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Who Are Malaysia's Online Shoppers?

Katrina B. & Benedict L

Malaysia’s Online Shoppers and Their Online Shopping Behaviour

Muslim couple shopping online together, with lady happily pointing at the screen while the male holds onto his credit card

Malaysia is known for its legendary shopping seasons. And its Mega Sale Carnival is often described as the ‘mother of all sales’1, attracting locals and tourists alike and cementing Kuala Lumpur’s reputation as one of Southeast Asia’s shopping meccas.

Complementing Malaysia’s offline shopping scene is its up-and-coming eCommerce economy. Since Malaysia began experiencing eCommerce in the early 2000’s, Malaysia’s eCommerce market has grown to a projected USD 4.46 billion in Malaysia according to We are Social and Hootsuite’s Digital 2021, spurred on by 2020’s recent events.2

2020 saw Malaysia’s average online basket size in the first six months of 2020 grow by 24% when compared to the same period in 2019 during the height of the pandemic. According to Google and Temasek in 2020,3 more than a third of digital service users in Malaysia were new in 2020. Google also estimated that Malaysia’s internet economy would grow by 6 per cent between 2019 and 2020. USA’s International Trade Administration estimates Malaysia’s eCommerce growth will be 17.8 percent between 2020 to 2024.4

A few factors drive this growth:

  • The number of eCommerce consumers in Malaysia is skyrocketing to reach 21.9 million in 2020*5
  • The country is becoming increasingly affluent and is on track to attain the status of ‘developed country’ (provided that it avoids an economic plateau)6
  • It has a growing middle class, but consumers in this class face pressures such as high taxation7 and cost of living,8 coupled with stagnant salaries.9 As such, they have high incentives for pursuing cheaper sources of products (such as online sales)
  • High internet penetration at 84.2 percent with 96.7 percent of users accessing the internet via their smartphones10

*Up-to-date as of 31st March 2021

All this paints a rosy picture for eCommerce sellers, but it begs the question: who are Malaysia’s online shoppers?

An overview of Malaysia’s online shoppers

Most Malaysians are online shoppers, with four out of five of Malaysia’s internet users have shopped online in 2020.11

Surprisingly, men are just as likely to shop online as women, based on a study of the eCommerce habits12 of undergraduate and postgraduate students in Malaysia. Despite featuring more female participants, the study found that at least 50 per cent of both male and female respondents shopped once a month or more.

Primary motivators for shopping online

Researchers, such as those from Paypal and Ipsos, found that Malaysians like to shop online because doing so saves time. In their busy schedules, the convenience of having your purchases delivered straight to your doorstep is undeniable. The ease of comparing prices across platforms and even countries gives Malaysians a wider variety of items, and even price points, to choose from.

Interestingly, many Malaysian shoppers do tend to favour products bought from overseas online stores, with 40% of eCommerce purchases13 being cross-border. To find out Malaysians’ likely motivations for cross – border shopping according to research by Paypal14 are as follows:

  • Better prices (72%)

  • Access to items not available in my country (49%)

  • I can discover new and interesting products (34%)

  • Higher product quality (29%)

  • Shipping is more affordable (24%)

2020’s challenges added new statistics to this. According to Google and Temasek 2020,3 eCommerce users in Southeast Asia shopped online because:

  1. Save time and energy (47%)
  2. Decreased exposure to COVID-19 (48%)

Paypal’s finding that people around the world really love great prices seems to ring true for Malaysians as well. This love for good deals could likely be driven by a rising middle class who faces comparatively high taxes and stagnating wages.

This is likely why 11.11 and 12.12 have become some of Malaysia’s biggest eCommerce events. These events offer discounts as high as 90 per cent and achieve the highest sales in the Home & Living, Fashion, Health & Beauty, Accessories, and Mother & Baby categories. Malaysia ranked fourth in terms of top overseas countries purchasing from China on 11.11 by gross merchandise value – just behind US, Russia and France in 2020.15

It seems that Malaysians are also avid last-minute shoppers. The same iPrice analysis reports that online shopping activity was at its highest just before the day ended as Malaysians continued looking for the 11.11’s final deals.16

Looking to ship your cross-border eCommerce sales to Malaysian consumers? Have a chat with us to find out how Janio’s modular cross-border shipping services can help get your products delivered to them from end to end!

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As mentioned in Paypal’s findings, some of the products Malaysians look for overseas are either hard to find at their local stores, or are cheaper overseas or of higher quality compared to alternatives available locally. In some cases, these products are available overseas a lot sooner before they become available in Malaysia. One example would be the success of Amorepacific, a company that imports top performing South Korean beauty products for reselling in Malaysia.17

Planning their discounts

Malaysians also shop online in preparation for major holidays, especially Chinese New Year and Ramadan. They search eCommerce platforms weeks ahead of these celebrations18 in order to compare products and prices.

Buyers look for gifts to give to their family and friends on Chinese New Year, as well as beauty and fashion products that will help them refresh their look for the year ahead. During Ramadan, they look for clothing to wear at the Hari Raya Aidilfitri celebration at the end of the season.

What influences their purchase choices?

Input from friends and family is particularly important for Malaysians. Word-of-mouth referral19 also encourages brick-and-mortar shoppers to try out eCommerce. Reviews are a major factor for 71% of Malaysians’ online purchase decisions in 2019, according to research by vase.ai20.

Vase.ai’s research21 also breaks down the stimulus that gets Malaysians thinking about shopping as follows:

Online Stimuli

  • Surfing social media – 66%

  • Direct influence from friends and family – 49%

Offline stimuli

  • Shopping malls – 28%

  • Television – 21%

  • Magazines and/or newspapers – 19%

    *The percentage listed here measures how many survey respondents agreed these factors impacted their online purchase decisions

In the research, Malaysians mentioned that the most effective online stimuli are social media and eCommerce websites, followed by branded websites, apps and video websites like YouTube, Twitch and Vimeo. This is also validated to an extent by Hootsuite and We Are Social’s Digital 2021 Malaysia findings:

At the consideration stage, Malaysian shoppers tend to rely on articles and blogs, infographics and videos when deciding what to buy and where they’ll buy it from. They also actively seek out information from product reviews, compare products with their alternatives and follow product launch updates.

This means getting Malaysians to convert into eCommerce buyers requires a robust online strategy to supplement your online and/or offline store’s marketing strategies.

Thinking about expanding your online store to Malaysia? Get the latest tips and tricks in our latest Malaysian e-book!

2019 Guide to Entering Malaysia’s eCommerce Market

Where do Malaysians shop online?

It bears repeating that eCommerce has opened up international sales channels to Malaysians, allowing them to purchase products unavailable in the country. In some cases, even if these products are available in Malaysia, they may be launched earlier overseas or may even be priced lower. That’s why many Malaysians shop online on websites like Amazon or Alibaba’s Tmall and why foreign sales events like Black Friday and Cyber Monday are making their way into local buyers’ lingo.

The International Trade Administration (ITA), US Department of Commerce reports22 that Malaysians like to buy items from the following countries:

  • China
  • Singapore
  • Japan
  • the United States
  • South Korea

Locally, Lazada, Mudah, Lelong, Shopee, and 11street attract a large chunk of Malaysia’s eCommerce consumers. In terms of B2C marketplaces, iPrice’s ‘Map of eCommerce’ Malaysia* mentions the following are the top five eCommerce platforms in the country.23

  • Shopee – 47.3 million monthly web visits
  • Lazada – 14.7 million monthly web visits
  • PG Mall – 7.08 monthly web visits
  • Zalora – 1.1 million monthly web visits
  • eBay – 683,086 monthly web visits
*Using Q4-2020 statistics

Shopee and Lazada are still going strong in Malaysia — they are the only e-commerce platforms among Malaysians’ top 10 visited websites based on Alexa data, according to the We Are Social 2021 report. Both Lazada and Shopee, joined the top 10 list of apps with the most active monthly mobile users.24

How Malaysians pay for online purchases

Malaysian eCommerce consumers use a variety of payment methods, such as cash on delivery (COD), credit card, and online transfer.

Malaysia's eCommerce Payment Methods infographic - showing statistics on usage of banking apps, cash on delivery preference and percentage who make purchases on their smartphones along with a top 10 list of major online payment vendors

Sources: We Are Social,3 International Trade Administration USA,4 Entrepreneur Campfire 25

From the above results, mobile banking is the most popular method of paying for online purchases. On the other hand, the slew of new payment options like mobile payments means that these options shouldn’t be ignored either. On the bright side, the wide availability and popularity of online-enabled payment solutions means that getting payment for your products for the most part shouldn’t be too troublesome.

Interestingly, Maybank2U consistently ranks3 among the top 10 in different lists of Malaysians’ most visited websites, as well as on the top Google search queries in the country in 2020.26 This could be explained by Maybank2U’s users using the web banking service to make on-the-go online payments, including for eCommerce purchases.27 Maybank2U offers a variety of personal and digital banking services, such as Samsung Pay, Visa Checkout, transfers, a mobile wallet, and a promotions app.

On the other hand, it is still advisable to offer cash on delivery (COD) as a payment method when expanding your e-commerce store into Malaysia as 1 in 10 eCommerce transactions are paid for in cash.28 Online merchants can offer COD via an eCommerce platform or a shipping partner which supports and facilitates COD transactions. According to Nielsen29, many 45-54-year-old Malaysian shoppers preferred COD when shopping online.

This is because they are afraid of credit card scams, and they may not necessarily trust an eCommerce platform with their payment data, which brings us to the next point about potential roadblocks for eCommerce in Malaysia.

eCommerce problems for Malaysian consumers

Of course, online shopping is not entirely trouble-free. Long delivery times can discourage buyers, which is why many Malaysian online shoppers are willing to pay more2 for their purchase to arrive more quickly. Around half of the eCommerce consumers in Malaysia expect to receive products bought from local sellers within three days.30

Fraud is another—and more serious—concern. An analysis of cybercrime in social commerce transactions23 in Malaysia paints a not-so-pretty picture. Among the respondents, 9 per cent experienced making an online purchase but not receiving the product at all. Another 23 per cent experienced receiving a product that was different from what was promised.

And despite increasing adoption of cashless payment methods, 46 per cent of Malaysian consumers still distrust the security of online payments, especially when using smart devices.32 The majority—70 per cent—prefer online interbank transfers, cash, and ATMs.

However, a recent report by Mastercard showed that Malaysia is leading the way when it comes to e-wallet adoption.33 It mentioned that Malaysia has a mobile wallet usage of 40 percent, ahead of the Philippines at 36 percent, Thailand at 27 percent and Singapore at 26 percent. This was primarily driven by the COVID pandemic which boosted the adoption of contactless payment methods.

In its National eCommerce Strategic Roadmap34, the Malaysian government pointed out that the fulfilment experience can be frustrating. Many sellers make deliveries during office hours, when people are at work instead of at home. This leads to the risk of the items being returned to the seller, or to the inconvenience of having to pick up the parcel from a depot.

The government also lamented the lack of product diversity. This is partly due to the fact that SMEs in Malaysia have been slow to adopt eCommerce. By enabling more brick-and-mortar retailers to sell, the government hopes to increase eCommerce adoption, as consumers will have plenty of items and product categories to choose from.

Entering the Malaysian market

For eCommerce merchants in Southeast Asia, Malaysia is one of the most attractive markets given its population size and increasing affluence. eCommerce merchants eyeing this market can take advantage of certain opportunities through the following strategies.

  • Providing a diverse product range. Given the government’s concern about product diversity, online sellers have the opportunity to satisfy an unmet need among Malaysian consumers. One way to do this is to research the available products carried by popular sellers, and offer alternatives or related items and accessories.

  • Check out popular offline items. Find out what products are selling like hotcakes on brick-and-mortar stores, but can just as easily be sold online. See if you can make and sell those items online at a better price.

  • Offer a wide range of payment options. Think e-wallets, online transfers, credit cards, and cash on delivery. Explore virtual banking options, too.

  • Provide a superior fulfilment experience. Find reputable shipping partners and use an efficient cross-border shipping model. Allow consumers to track deliveries in real time, so they’ll never be left guessing when to expect their items.

  • Understand local nuances. Know what Malaysians like to buy, and when. Understand the customs, traditions, and holidays that drive their shopping seasons.

With the right product and an excellent eCommerce delivery experience, online merchants in Southeast Asia can capture a share of the Malaysian eCommerce market. To succeed, keep an eye out for shifting trends, and always keep learning about your consumers.

Janio provides flexible and end-to-end cross-border shipping services to help you ship to and throughout Malaysia and Southeast Asia. If you’d like to find out more about what we do, contact us via the link below:

 

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Interested in eCommerce in Malaysia?

Find out more about Malaysian eCommerce here:

References:

  1. Vision KL: Malaysia Mega Sale Carnival 
  2. HootSuite and We Are Social – Digital 2021 
  3. e-Conomy SEA 2020 report – Google 
  4. International Trade Administration – Malaysia – eCommerce 
  5. e-Conomy SEA 2020 report – Google 
  6. Asia Nikkei – Malaysia to renew push for high-income goal by 2030 despite COVID
  7. Malay Mail: The overtaxed Middle Class
  8. Worldbank.org – Aspirations Unfulfilled : Malaysia’s Cost of Living Challenges 
  9. Bank Negara Malaysia – Economic Developments in 2018 
  10. HootSuite and We Are Social – Digital 2021  
  11. Ibid
  12. E-COMMERCE ADOPTION AND AN ANALYSIS OF THE POPULAR E-COMMERCE BUSINESS SITES IN MALAYSIA | Open Access Journals
  13. JP Morgan – 2020 E-commerce Payments Trends Report: Malaysia Country Insights  
  14. Paypal: Cross-border consumer research 2018
  15. New Straits Times – Malaysia at No.4 in top countries of China’s 11.11 global sales 
  16. iPrice: Malaysians Spent an Average RM277 on Singles’ Day, 13% Increase to Previous Years 
  17. New Straits Times: More than skin deep
  18. Think With Google: How to capture Malaysians’ attention during Chinese New Year
  19. Vase AI: 2017 Online Shopping Trends in Malaysia
  20. Vase AI: 10 Trends You Must Know about the Malaysian Retail Space in 2019
  21. Vase AI: 2017 Online Shopping Trends in Malaysia
  22. International Trade Administration – Malaysia – eCommerce 
  23. iPrice – The Map of E-commerce in Malaysia (accessed at 31st March 2021)
  24. HootSuite and We Are Social – Digital 2021 
  25. Entrepreneur Campfire – 10 Best Payment Gateways for Your Online Business in Malaysia (2021) 
  26. HootSuite and We Are Social – Digital 2021 
  27. Maybank2u – Maybank E-Commerce Credit Card Facility 
  28. JP Morgan – 2020 E-commerce Payments Trends Report: Malaysia Country Insights  
  29. Digital News Asia – Nielsen sees security concerns as main barrier to e-wallet adoption 
  30. ASEAN Up – Insights and trends of e-commerce in Malaysia [market analysis]
  31. Yurita Takimin Abdul Talib, Fariza H. Rusly & T. Ramayah – Cybercrime in Malaysia: An Exploratory Study of Social Commerce Users and Fraud Victims
  32. Digital News Asia – Almost 50% of Malaysian consumers distrust of online payment security
  33. The Edge Markets – Finance – Digital payments give users more bang for their ringgit 
  34. Malaysia National e commerce Strategic Roadmap
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