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This is part of a broader series of resources on the Malaysian eCommerce scene. To find out more, head over to our Guide on Malaysian eCommerce insights and shipping tips!
For many Malaysians, using the internet has become a huge part of their daily lives. In 2020, half of the internet users in the country spend about 5 to 12 hours on the internet per day, which is a 13% rise compared to 37% observed in 2018.1 Almost one in four use some of this time to fuel the eCommerce economy as online shoppers, or eCommerce consumers. 2
Being cooped up at home for extended periods during lockdown has also resulted in increased internet usage, as established from the spike in internet usage hours by approximately 23% when stay-at-home measures were enforced.3
You can also find more detailed information about how COVID-19 affected Malaysia’s eCommerce industry in our collaborative article with Google.
Malaysia’s government has also been implementing policies to aid eCommerce. They spearheaded the National eCommerce Strategic Roadmap (NeSR).4 Developed in 2016, this initiative includes programmes such as transforming Malaysia into a regional eFulfillment hub and refining Malaysia’s last-mile delivery network.5 On top of this, the region continues to place emphasis on economic digitalisation by channelling US$242.5 million (RM 1 billion) to drive a new Industry Digitalization Scheme.6
With the accelerated adoption of online shopping brought about by social distancing measures implemented during COVID-19, as seen from the rise in online sales by 28.9% in April 2020,7 Malaysia is indeed still a lucrative market for eCommerce sellers. And when online merchants take the time to understand their market and consumers’ buying patterns, they improve their chances of serving their customers well.
For online merchants, it’s always good to know the demand for your product when assessing a new market to enter. While sources may differ on which products are the most popular when it comes to Malaysian eCommerce, it’s generally agreed that the three most popular categories in this market are:
Data from Hootsuite and We Are Social has listed the “Electronics and Physical Media” category as the second largest segment in eCommerce spending at $1.17 billion among consumer goods, only second to fashion and beauty by a difference of about 17.6%.12 In 2021, market revenue is expected to hit US$1.131 million, with average revenue per user at US$144.02.13
According to iPrice’s report, online shoppers in the country are willing to spend on electronics for personal or office use, including smartphones.14 Xiaomi was hailed as the best selling smartphone brand during both Lazada and Shopee’s 12.12 online sale campaigns in 2020. Samsung, Realme and Oppo phones also proved to be popular, taking up the top 5 spots in the same Lazada and Shopee virtual sale events.15
The most popular consumer electronics items for Malaysian e-commerce consumers range from cables and converters, home appliances to devices of international brands like Lenovo, Xiaomi and Microsoft according to iPrice.16 As further testament to the demand for this category, Shopee’s 2019 9.9 shopping festival saw a considerable amount of sales in home appliances like pressure cookers, air fryers and electric ovens.17
Statista reports that in 2020, that revenue in the fashion category is expected to reach US$1,831 million in 2021 with apparel taking up the largest portion of the pie with US$1,153 million in market volume. By 2025, projected market volume will reach US$3,547 million for the segment.18
Despite the projected rise in figures, the overall growth rate of the fashion and accessories sub-sector slowed down by 12.5% in Q320,19 as brick and mortar retail stores were dealt hard blows following the onset of the COVID-19 pandemic.
When it comes to fashion, Malaysians have no shortage of online purchase options. iPrice reports that apart from the usual Shopee and Lazada, PG Mall and Zalora also get a good chunk of monthly visits from Malaysian shoppers. All of these online shopping sites rank in the top 10 of iPrice’s top visited online stores in Malaysia.20 During Ramadan, Nearly half of these online fashion buyers were young, single, and female.21
Local Malaysian fashion brands also tend to be more popular than regional and even international players, and Instagram is the best springboard for driving sales.22 Hijab fashion is also profitable; during Ramadan in 2018, three local fashion e-commerce platforms garnered the most searches: Fashion Valet,23 Muslimah Clothing24 and Naelofar Hijab.25
Male fashion is also very popular, with Shopee survey respondents saying their main online buys are:26
When preparing for Hari Raya, women’s top buys include men’s clothing and shoes as well.27 This is driven by Malaysians’ penchant for buying gifts for friends and family to help celebrate cultural festivals.
In spite of the social distancing measures enforced to curb the spread of the COVID-19 virus in 2020, many still strived to look their best for festivities.28 This is apparent from the numerous searches which included keywords 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).29 Merchants can rest assured that fashion will still have a place in Malaysian consumers' shopping carts.
Under Personal Care, Health & Beauty products are widely popular, making up the majority of sales during Shopee’s 9.9 sale in 2018.30 Shopee’s 11.11 online sale campaign in 2020 also saw a considerable number of over 155,000 in beauty and personal care products being sold.31 While search traffic for cosmetic products have experienced a downtrend, search volumes for keywords relating to “skin care” are growing.
“Maskne” a term used to refer to rash or acne breakout when one wears a mask for an extended period displayed a 54% year-on-year hike in searches in fashion in 2020 as it has become a common problem associated with the implemented COVID-19 mandatory measures.32
However, one cannot conclude that cosmetic products are becoming increasingly irrelevant solely from the decline. The launch of Shopee Premium: a dedicated platform selling authentic premium products like branded cosmetics is indication that the usage of these products is still prevalent. Driven by the demand of Southeast Asian’s growing middle class, premium beauty brands are expected to overtake ‘mass market’ products, rendering health and beauty as one of Shopee’s better-performing categories.33
Search traffic for cosmetics in Sephora, a major online cosmetic brand, remained fairly stable apart from a dip in March 2020,34 demonstrating the category’s sustainability in this unprecedented time.
To combat against the heightened risk of virus transmission, demand for vitamins and herbal supplements that aid in boosting system immunity have also been on the rise.34 Virtual supplement stores like Guardian36 and iHerb37 have experienced surges in traffic levels, especially after the country’s partial lockdown which was announced in October.38
Malaysians are not averse to buying food deliveries and groceries online.39 Case in point: Malaysians collectively bought more than 27 tonnes of Milo in the first two hours of Lazada’s 11.11 sale in 2018.40
Up till 2020, Milo still remains as one of the top sellers during shopping festivals of the like - with 120 packs being purchased every minute in the morning of the 12.12 Shopee online shopping festival.41
In fact, online grocery sales in Malaysia ballooned as a result of the pandemic. A prime example was during the pandemic’s earlier stages in March 2020 when panic buying resulted in a 600% spike in orders being recorded in a day.42
Highly patronised local online grocery platform, MyGroser, has also experienced surges in demand by over 1000% during the first part of 202043 and is looking to expand their operations within the territory.44
It’s also important not to overlook Mom & Baby categories, as well as Kids & Toys. Keep in mind that Nintendo Switch and Lego were among the top 20 Google shopping queries in Malaysia in 2018.
Sales of baby clothing and blankets increased by 83% and 266% respectively in a study that compared Malaysians’ online buying behaviour 30 days before and after the imposition of the Movement Control Order (MCO) by the government.45 During Singles’ Day in 2019, diapers were among the most popular items, with enough diapers to last one baby 12,002 years sold in total during the campaign.46
In fact, a report on Shopee users in 2019 shows that buyers in the areas of Kelantan, Pahang and Terengganu mostly bought items for mothers, kids, and babies. The report noted that “diapers, baby rompers, playmats and breast pumps” were the most purchased items.47
Interestingly, data shows that men are thrice as likely to buy e-commerce baby goods if their income exceeds RM 7,000.48
Malaysian eCommerce consumers are attracting online merchants from around Southeast Asia. Hungry for domestic and overseas products, they shop online regularly for a myriad of items, chiefly fashion and beauty products, electronic goods and media, household items and groceries, and even furniture.
It is important to find the right partner able to bridge the gap between seller and buyer, not only within Malaysia but across all of Southeast Asia. Given that 40 per cent of all Malaysian eCommerce is cross-border49, finding a competent service provider with cross-border capabilities and customs know-how makes international shipping for eCommerce a much smoother and pain-free journey.
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