E-commerce thumping IT shops

Transactions have skyrocketed on platforms like Lazada and Shopee, the go-to places for consumers looking for IT products

by AFIQ AZIZ / pic by TMR FILE

THE growth of e-commerce platforms is pushing brick-and-mortar businesses, including in the information technology (IT) segment, out of the market.

National ICT Association of Malaysia (PIKOM) research and publication committee chairman Woon Tai Hai said since the Covid-19 pandemic started last year, e-commerce transactions have skyrocketed on platforms like Lazada and Shopee — the go-to places for consumers looking for IT products.

This has left malls and retail shops with almost no footfall despite the easing of movement restrictions when Covid-19’s daily cases were lower than at present.

The traffic on online platforms has increased multifold as more people opt to shop online for everything from IT products to clothes and even household items.

“The pandemic has boosted the usage of technology and digital devices, driven by the new norm of online meetings, webinars, home schooling, online games and work-from-home arrangement.

“Smart home devices have been introduced like air conditioning, security systems, vacuum cleaner, entertainment and others,” Woon told The Malaysian Reserve.

According to a survey conducted by Vase.ai, Malaysians’ shopping behavior during the Movement Control Order (MCO) period was concentrated towards online platforms.

The research firm found that Shopee was the most popular e-commerce platform with 88% of its respondents preferring the platform, followed by Lazada (53%).

The sample size of the survey was more than 1,000 Malaysians aged 24 and above.

Early this year, Lazada reported an 80% increase in orders compared to pre-pandemic times with a threefold rise in small and medium enterprises registering since last year.

Woon believes the trend would continue, with a clearer outlook to be detailed in PIKOM’s next publication this month.

Commenting on the return to online learning due to the recent rise of Covid-19 cases in schools, Woon said it may not necessarily increase further spike in IT sales.

“We do not buy devices every six or 12 months,” he said.

He added that demand for better bandwidth coverage and speed will continue to grow, hence giving greater opportunity for revenue growth for the telecommunications industry over the coming months.

This will particularly happen in rural areas, and the 5G deployment is set to be the next game changer, he said.

“For brick-and-mortar businesses, especially in the digital devices and equipment industry, we strongly encourage them to include a layer of added value services and after-sales services.

“They should be part of this e-commerce ecosystem either in a small or big way,” Woon said.

He explained the transition is needed as education, including at the tertiary level, will change from a face-to-face model of the past to a hybrid model, which includes online and offline models.

“Future education curriculum will be designed and structured around this hybrid model, especially at the university level.

“The reliance on technology will grow, which is an advantage for our society especially in the rural areas where the exposure is currently limited,” he added.

Overall, Malaysia’s IT spending was expected to have declined by 8.3% last year, compared to the 8.2% growth enjoyed before the outbreak, according to the projections from London-based data analytics and consulting firm GlobalData Ltd.

The research firm predicted the country’s domestic IT spending to grow 8.5% in 2019.

The ICT sector is one of the fastest-growing sectors in Malaysia, contributing 18.5% of the country’s GDP in 2018 and is expected to reach 20% of GDP by 2020.

GlobalData Market Opportunity Forecasts reported ICT spending in Malaysia will reach US$25.2 billion (RM103.75 billion) by 2023, supported by a growing rate of digital adoption and cloud computing in Malaysia.