Almost half of e-commerce records low income

About 46.9% of the businesses surveyed mentioned a dip in total income during the RMCO last year


THE sales of ICT businesses were still experiencing a downswing last year despite the country moving into a relaxed economic and movement restriction beginning June 10, 2020, said the Department of Statistics Malaysia.

According to the survey titled “Usage of ICT and e-Commerce by Establishment 2020”, 46.9% of the businesses surveyed mentioned a decline in total income during the Recovery Movement Control Order (RMCO) last year compared to the 62.1% and 79.6% earlier during the Conditional Movement Control Order (CMCO) and MCO respectively.

About 30.5% of the respondents said their total income did not change during the RMCO period, while 13.9% and 23% of the businesses said their income remained unchanged during the MCO and CMCO.

The survey, which was published yesterday, gathers responses from 5,502 e-commerce establishments on the impact of the Covid-19 outbreak on income and expenditure, as well as the government initiative towards the e-commerce industry.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the lower-income generated among the businesses last year was due to the slow progress of the operating environment to adapt to e-commerce and technology.

“The businesses were still busy adapting and probably procuring e-commerce infrastructure during the first MCO and as time passes, the capital expenditure for e-commerce has resulted in some form of return, causing businesses to still record lower total and e-commerce income when the nation reached RMCO phase,” he told The Malaysian Reserve.

“If we focused on e-commerce income, we opine that e-commerce income should be strong moving forward as more people are at home and are likely to purchase goods online.

“Aside from that, more businesses are more ready in terms of operating online e-commerce platforms. The only issue relates to companies that do not evolve to adapt to new technologies and stay relevant,” he said.

The survey reported that the businesses’ e-commerce income improved throughout the course of the movement restriction last year and rose 32.7% to RM896.4 billion in 2020 compared to 2019.

“On a quarterly basis, the first quarter of 2020 (1Q20) recorded RM195.9 billion and followed by RM216.9 billion in the 2Q20.

“Meanwhile, for 3Q20 and 4Q20, income for e-commerce registered RM238.2 billion and RM245.4 billion respectively,” it said.

For the entire 2020, Malaysia’s e-commerce income recorded RM896.4 billion, an increase of 32.7% compared to the previous year.

“There were 38.1% establishments operated during MCO and rose to 92.4% in RMCO. Meanwhile, 80.6% of the establishments reported that their e-commerce income remained stable and increased from the period of MCO to RMCO.

As a comparison, in the first three months of 2021, e-commerce income stood at RM254.6 billion, a 30% increase compared to last year, driven by the manufacturing and services sectors.

Chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said in view of the e-commerce income by market segment, the income of the local market segment which was generated from sales conducted in Malaysia, rose 21.7% to RM591.8 billion in 2019.

Meanwhile, sales for the international market increased 31.9% lower-income to RM83.5 billion.

“Accordingly, e-commerce income by type of customers via business-to-business increased 13% to RM449.6 billion and followed by business-to-consumer 53.3% to RM194 billion.

“In the meantime, business-to-government grew 55.7% to RM31.8 billion,” he said.