The growth of e-commerce in Malaysia can be assured due to the fact that over 50% of the entire population of the country relies only on online shopping via mobile devices to search, purchase, review and promote a product.
The biggest reasons behind the massive success of e-commerce in Malaysia consist of the fact that the products sold have a higher margin, user penetration for online shopping is expected to grow up to 53.1%, and the e-commerce revenue of the region is analyzed to reach almost at $11.65 billion in 2023 growing at a CAGR of 14.24% to reach $19.84 billion by 2027.
If we specifically analyze the growth rate of the different modes of e-commerce, then we see that each of the three modes of e-commerce viz a viz Cross Border, B2B and Domestic e-commerce (B2C) have their own strengths and differentiators in the Malaysian e-commerce ecosystem.
E-commerce Growth in Malaysia: Different E-commerce Selling Models
Cross Border E-commerce
Starting off with Cross Border e-commerce,the top countries in the list of every Malaysian online shopper include Singapore, Japan, the United States, South Korea, and China, from where a variety of products, right from beauty to electronics, are purchased and paid for via online transactions due to the superior safety and trust of consumers around Malaysia.
Seeing the opportunity, even the government has several business regimes and foreign business strategies in place to support Cross Border e-commerce in Malaysia, making the growth rate of this mode quite high.
If we talk about the B2B e-commerce mode in Malaysia, the current numbers show a growth of USD 3.4 billion and indicate that B2B e-commerce is a quickly growing section for SMEs. Over 61% of small to medium businesses and brands trust the growth vertical of the B2B e-commerce mode in Malaysia and continue to adapt to high-functioning technological advancements, right from mobile shopping to online payments, to enhance their products and services.
For Domestic e-commerce or B2C e-commerce, Malaysia is turning out to be a profitable market as local businesses, sellers, and retailers are being offered immense opportunities by the government to upscale their business offerings, rising cash flow, etc., to help them grow more and contribute towards Malaysia’s overall GDP.
With the strengthening of local as well as cross-border e-commerce practices in Malaysia, the sellers, the consumers, and the overall country is expected to become the next battleground for brands and businesses to provide the best of services to the shoppers, gain more and more profits and experience a vertical growth curve.
Latest E-commerce Trends in Malaysia
1. Rapidly Growing Online Marketplaces
User penetrations for online shopping are expected to hit 53.1% by 2025, and as the online audience grows, multiple businesses, sellers, and retailers are moving towards either creating their own websites for users to have an uninterrupted shopping experience or integrating on leading marketplaces including Shoppe, Lazada, Zalora, 11Street, etc.
Post understanding the benefits of selling products via these online mediums, especially on marketplaces, brands, and businesses have managed to experience the change in numbers for their sales, profits, and overall growth.
2. Booming Economy
The e-commerce consumer goods market in Malaysia is expected to grow to US$5.9 billion by 2024 due to the huge mobile shopping audience. This indicates the rapidly growing economy of the nation, which plays a key role in deciding the success of e-commerce businesses in the region.
As Malaysia is set to surpass even Singapore in being the fastest growing and immensely successful e-commerce market, the government of the country has put forth several policies and national laws to help brands and businesses to invest in the e-commerce arena and in turn strengthen the economy of the nation even further.
3. Quality Over Price
Malaysian online shoppers prefer to buy high-value goods and services and can easily oversee the pricing put on a product if that suits their needs. This happens because of the relatively younger population of the nation in comparison to other Southeast Asian countries.
Also, as the frequency of customers shopping online is more than 59% a month in the region for major categories of Fashion, Electronics, Home Decor, Groceries, etc., it is quite evident that the market can substantially increase its revenue by simply providing good quality products no matter the rates.
4. Flexibility to Try New Products
The audience of Malaysia is fearless to trying new things, and as the major population comprises youngsters with a social influence bigger than anything in the region, businesses that offer unique, quirky, and fun products will not vary among customers and can expect good profits.
Also, the majority of the Malaysian audience is happy with the services and the variety they can find whenever they shop online, making it even better for niche businesses to go online and sell their products.
5. Last – Mile & Same Day Delivery
Faster and last-mile delivery not only plays a crucial role in increasing the customer experience for any business, but for the Malaysian audience, it is a key factor because most of the population expects their online purchases to be delivered to them as much as in 3 days’ time.
These expectations are a basic requirement for any e-commerce business or seller to speed up their dispatch and shipping processes and ensure that the products even reach the most remote customers.
E-commerce Strategies for Successful Business in Malaysia
New businesses, products, and services are emerging at a very fast pace in Malaysia, and in no time will the country define new avenues of e-commerce growth.
So what should you, as an online seller or brand just starting their e-commerce journey, do to make the most of the growing market?
1. Strengthen Your Social Media Presence
Having a strong social media presence is vital for businesses today, especially with a mobile-first audience. This is because most people access social media platforms through their mobile devices, making them a crucial tool for connecting with customers. Businesses can effectively engage with their audience and build a loyal customer base by having a solid social media presence.
2. Sell on Multiple Leading Marketplaces and D2C Websites
Integrating with the big and multiple selling platforms in the Malaysian e-commerce market can maximize your customer reach, strengthen your brand presence and increase your overall profitability. You can also launch your own D2C website to connect directly with your customers and offer a personalized shopping experience. Using multichannel order management system can optimize your business processes and ensure seamless transactions on multiple selling platforms.
3. Ensure a Wider and More Diverse Product Range
When you are constantly working on building your brand presence and aiming to provide a seamless experience to your customers, one of the ways that could help you is to keep on adding, revising, and maintaining your product listings. This can help you appeal to a broader customer base and increase your sales potential.
Keeping a well-stocked and updated product range can also demonstrate your commitment to providing a high-quality customer experience, which can enhance customer loyalty and satisfaction.
4. Manage Inventory in Real-time to Avoid Stock-outs or Dead Stocks
Inventory management is a critical aspect of any e-commerce business. A proper inventory management software can help you stay organized, ensure that you never run out of stock, and make informed decisions about restocking, promotions, and other aspects of your business.
5. Provide a Seamless Omnichannel Shopping Experience
If you’re an established business looking to grow in the Malaysian e-commerce market then leverage an omnichannel approach. Ominchannel is one of the most effective way of providing streamlined services to your customers, as it ensures that no matter where or from which medium your shoppers are browsing or purchasing items, they always get the same user experience.
6. Track Customer Behaviour and Preferences
By tracking and analyzing your customer’s behavior and preferences, you can better understand their needs and offer tailored suggestions that cater to their specific tastes and requirements. This can be done by rendering automated tracking systems that analyze your customer’s buying patterns, choices, needs, etc.
7. Empower Your Warehouse Operations
To achieve higher sales, increase customer satisfaction and to enhance your serviceability, it is very important to strengthen your warehouse operations. A robust warehouse management system can help you streamline operations and improve order fulfillment, stock keeping, and overall serviceability.
The road to success in Malaysia is relatively easy to achieve if you are determined and have a clear vision of where you want to be and what kind of services you want to offer. Success in e-commerce requires analyzing market trends and implementing effective strategies.
An e-commerce enablement solution can be an essential tool for businesses looking to grow and succeed in the fast-paced world of online retail. It offers a comprehensive approach to managing all aspects of the supply chain, from inventory management to order fulfillment and warehouse operations.
Don’t wait up; get the right support and start your successful e-commerce journey today!
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