MALAYSIA AS THE NEXT FRONTIER OF E-COMMERCE BOOM
“The evolvement of e-commerce sector will put Malaysia on track as a leading ASEAN logistics hub which will place it on the global logistics map”, says the Transport Minister, Datuk Seri Liow Tiong Lai.
Yes, it is true. However, this is only one out of the hundreds of benefits e-commerce can bring to Malaysia.
E-commerce has been recognized as a critical enabler to accelerate the revenue growth for the Malaysian economy, under the Digital Malaysia Initiative. Malaysia Digital Economy Corporation director of e-commerce enablement Wee Huay Neo mentioned internet penetration in Malaysia stands at 67%, while e-commerce contributes 5.8% to the nation’s gross domestic product, just 0.6% below the target set for 2020.
“Malaysia’s e-commerce market will continue to be highly attractive with plenty of room to grow. The increasing consumer spending, the growing number of internet users and the greater acceptance of mobile e-commerce are the main drives,” she told SunBiz.
First of all, let’s explore the Malaysian online shoppers by looking at few interesting e-commerce statistics:
- The most popular types of products purchased by Malaysians online are fashion & beauty products, electronics, and sports products.
- 80% of shoppers use their smart phones for purchasing online
- The main factor Malaysians consider when shopping online is the price
- Nowadays, men tend to shop more than women
- 59% of Malaysians shop online at least once a month
- 95% of Malaysian population are satisfied with online shopping experience
LAZADA | The advice of e-commerce leader in Malaysia
Malaysia is one of the key markets for Southeast Asia’s largest e-commerce website Lazada and the nation has demonstrated the fastest growth within countries that Lazada operates in for the last seven months, posting over 100% jump year-on-year in gross merchandise value, said Lazada Malaysia CEO Hans-Peter Ressel.
“In a market like Malaysia, with its high internet and smart phone penetration, these are the right fundamentals and pillars to make it (e-commerce) boom even further. We’re now at a nice environment that’s flourishing.
“All the enablers for successful e-commerce operations are in checked for Malaysia. It’s a market where we can roll out new initiatives because it’s a sophisticated market,” Ressel said.
It said Lazada’s website received an average of 29 million visitors on a monthly basis while 11 Street received nine million visitors monthly.
“These three top e-commerce companies were all founded in South-East Asia.
“Although e-commerce websites originating from outside the South-East Asia region such as eBay and Sephora are also accessible to Malaysians, regional or locally based e-commerce sites seemed to be more successful, probably due to their on-the-ground knowledge which gives them a higher advantage,” it said.
The main suggestion of Lazada to the e-commerce businesses in Malaysia is winning on mobile devices as people use mCommerce more and more. Why? Let us explain you!
M-COMMERCE | New Trend
According to Digital News Asia, South-East Asian online payment gateway provider iPay88 Sdn Bhd said that based on transactions recorded on its platform, it expects mobile-commerce to grow three times faster than the overall e-commerce market in Malaysia. The company claims that about 70% of online transactions in Malaysia take place on its platform.
It was also mentioned that the growth of m-commerce is clear, given the percentage of traffic from mobile channels recorded in its system: 27% in 2015; 38.4% in 2016; and 48.6% in 2017.
“No doubt, the availability of cheaper smart phones and laptops have made the Internet accessible to a whole new demographic. The advent of tablets and smart watches has also broadened the spectrum of Internet usage.”
“Besides the high proliferation of smart phones, new Internet business models such as those from Grab and Uber that leverage on mobile booking and transactions … are also expected to drive m-commerce volumes,” iPay88 representatives state.
A survey on mobile online shopping last year ranked Malaysia third in terms of mobile shopping growth rate in Asia, at over 20%, from 25.4% in 2012 to 45.6% in 2014. Many popular international online stores including Amazon, Apple, Walmart and Google Play have recorded an increasing number of consumers purchasing on their mobile.
Customer Insights | What Malaysians think about e-commerce
The lack of security is perceived as a major stumbling block for doing business online. Electronic cash payment systems are becoming more important than ever to facilitate online transactions and thus replacing traditional payment methods such as checks. The security aspects of e-commerce technology are one of the key concerns for Malaysian online buyers nowadays.
Every buyer wants to have privacy and security in the transaction. The personal data of the buyer such as name, address, phone number and also the transaction details of the buyer must not be disclosed to third parties. There is also some activities of sharing the info to the third party which is illegal. Malaysia has implemented personal data act on 2010. The Personal Data Protection Act (PDPA) is an act enacted by the Malaysian government to protect individual’s personal data in online commercial transactions.
Other important factors taken into account by Malaysians have been presented in the Malaysian Journal of Social Sciences and Humanities by Nadiah Binti Tasin:
Besides, speaking particularly about M-commerce, another issue is presented with the lack of user experience (UX) for mobile interfaces. M-payment gateways still do not fully provide an interface that can be customized to suit the mobile apps user interface and also user experience.
User Experience (UX) in mCommerce | Useful Tips
The full guide for the development of excellent UX experience can be found in our previous article, “UX in Mobile Apps”, while here we will provide the summary of those points:
Creating a minimalistic design of mobile app makes the whole experience much easier — just click that button! A minimalist concept is a powerful form of communication, an easily navigable and simple application can be developed using minimalist concept. Users today like more and more simple interface hence shifting to very basic UX and just keeping the necessary elements.
- Simplistic Color Scheme
Simplistic color scheme is key to happiness. In the case of mobile application development, a solution. Clean and clear color theme enhances the user experience, but on the contrary, too many colors spoil the game and bring negativity in the overall design. Well, putting a restriction on color pallette does not mean that you design app in monochrome, but the idea is to use necessary colors which could accurately depict your design and create a hierarchy.
The personal approach is something that every individual appreciates in offline activities. When using their smart phones, an app user wants to get the same attitude while doing online shopping or reading news. Nowadays, mobile app developers record users’ steps and customize their experience according to the in-app stroll. Consumers don’t have to search for the same information over and over again while receiving individual push notifications.
- Better Security
Here we are talking about a really important security factor when it comes to personal data. Such applications as Apple Pay or Dropbox have Touch ID verification. This provides users with a higher level of security for their personal data, also creating a feeling that your company is taking care of them.
We live in a time where half of the population is digital buyers, which is why e-commerce is an important stepping block for the future of existing businesses while opening up market access. Malaysia’s e-commerce market will continue to be highly attractive with plenty of room to grow. The increasing consumer spending, the growing number of internet users and the greater acceptance of mobile e-commerce are the main drivers.
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