Understanding Malaysian E-commerce Shoppers
6- Steps for Cross-border shipping to Malaysia:
Customs clearance in Malaysia
Malaysian payment preferences
Known as one of the ‘Tiger Cub’ economies, Malaysia’s developed infrastructure and strong economy make it a popular expansion option for e-commerce merchants. The average Malaysian has good spending power with Malaysia’s GDP per capita being the third highest among ASEAN nations.
Cross-border sales fulfil many Malaysians’ love for high quality products, some which are unavailable locally, at reasonable prices. For instance, beauty products bought cross-border from South Korea are quite popular among Malaysians.
Most of Malaysia’s online purchases take place in the Klang Valley. Known as “Lembah Klang” locally, it is the industrial heart of Malaysia. The Klang Valley primarily consists of dense, urban areas in Kuala Lumpur and its neighbouring cities. A large proportion of Malaysia’s manufacturing capabilities is located near Port Klang, and well-developed infrastructure is in place to support them. The well-developed infrastructure also greatly help e-commerce deliveries.
Malaysians love low prices and the convenience of online shopping, but also want their purchases delivered fast. To reach Malaysians, you’ll need to find a quick and reliable shipping partner. Your shipping partner should know what you can and cannot ship into the country and how to collect payment for your products.
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While shipping experiences may vary between shipping partners, the general steps you’ll need to do to get to Malaysia look like this:
Finding the right shipping partner
Packaging your goods
Choosing the right level of service
Providing shipment details
Printing the shipping labels and documents and attaching them to your package
Passing the shipments to the carriers
The right shipping partner can make or break your delivery experience. Look out for partners who have the following:
Has local expertise
Knows what you can and cannot ship into the country
Knows how to collect payment for your products
Cross-border shipping has different stages in a delivery with different shipping partners having strengths and weaknesses at each stage. Some companies specialise in only one stage of delivery but offer competitive rates. Larger international logistics partners can provide end-to-end fulfillment services that cover all stages, but be wary of the costs.
Generally, cross-border fulfilment follows these stages:
First Mile – The shipment moves from the merchant’s warehouse to the port
Origin Customs Clearance – Clearing goods for export from your country
Freight – The shipment moves from the home country’s port (origin) to the destination port (destination).
Destination Customs Clearance – Clearing goods for import in the destination country
Distribution – Parcels arrive at a warehouse or distribution centre to be sorted and assigned to trucks to before the last mile delivery stage.
Last Mile – The shipment moves from the destination port to the customer’s home
As an example, goods could be shipped by truck from the merchant’s premises in Singapore to Changi Airport (SIN) where it is cleared for export. From there, it uses air freight towards Kuala Lumpur International Airport (KUL) and goes through customs clearance. After that the delivery is distributed via truck or motorcycle to the customer’s office or home. One way to save money on shipping is to use multiple smaller shipping partners at different stages of the delivery, but this may prove hard to manage for many merchants. On the other hand, there are shipping partners with strong networks in Malaysia who manage these logistics network partners for you at a similarly competitive rate. With regards to freight, there are multiple types of freight options for you to ship goods into Malaysia. Each of them has varying levels of speed and cost. The pros and cons of these methods are:
Air freight: For many e-commerce merchants, air freight is the transport mode of choice as it provides fast and reliable deliveries. West Malaysia’s main airport is Kuala Lumpur International Airport (KUL), Sarawak has Kuching International Airport (KCH) while Sabah has Kota Kinabalu International Airport (BKI)
Sea Freight: Sea freight is cheaper but much slower than air freight. Consider your delivery deadlines and shipping model before picking this option. Malaysia’s primary port in the Klang Valley is Port Klang. Sarawak’s main port is Kuching Seaport (MY KCH) while Sabah’s main port is Kota Kinabalu Seaport (MY BKI)
West Malaysia has road connections with Thailand and Singapore, so line haul trucking is a viable transport method of delivering to the Klang Valley if your warehouses are in those countries. This transport method is cheaper than air freight and faster than sea freight, but only if your warehouse has access to Malaysia’s road network.
Last Mile Considerations:
Land transport is vital to last mile delivery. Apart from finding one with local expertise, find a Malaysian last mile partner who can provide different delivery options to customers.
These options could include delivery to parcel lockers or even leaving the shipment at the guard house of a gated community or condominium. By providing this, you can reduce the likelihood of the customer missing their shipment if they are not home at the time.
2. Packaging your products
Appropriately packaging your products with the right packing materials is important in cross-border shipping. Packages may be subject to rough handling during its cross-border shipment to Malaysia, so including additional packing materials like bubble wrap or packing peanuts helps prevent your products from bouncing around within the package during shipment. Proper packing helps prevent damage to your goods and can save you money on replacing damaged goods.
3. Choosing the right level of service
Carriers usually offer multiple tiers of service in shipping. These delivery options mainly differ in their offered features, such as:
Real-time tracking & tracing
Free pick-up at origin address
Compensation in the event of loss of shipment
On-call customer service
Typically, the more features offered, the higher the shipping fee is. Choose one that best suits your budget and shipping needs. Some Malaysians are willing to pay more for express shipping so it might be worthwhile to have a faster shipping partner on hand as well. When planning your shipment, you can consult your shipping partner for recommended steps in packaging your goods for transport.
4. Providing shipping details
Carriers will need merchants to provide shipping details to generate the documentation required by Malaysia’s customs. The types of information carriers most commonly require are:
Sender’s details and address
Recipient’s details and address
Country of manufacture
Declared value and the currency in US$
Harmonised System (HS) Code of Item
Item weight and dimensions
This information will be entered into a Customs Declaration form and shipping label by either you or the shipping partner if they offer this service. Always check that this information has been entered accurately. Incomplete documentation may trap your goods in customs. Additional shipping charges could arise if the shipping company returns the packages to you.
Under-declaring the value of the items of your shipments on the commercial invoice could result in fines if the customs clearance agencies correctly suspect it.
5. Print the shipping labels and documents and attach them to your package
Print and paste the shipping label, which contains the information you’ve entered in the previous step, securely onto the parcel. The addresses and bar-codes on the shipping label must be in clear view for identification and customs inspection. Ensure the shipping documents can be found on the package. One way to do this is to place all supporting documents inside a clear plastic pocket and tape it onto the package. Do note that some of these documents, such as the customs declaration and commercial invoice, will require the sender’s signature.
6. Passing the shipment to the carrier
Depending on the delivery option you select and service level the carrier offers, the carrier will collect the package from you either at the sender address you specified or at one of their drop-off points in your origin country. If your selected service level includes track and trace, you’ll receive a tracking code for your package after your carrier receives the package. Your customer can also use this tracking code to find out where the package currently is. It’s also good to note that Sunday is a non-working day in Malaysia. Sundays and Public Holidays may delay shipments, so you may want to plan around when Malaysia has its holidays. Do note that some holidays in that list are state specific, such as the Sultan of Selangor’s birthday only affecting operations in the Selangor state, so you can check in with your shipping partner to see how deliveries might be affected by these dates.
To clear customs, you’ll need the right documentation and depending on the value of your shipment, pay customs taxes and duties.
Malaysia’s customs require extensive documentation prior to clearing goods for import. For this, most carriers engage local customs brokers who are accustomed to the standard procedures and required format of documentation. Minimally, the carrier must present the following to the relevant agencies:
Commercial and pro-forma invoice
If you are planning on shipping without a logistics partner who can clear customs on your behalf, you’ll need the following:
Airway bill or bill of lading
Receipt of payment of import duty and import-related taxes
Other relevant permits, licenses, and certificates
If your shipment is valued lower than MYR500, your shipment won’t be charged duties and taxes. The MYR500 limit is Malaysia’s de minimis value, a threshold only above which duties and taxes will be charged. This is to encourage consumption in the country.
However, if your shipment goes above MYR500, you’ll be required to cover the following Taxes and Duties:
Malaysia’s recent change in government saw the abolishment of the Goods and Sales Tax. In its place is the Sales and Services Tax, which is placed at 5 – 10% of your shipping value if your shipment is valued above RM 500.
Shipment above Malaysia’s de minimis value are also subject to import duties, which vary depending on the type of good being imported. To identify the type of goods, Malaysia follows the Harmonized System Classification of Goods (HS Codes), an internationally agreed upon method of classifying goods.
For most e-commerce consumer products, import duties range from 0 – 25%. You can use Malaysia’s official HS explorer to find out how much tariffs you might need to pay depending on your type of good. Fortunately, you don’t need to have your good’s HS Code on hand, as you can find your payable tariff percentage based item keywords as well.
To ensure that your package doesn’t get stuck in customs, it is important to work with a logistics provider who is well-versed with the latest developments in customs regulations to better navigate the ever-changing landscape of customs processes.
Tariffs and Customs restrictions in different Southeast Asian countries could be challenging to navigate. Find out how with Our Customs Clearance guide!
Malaysians are fairly receptive to modern payment methods compared to other countries in Southeast Asia such as online transfers and credit card payment. However, it’s still a good idea to offer cash on delivery as a payment option.
Around 33.6% of them still prefer cash on delivery (COD) to pay for goods which is still a sizable population. In some cases, some Malaysians are wary of fraud and being able to see the product before paying for it may be a way to avoid being scammed. Other times, they may not trust placing their banking and credit card information online, fearing that their data could be vulnerable to data breaches or hacking.
To ensure a smooth delivery experience, offering cash on delivery in your payment options is worth considering when venturing into the Malaysian e-commerce market because it may help customers be more comfortable buying from you.
However, not every logistics provider supports cash on delivery because of the additional payments infrastructure and processes needed to offer the payment method. Should you decide to offer cash on delivery on your e-commerce site after weighing the pros and cons, find a logistic partner who is able to facilitate it.
With its sizable economy, high e-commerce growth potential, and well-developed infrastructure, Malaysia is a country worth expanding your e-commerce business to if you haven’t already done so.
All the steps involved in cross-border shipping to Malaysia may sound complicated but having the right shipping partners can greatly simplify things. By engaging with reliable and proficient shipping partners at every step, or even a single partner who can handle every step, you’ll be on your way to seamless cross-border shipping to Malaysia.
This is part of our ‘How to Ship to Series’
Here are our other guides you can ship to countries in SEA:
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