E-commerce in Malaysia
Malaysia is one of those countries that have dreamed to excel in technology and internet. For Malaysian government, eCommerce, technology and internet are strategic drivers to drive the economy from knowledge-based to competitive knowledge-based and to enter the digital age. With the support of Malaysian government, the information & communication technologies (ICT) and e-commerce industries in Malaysia are growing by leaps and bounds.
The internet usage stats of Malaysia support the fact that the country has bright prospects for eCommerce industry. The acceptance of new technology, increasing trend for online shopping and increased number of online users are some of the key drivers in development of e-commerce in Malaysia. According to international data corporation survey, the number of internet users in Malaysia will increase to 18.5 Million and number of online spending will increase to 10.5 Million by 2012. Malaysia has been ranked 10th in internet usage among top 10 countries of the world. As per survey of International Data Corporation (IDC) in 2007, the overall eCommerce spending in Malaysia was US$22.3 billion which is expected to get doubled by 2012.
The Malaysian government is always been a big supporter of internet technology. There are a number of policies that intend to promote investment in online ventures. One of the major supporting initiatives by Malaysian government is 8th Malaysian plan that aims to increase the usage of technology and build a strong infrastructure ICT both for private and public sector. Some of the main goals of Malaysia 8th plan are:
- To ensure national information security
- To create Emergency Response center to address regulatory and technical issues
- To ensure high level of internet security
Apart from Malaysian 8th plan, there is a specified ministry which is working for the growth of information and communication technology in collaboration with other organizations such as Malaysian Institute of Microelectronic Systems, Multimedia Development Corporation and Malaysian Communications & Multimedia Commission. Moreover, Malaysia is also participating in Asia Pacific Economic Cooperation’s (APEC) to collaborate in devising E-commerce laws, regulations and policies. With all these policies and initiatives, eCommerce in Malaysia will soon be one of the most growing industries.
Malaysia E-commerce Stats:
The above mentioned graphical presentation shows that e-commerce industry is on its boom in Malaysia. People as young as below 21 to as old as 51 or above are involved in online buying. People prefer online buying for things such as air tickets, jewellery, watches, computers, books and many other items. The size of Malaysian e-commerce market is anticipated to be increased to RM 5 billion by 2014, which is very encouraging.
Barriers of E-commerce in Malaysia:
No doubt, eCommerce in Malaysia is in booming stage. Still there are number of challenges that need to be addressed. Yes, the number of people spending online is increasing, yet online spending is not a habit of general public. In Malaysia, eCommerce is far behind than the other developing economies such as USA, UK and Canada, etc. It lacks giants such as amazon and eBay. All the major retail companies are investments of multinational companies. There are very less Malaysian local companies which are tapping the eCommerce market.
The following table summarizes top online retailers in Malaysia:
Following are the top five Malaysian online stores.
Gradually, with the initiatives and support of Malaysian government, the number of online local stores is increasing. For these small and medium sized companies, the biggest challenge will be attracting organic traffic because online buying behavior is far more different than buying from physical stores. The online retailers have to won the trust of customers by facilitating with best prices and best internet security features. For this purpose, a price comparison engine should be in place that will bring convenience for the online buyers and will enhance eCommerce in Malaysia
The above mentioned graph represents some of the reasons which are posing challenges for e-commerce growth in Malaysia. However, the initiatives by Malaysian government to strengthen the ICT infrastructure will soon resolve many of these issues and the e-commerce will continue to boom.