E-commerce sector expected to grow up to 30% next year

The positive growth will be driven by govt initiatives to expand the country’s broadband across rural areas


THE local e-commerce industry is expected to grow up to 30% next year, supported by advancement in technology and wider access to virtual buying platforms.

E-commerce Malaysia chairman Ganesh Kumar Bangah (picture) said the positive growth of the industry will also be driven by government initiatives to expand the country’s broadband across rural areas.

“Currently, we are seeing more people buying online and trusting e-commerce sites. More merchants are also starting to sell their products online,” he told reporters after FPX MyCyberSale Asia’s appreciation day in Kuala Lumpur last Friday.

Accessible facilities to rural areas also provide opportunities for most Malaysians to shop digitally, thus enabling the e-commerce industry to grow rapidly.

“Another driver of the growth will be the government’s initiative on e-wallets, which will further strengthen the growth of a secure and seamless e-commerce industry.

“I believe that’s the organic growth of e-commerce and it will continue its momentum as the economy continues to grow,” Ganesh added.

Improved logistics capabilities and growth from the small and medium enterprise (SME) segment will also encourage the industry to maintain its expansion trajectory.

“SMEs are getting better at selling their products online. They are getting smarter and spending on the right avenues such as digital marketing and influencers,” Ganesh said.

Meanwhile, online banking e-commerce transactions have achieved an inflection point in Malaysia, he noted.

“Hence, for next year, we foresee a trend of more people buying local products on e-commerce platforms, as well as an increased number of consumers from rural areas,” Ganesh said.

FPX MyCyberSale Asia generated a 20% increase in growth, with a gross merchandise value (GMV) of RM392 million and RM2.8 billion in online banking transactions.

The National Tech Association of Malaysia chairman Danny Lee said the sale also saw 1,510 registered merchants and the inclusion of Taiwan as the first country pavilion of MyCyberSale, which had paved the way for regional participation.

“For 2018, the e-commerce industry’s revenues stood at RM115 billion with a compound annual growth rate (CAGR) of 11%. From that value, over 20 million online shoppers were direct contributors,” he said.

The government, in turn, has consistently given its full support to boost Malaysia’s e-commerce industry.

“This can be seen in the measures that the government has undertaken via the National E-commerce Strategic Roadmap. In fact, all these moves have positively impacted the CAGR,” he added.

The export GMV for the MyCyberSale also rose by 38%, contributed by transactions from travel, fashion and entertainment categories that served 35 countries.

This is a good indication that merchants are seeing the importance of cross-border e-commerce, Lee added.

“The Commerce Development Research Institute of Taiwan has brought in more than 60 Taiwanese merchants, representing 2,400 brands and it sold over 35,000 products within that 10-day period.

“Payments Network Malaysia Sdn Bhd through its network of banks has also secured the participation of 30 banks and introduced seamless cashless payments for all merchants that joined MyCyberSale this year,” he said.

MyCyberSale, established in 2014 by Malaysia’s e-commerce ecosystem, has opted to be more regionally focused this year.