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What’s Happening in Malaysian eCommerce

Written by
Amanda Lim
Published on
April 4, 2019
Updated on
June 22, 2023

In a short span of 10 years, eCommerce as an industry has boomed within Southeast Asia. In countries like Malaysia it is not uncommon to find numerous ads from the likes of Shopee and Lazada along with Malaysians comfortable buying via various online channels including Facebook.

The onset of the COVID-19 pandemic in 2020 has contributed to the acceleration of this growth following the temporary closure of brick-and-mortar stores during lockdowns and a rapid shift to online shopping.1 Governmental prioritisation of efforts to promote eCommerce adoption has also played a role in this growth surge.2
Like its neighbouring counterparts, online shopping has made international brands accessible to more Malaysians, which they love. Despite a contraction of real GDP in 2020,3 Malaysia’s GDP per capita is the third-highest among ASEAN nations.4 Because of that, this Southeast Asian ‘Tiger Cub5’ economy is a popular choice for eCommerce merchants to expand into in order to gain a market share.

But how has this all happened in such a short span of time? What are the other considerations should you have when expanding into Malaysia for eCommerce?

A Brief History of Malaysian eCommerce

K.S. Wei and Richard Tan, the founders of Interbase Resources Sdn. Bhd., registered for a domain in 2007. They already had a business plan in place: a C2C online marketplace much like eBay Malaysia, which opened 3 years prior. These C2C platforms connect customers to trade with each other in an online environment, and eBay Malaysia was about to meet its match. That website,, has since been able to attract 9.56 million online visitors per month at the start of 2018 and is considered Malaysia’s pioneering eCommerce platform.6

Lelong enjoyed its dominance in Malaysia’s eCoommerce space for a while even as other online shops followed in the next few years. was launched by Vivy Yusof and her then partner, Fadza Anwar in 2010, and peer to peer (P2P) platform followed in 2011.

It wasn’t until 2012 when major eCommerce websites like Lazada and Zalora had launched.7 These players then introduced the idea of B2C online marketplaces to Malaysia, which opened up new doors for aspiring eCommerce merchants. Now, merchants can operate similarly to a retail store instead of selling items individually on these platforms.

Prior to the pandemic Shopee, Malaysia’s most visited online store, had nearly 29 million monthly visits in Q4 2019.8 Q4 2020 saw this skyrocket to 47 million monthly visits, with this growth likely linked to Malaysians’ change of lifestyle due to the pandemic.9

Why Expand your eCommerce Store to Malaysia?

In 2020, Malaysia’s eCommerce market value was estimated to be US$ 4.46 billion according to Hootsuite and We Are Social10 and US$ 6 billion as estimated by Google and Temasek.11 The difference between these two could be attributed to the items included in their measures.

Google and Temasek projects that Malaysia’s eCommerce economy could hit US$ 13 billion by 2025 with a CAGR of 17 per cent.12 This means it's not too late for you to join this wave and gain your share of the Malaysian eCommerce market.

Each different eCommerce website that has since opened in Malaysia can serve a specific niche. Depending on what types of products you are selling, it may make sense to list on one eCommerce platform, but not another. For instance, it may make more sense to list fashion products on Zalora and Zilingo instead of Lelong.

By listing on popular Malaysian marketplaces that fit what your products are offering, you increase the chances of capturing a larger segment of the Malaysian customer base that is right for your offerings.

Looking for a cross-border shipping partner that covers every base when shipping your eCommerce products to Malaysia?

Have a chat with us to find out how our services can help you!

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A Snapshot of eCommerce Drivers and Roadblocks in Malaysia

With a digitally savvy middle class powered by Malaysia’s eCommerce-friendly infrastructure, the recent social distancing requirements, and government policies favourable to eCommerce, Malaysia has some powerful drivers behind its eCommerce growth. It isn’t all roses however, as there are also some roadblocks that merchants need to plan around when shipping to their Malaysia-based shoppers.

A Middle Class that is Digitally Savvy, Yet Afraid of Fraud

Meet Suhaimi. Together with his wife, Hasnaa, they make about RM 61,000 (US$ 15,000) a year, falling in the same range as their  other middle-income family peers earning around RM 58,200 (US$ 14,061) to RM 131,508(US$ 31,773) per year as reported in 201912. Suhaimi is browsing online for a few toys to gift to his kids for doing well in school and came across a few listings for similar items.

According to USA’s International Trade Administration, approximately 50 per cent of the Malaysian population are active online shoppers, with 62 per cent of these shoppers primarily shopping via their phones.13 This figure is likely to be a conservative estimate as the height of the pandemic in 2020 has encouraged more Malaysians to start shopping online for the first time.14

Access to the internet is becoming increasingly common for more Malaysians like Suhaimi, with 83 per cent of individuals in the region utilising the internet according to data in 2020. This translates to at least 26 million Malaysians internet users in total with a high mobile penetration rate at 140%.15

Source: Statista and Rakuten Insight 21

One of the primary motivators for Malaysia’s middle-class to shop online is price savings. Malaysia’s middle-class income grew by 6.9% per annum16 between 2014 and 2016 but in a new study,17 it was found that Malaysia’s middle-class incomes rose by 4.1 per cent in 2019. Lingering concerns like rising cost of living18 and stagnating salaries19 matches with Statista’s 2016 finding20 that nearly half of surveyed Malaysians shop online because it saves money. For Suhaimi, shopping online allows him to compare the prices between toys and look for the best deals at any time.

Malaysia has a fairly good internet infrastructure and most Malaysians are connected to the internet. Internet user penetration is at 84% in 2020, which means at least 25 million Malaysians are online at any given moment.21

Additionally, digitally savvy Malaysians love to shop online because it gives them (in no particular order:22

  • Convenience
  • Good prices that can be easily compared
  • Wide product variety
  • Higher product quality

For Suhaimi, shopping online allows him to compare the prices between toys and look for the best deals at any time. He also looks out for the increasingly popular Singles’ Day and 12.12 Shopping days run by most eCommerce players such as Malaysia’s #1 and #2 most popular platforms, Shopee and Lazada - both which have been recording bumper visits year on year, including 2020.9

eCommerce also makes goods shipped via international shipping more accessible to Malaysians. Platforms like Shopee and Lazada, allow Malaysians to buy plenty of items overseas at frequently good discounts during promotional periods. Malaysians primarily shop from the following countries.23

  • China
  • Singapore
  • Japan
  • United States
  • South Korea

Platforms like Alibaba’s Taobao are also frequently used by Malaysians when looking for products from China. Additionally, Muslim millennials in Malaysia like to shop for Japanese brands because Japanese brands can cater to Muslim values.24

Recent events have given more reason to shop online. A recent survey by Rakuten insights in 2020 showed that in addition to providing convenience, many continue shopping online because it helps keep them safe from the pandemic while also providing better deals than physical stores. This is covered in more detail in the next section.25

After looking through numerous listings online, Suhaimi decides to hold off on purchasing for now, and makes plans to browse in a mall near his office during the weeknight to see if there’s something similar.

One reason why Suhaimi has decided to hold off from buying online at the eCommerce platform directly was because he is wary of fake listings. For one, he would browse carefully and would be suspicious of listings that use generic product pictures instead of real photos.

To ensure that the listings aren’t fake, he relies on customer reviews to see if they have indeed posted a photo of how the product looked like. Like his Malaysian counterparts, he is wary of fraud and the inability to return faulty items, which is understandable as there has been a considerable rise in fraud cases in the region.26

It seems that he found a few user reviews who posted photos of the toy’s defects and decided to skip buying from the platform until he is able to feel the product for himself. Thus, he decides to try his luck at a toy shop in the mall, perhaps the owner has imported some toys similar to the ones he found online.

Want to find out more insights like these on Malaysia? Get the latest tips and tricks in our Malaysian e-book!

2020 Guide to Entering Malaysia’s eCommerce Market

Safe-distancing Lockdowns Boost eCommerce Volume, but Strains the Economy

Many countries around the world instated lockdowns during the height of the COVID-19 pandemic in 2020, Malaysia included. The early phases of Malaysia’s Movement Control Orders saw strict lockdown restrictions enforced nationwide for a few months, with most non-essential brick and mortar stores forced to close for the duration.

According to Google’s e-Conomy Southeast Asia report 2020, over a third of 2020’s online commerce in Southeast Asia was generated by new shoppers. 80 per cent of them intend to keep shopping online when the pandemic ends.27 A survey by Rakuten insights mentioned that one of the primary reasons for this is to continue staying safe from the pandemic.28

While this was great for eCommerce volume, the pandemic weakened the overall economy. Dia Brands and Rakuten insights found that Malaysians were increasingly concerned about job security.29 Malaysia’s retail sector as a whole was also badly affected during the lockdown months.30

For eCommerce merchants, this means that while you have a larger market who is likely to continue shopping online after the pandemic ends in Malaysia, they may be more price sensitive given the current situation.

You can look out for what Malaysians have continued to buy, even during the pandemic. We’ve covered in an earlier piece on Malaysia’s 2020 COVID-19 learnings that health supplements, cosmetics and skincare, as well as fashion during Ramadan were still gaining search traffic and interest that year. For more info on products that did well in 2020, check out our Malaysia post-pandemic learnings article.

Lowered Barriers from Major eCommerce Players and Government Policies, Yet Uncertainty and Inefficiency Would Cause Bottlenecks

With established B2C eCommerce platforms continuing to perform well in Malaysia, eCommerce merchants can benefit from the ease of using popular online platforms to sell their products.

Furthermore, the Malaysian Ministry of International Trade and Industry (MITI) has released a strategic roadmap to spur Malaysia's eCommerce growth.31 The roadmap focuses on 6 thrust areas which will not only accelerate the adoption of eCommerce among Malaysians, but also facilitate cross-border eCommerce. You can find more about the MITI roadmap’s 6 thrust areas, which includes lifting non-tariff barriers on cross-border eCommerce and improving consumer protection, on their website. Alongside this roadmap, the Malaysian government also made allocations to its 2021 budget to fuel digitization in the country.32

Additionally,eCommerce merchants can benefit from the ASEAN eCommerce Trade Agreement, which allows merchants to enjoy less red tape, faster transactions, and improved logistics infrastructure between trading countries.

However, traffic congestion is still an issue for Malaysian logistics, among other bottlenecks.33 Because of this, fulfilling eCommerce orders, especially in the last mile, can be a challenge.

What Can eCommerce Merchants Do When Expanding into Malaysia?

Fortunately, some of the roadblocks in Malaysian eCommerce can be addressed directly by eCommerce merchants themselves.

To address Malaysian’s fear of fraud, online merchants can offer cash-on-delivery (COD) via the eCommerce platform or a shipping partner who can handle COD. According to Nielsen34, 34% of 45-54-year-old shoppers preferred COD even when shopping online to prevent credit card or online payment fraud from happening.

Despite the rise of digital payments, cash remains prominent as close to 10.4% of respondents in a survey conducted by Rapyd still regard cash-on-delivery as their preferred method of payment.35 This might translate to untapped market potential if your business were to skip using cash-on-delivery entirely.  You could also have a return policy in order to facilitate the return of faulty items and keep your consumer’s trust.

On the other hand, having an Online to Offline (O2O) strategy can work for larger eCommerce stores. Tactics can range from offering free samples to setting up a product reservation system for customers to try the product at a physical storefront.

eCommerce merchants should also look towards getting a trustworthy, tech-enabled shipping partner to ensure a smooth transfer of data. These types of logistics service partners are able to transfer data smoothly either through using cloud technology and work on optimising their operations towards fulfilling eCommerce orders. That way, they can minimise the chances of parcels getting stuck during the eCommerce delivery process. Some logistics partners also provide live tracking using this technology which can give peace of mind to both merchants and customers.

While infrastructural issues are outside of the eCommerce merchant’s control, the majority of online eCommerce purchases, fortunately, take place in the state of Selangor at 20%19. With developed road networks and most airports and ports located within Klang Valley, it enables international merchants to fulfil eCommerce orders a lot faster within that state.

With an increase in digital penetration in the country, a rising middle class that is digitally savvy, and continued growth as seen with Malaysia’s major eCommerce platforms, the country is sure to be a hotbed of eCommerce activity. Capitalise on this by listing in the right places and engaging in a reliable shipping partner with an extended local presence. That way, you’ll be able to make your mark in the country’s eCommerce industry.

Looking to ship throughout Southeast Asia and beyond? Contact us to find out how.
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Interested in eCommerce in Malaysia?
Find out more about Malaysian eCommerce here:
  1. GlobalData - 08 Sep 2020 COVID-19 accelerates e-commerce growth in Malaysia
  2. JP Morgan - 2020 E-commerce Payments Trends Report: Malaysia Country Insights
  3. The Edge Markets - World Bank revises Malaysia's 2020 GDP forecast to larger 4.9% contraction
  4. Statista - ASEAN countries - gross domestic product (GDP) per capita 2010-2020
  5. Investopedia - Tiger Cub Economies Definition
  6. iPrice Malaysia - The Map of E-commerce in Malaysia
  7. Investopedia: Tiger Cub Economies
  8. iPrice Malaysia - The Map of E-commerce in Malaysia Q4 2019
  9. iPrice Malaysia - The Map of E-commerce in Malaysia Q4 2020
  10. We Are Social and Hootsuite - Digital in Malaysia: All the Statistics You Need in 2021 — DataReportal – Global Digital Insights
  11. e-Conomy SEA 2020 report - Google.
  12. Department of Statistics Malaysia Official Portal
  13. US International Trade Administration - Malaysia - eCommerce
  14. e-Conomy SEA 2020 report - Google
  15. We Are Social and Hootsuite - Digital in Malaysia: All the Statistics You Need in 2021 — DataReportal – Global Digital Insights
  16. Department of Statistics Malaysia Official Portal
  17. Malay Mail - Malaysia’s income growth success story is an unequal one, and here’s why
  18. New Straits Times - 2019 Budget: Don't forget the middle income group, says academician
  19. Free Malaysia Today - Gap between rich, middle-income earners set to widen further
  20. Statista - Malaysia: reasons to buy online 2016
  21. We Are Social and Hootsuite - Digital in Malaysia: All the Statistics You Need in 2021 — DataReportal – Global Digital Insights
  22. US International Trade Administration - Malaysia - eCommerce
  23. Ibid
  24. Marketing Interactive - Young Muslim women and their love for Japanese brands
  25. Statista - Malaysia: reasons to continue purchasing online among consumers after quarantine 2020
  26. The Malaysian Reserve - Online frauds rise during Covid-19 pandemic
  27. Google and Temasek Report 2020
  28. Statista - Malaysia: reasons to continue purchasing online among consumers after quarantine 2020  
  29. Rakuten Insight - The Next Normal – Covid-19 Consumer Survey 2020 SG & MY
  30. The Edge Markets - Still no light at the end of the retail tunnel
  31. Kementerian Perdagangan Antarabangsa dan Industri
  32. Malay Mail - Lazada welcomes government’s budget allocation for e-commerce, digitalisation
  33. The Star - Tackling Malaysia's logistics challenges
  34. Digital News Asia - Nielsen sees security concerns as main barrier to e-wallet adoption
  35. Rapyd - Asia Pacific eCommerce and Payments Guide 2020
  36. Key challenges and opportunities in Malaysia's e-commerce scene | e27