment, consumer protection), and realigning existing economic incentives, Making strategic investments in select eCommerce player and Promote national brand to boost cross-border eCommerce.
Other initiatives by the Government include strengthening digitalization among micro, small and medium enterprises (MSMEs) through eCommerce and innovative technology adoption. Further, Digital Free Trade Zones were launched to facilitate cross-border eCommerce and widen the global market access for MSMEs.


Consumer Electronics Segment Accounts for Significant Share


According to Department of Statistics Malaysia, In 2021, the sales value of manufactured consumer electronics in Malaysia was approximately MYR 38.59 billion. Over the years, the sales value of manufactured consumer electronics has varied. However, E-commerce has played a pivotal role with the commoners increasing buying goods through online channels.
Consumer electronics enhance people's lives through the power of technology. The emergence of Industry 4.0 has enhanced the development of new and advanced consumer goods that generate the demand for smarter consumer products embedding the latest technologies such as IoT (internet of things), AI (artificial intelligence), AR (augmented reality), and VR (virtual reality).
Consumer Electronics include Smartphones, Household Appliances, Computers, laptops, and other consumer electronics such as Television, Gaming Consoles, Wearables, etc. With the increasing number of product launches in the consumer electronics sector, there is a growing utilization of e-Commerce for purchasing of consumer electronics.
With advantages such as door shipping and reduced logistics spending by suppliers there has been an increase in demand for ecommerce in consumer electronics. Also, as companies are involved in continuous development of new products the e-Commerce for consumer electronics is said to grow in the future.


Competitive Landscape

The level of rivalry in Malaysia's e-commerce market is medium due to the presence of few significant market players. The number of local and global brands in the e-commerce market is increasing, which increases the competition in the market.


April 2022 - Mouqy Eyeware has launched its new e-Commerce store to expand its reach across different regions in the country. The website also offers a convenient virtual try-on feature that will let customers preview how different frame designs will look on their faces before they purchase anything.
April 2022 - Unifi Business launched new features in its suite of solutions for Malaysia's Micro, Small, and Medium Enterprises (MSMEs). This includes Unifi e-Commerce Hub which offers a single integrated platform, with an easy-to-use interface. This suit enables businesses to sync their offline and online sales channels, manage product inventories, and orders, monitor sales and revenue, as well as manage social media inquiries.


Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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