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Malaysia eCommerce: 2020's Covid-19 Economic Overview and Opportunities

Written by
Benedict Leong
Published on
March 5, 2021
Updated on
June 20, 2023

Originally Published on Google Market Finder

Southeast Asia’s combined GDP makes it the fifth largest economy in the world. And with an eCommerce market worth USD62 billion—and set to reach USD172 billion by 20252— the opportunities for exporters are significant.

One of the driving factors behind the region’s exponential eCommerce growth has been the pandemic. Like many countries looking to contain the spread of the virus, the population was ordered to stay at home and avoid visiting physical stores where possible. As such, over a third of 2020’s online commerce in Southeast Asia was generated by new shoppers—and 80% say they intend to keep shopping online when the pandemic ends.1

Within Southeast Asia, countries such as Indonesia, Malaysia, and Singapore are an especially appealing prospect to new exporters—and for good reason. Indonesia is the region’s largest market, while the low barriers of entry into both Malaysia and Singapore make them useful points for companies seeking to gain a foothold and expand further. English is also widely spoken in these two countries, and their infrastructures are well developed.

With that in mind, let’s explore the Malaysian market in more detail—specifically its overall economic position, trends arising from pandemic, and ways you can start reaching its 32 million consumers.

Market Overview

With a 2019 GDP of USD364.681 billion3, Malaysia is the sixth largest economy in Southeast Asia. Even taking into the account the effects of the pandemic, the country still remains a tempting proposition for many businesses who see it as a gateway into the region as a whole.

Malaysian eCommerce

Internet penetration is 83% in Malaysia, and 96% of users also go online via their smartphones. In 2019, just under 20 million Malaysians bought consumer goods online, contributing to an impressive eCommerce market worth USD3.68 billion. According to a 2018 report by the Malaysian Communications and Multimedia Commission,4 eCommerce adoption rates are especially high around the Klang Valley—an area that comprises parts of the state of Selangor, as well as the Federal Territory of Kuala Lumpur.

How COVID-19 has affected Malaysia’s economy

While the pandemic has reduced people’s disposable income, weakened their employment prospects, and made them more cautious about spending, Malaysians have faith that things will improve. A recent survey6 revealed that 74% of them expect the economy to recover by 2021 or sooner—yet around half (46%) have indicated a shift towards choosing lower-priced brands.

With social distancing and lockdown measures enforced during the first half of 2020,7 along with 2021’s recent re-imposition of the Movement Control Order (MCO)8, many Malaysians headed online to fulfill their shopping needs. In fact, the country’s average online basket size in the first six months of 2020 was 24% higher than the same period in 2019.9 Another report 10 suggests online sales grew by 28.9% in April 2020, while the country’s overall retail sales decreased.

Even when life gradually goes back to normal, it’s unlikely these high levels of online shopping will fully return to their lower pre-pandemic levels. For example, almost two-thirds (63%) of those surveyed11 say they would prefer to keep working from home—and just 42% want to go back to the office. In other words, having an online presence is still recommended to reach Malaysian shoppers.

What Malaysians are Buying Online


Overall in Q320, the growth rate of the fashion and accessories sub-sector slowed down by 12.5%, and physical retail outlets were hit hard.12 That said, Malaysians are still buying fashion online, especially for major cultural events like Ramadan and Hari Raya—which marks the end of the holy month in April and May 2020. Even with nowhere to go, many families still wanted to look their best for the festivities13—and that’s reflected in fashion searches such as ‘Zalora voucher code 2020’, ‘Zalora promo code 2020’, ‘Baju raya 2020’ (Raya Clothes 2020), and ‘Zalora raya 2020 (Search term to find Zalora’s 2020 Raya collection)’.14


Despite the challenges created by the pandemic, Malaysians are also continuing to purchase cosmetic products—and new stores are opening to meet demand. For example, in September 2020, Cosmetics Design Asia15 reported the launch of Shopee Premium: a dedicated platform selling authentic premium products such as branded cosmetics. According to the report, Southeast Asia’s growing middle class has caused demand for premium beauty brands to overtake ‘mass market’ products15—making health and beauty one of Shopee’s best-performing categories.

Indeed, beyond a dip in March 2020, search traffic for cosmetics and two of the leading online cosmetics brands (Sephora and Hermo Beauty) remained fairly stable.16

Health Supplements

Another major trend during the pandemic has been the rising demand for vitamins and herbal supplements that help boost immune systems.17 During 2020, online supplement stores like iherb18and Guardian19saw traffic levels increase steadily, especially after the country’s partial lockdown was announced in October. 20 These kinds of supplements are also being sold on popular online marketplaces like Shopee and Lazada. It’s worth noting that both these platforms allow international sellers to sign up, so this could be a good opportunity for potential exporters.

Shipping your eCommerce Products to Malaysia

Malaysia’s de minimis rate

Malaysia has a de minimis rate of MYR500, which means imports valued below MYR500 aren’t charged import duties or taxes. 21 Overall, this is good news for cross-border eCommerce merchants looking to sell directly to Malaysian consumers, because it ensures wide consumer choice and encourages competition.

Cross-border Shipping into Malaysia

Malaysia is split into two main land masses separated by the South China Sea: West Malaysia (also known as Peninsular Malaysia), and East Malaysia, comprising the states of Sabah and Sarawak. Before expanding into Malaysia, you’ll need to develop a flexible and robust logistics plan to ensure your products can be delivered quickly and easily to customers, wherever they’re located.

While traditional delivery methods are certainly an option, bear in mind these would involve having to set up a local business entity and arrange in-country fleets and warehousing. As such, you may find a direct-to-consumer cross-border arrangement faster and easier to manage.

Your primary import gateways into the country are Kuala Lumpur International Airport (KLIA) and Port Klang (MYPKG). Both are located in the state of Selangor in West Malaysia. That makes them ideal jump-off points if most of your customers live in this part of the country—particularly the Klang Valley region, where vans or motorcycles can be used for last mile delivery. However, if your customers are located in Sabah or Sarawak, an additional domestic flight will be needed to complete the final stretch.

Another shipping option for Malaysia is to work with a regional distribution centre in nearby Singapore, and deliver your goods via cross-border trucking.


While the pandemic has undoubtedly caused significant economic disruption to Malaysia, its population remains hopeful that things will soon bounce back. The country’s rapid rise in eCommerce is certainly an enticing—and potentially lucrative—opportunity for new cross-border exporters, so long as your product and pricing are competitive.

If Malaysia is on your export radar for 2021, the lower costs of direct-to-consumer cross-border shipping make this a sound way to test demand for your offering, without overcommitting. On the other hand, if you have multiple countries in your sights, you may want to consider a more regional solution. For example, setting up a central distribution hub over the border in Singapore.

Use the insights and information in this guide to begin developing your export and logistics strategy, and be sure to explore our other export guides to the region—including Singapore and Indonesia. Google’s Market Finder tool is another useful resource you can use to help plan and develop your international expansion journey. Simply enter your business URL to identify areas of high demand for your products or services around the world, and take the next step to reaching new customers abroad.

Air, Land or Sea, our flexible shipping solutions keep your deliveries going forward
  1. Asian Economic Integration Report 2019-2020
  2. Google and Temasek Report 2020
  3. World Bank
  4. Kepios – Digital 2020
  5. Malaysian Communications and Multimedia Commission
  6. Rakuten Insight & Dia Brands
  7. Prime Minister’s Office of Malaysia Official Website – March 16
  8. Malaysian Dutch Business Council
  9. iPrice
  10. The Star
  11. Dia Brands and Rakuten Insights
  12. The Edge Markets
  13. Omnilytics
  14. Google Trends (accessed 16th December 2020)
  15. Cosmetics Design Asia
  16. Google Trends (accessed 13th January 2020)
  17. Google Trends – accessed as at 13th January
  18. Similarweb – – accessed as at 13th January 2020
  19. Similarweb – – accessed as at 13th January 2020
  20. Iherb
  21. Janio Asia