Malaysia - Country Commercial Guide

Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.

Last published date: 2020-08-19

eCommerce - Overview

In the past six months, the e-commerce industry in Malaysia is rapidly growing and becoming a competitive industry, especially with the current global pandemic fueled by the increase of smartphone penetration in the country.  Malaysia is now an attractive market for eCommerce in Southeast Asia due to its dynamic economy and developed infrastructure for digital technologies.

In 2020, 80% of the population of the country population are active internet users (26.7 million) and has a high rate of mobile phone penetration (83%).  As of January 2020, there are 26 million social media users and 40.7 million mobile connections in Malaysia.

eCommerce revenue in Malaysia is projected to reach a total of US$4,179m in 2020, and forecast to grow at an annual growth rate of 17.8% (CAGR 2020-2024), resulting in a projected market volume of US$8,059m by 2024. Based on the Statista report, the market’s largest segment is Fashion, with a projected market volume of US$1,206m in 2020.

The National eCommerce Council (NECC), comprised of various ministries and agencies, was established to drive the implementation of the National eCommerce Strategic Roadmap’s (NeSR) towards doubling Malaysia’s eCommerce growth rate to reach a GDP contribution of US$ 53 billion by 2020. The roadmap outlines the Government’s intervention in six areas:

  • Accelerate seller adoption of eCommerce
  •  Increase adoption of eProcurement by businesses
  •  Lift non-tariff barriers (e-Fulfillment, cross-border, e-Payment, consumer protection)
  • Realign existing economic incentives
  • Make strategic investments in select eCommerce player(s)
  • Promote national brand to boost cross-border eCommerce
  • Accelerate seller adoption of eCommerce

 See: National eCommerce Strategic Roadmap Overview

Source:  Malaysia eCommerce Statistic

The relevant laws governing Malaysia’s eCommerce and online businesses are set out in a number of different statutes and regulations. Of particular significance to eCommerce in Malaysia includes Electronic Commerce Act 2006 (ECA), Digital Signature Act 1997, Personal Data Protection Act 2010 (PDPA) , Consumer Protection Act 1999 (CPA), Trade Descriptions Act 2011 (TDA) and Communications and Multimedia Act 1998 (CMA)

The Inland Revenue Board of Malaysia created Guidelines of Taxation for Electronic Commerce.  The guidelines cover the scope of charge, the tax liability for the business, treatment of server and website, and an examination of business models.  See Guidelines on Taxation of ECommerce.

Digital Free Trade Zone (DFTZ)

DFTZ is an initiative by the Malaysian Government focused on the development of an ecosystem and a catalyst to the booming digital economy and eCommerce activities in Malaysia. Spearheaded by Malaysia Digital Economy Corporation (MDEC), the DFTZ was reviewed and refocused to serve two overarching goals: 

  • Creation of an E-Fulfillment hub: Development of KLIA Aeropolis into a logistical center to establish Malaysia into a regional eCommerce fulfillment hub. 
  • Grow Malaysian SMEs: The DFTZ is seen as a mode to drive export of Malaysia SMEs via eCommerce

 See: Digital Free Trade Zone (DFTZ)

eCommerce - Current Market Trends

Malaysia has high rates of eCommerce usage due to its internet and mobile connectivity. Approximately 50 percent of the population (16.53 million) are active online shoppers, and 62 percent of mobile users use their devices to shop online. Malaysian are mainly motivated by the quality of products, price advantages, product range, and the availability of reviews. Shoppers are influenced by exclusive deals, free shipping, convenience, and offered by online stores.

Five trends of the Malaysian e-commerce market in 2020:

  • Online shopping is poised to keep on growing
  • Payment methods will become more digital
  • Customers are willing to shop in new products categories
  • Express delivery will become the norm
  • Customers will look beyond price.

Source:  ASEAN UP Report, Top 10 eCommerce sites in Malaysia 2019, May 2019

              Digital Malaysia 2020

eCommerce – Domestic Market

Malaysia’s online market and revenue are expected to grow at an annual growth rate of 11.4% (CAGR 2019-2023). The total revenue across all product categories is US$ 1.31 billion and is expected to  grow to USD 2.53 billion by 2022.

Electronics & Media is currently the leading product category in Malaysia, accounting for USD 477.7 million, followed by Furniture and Appliances, which generates USD 356.3 million in sales. By 2022, Furniture & Appliances will become the most purchased online category, with an estimated value of USD 1.02 billion, and second favorite, Electronics & Media, will have an expected worth of USD 629.2 million.

Source: eCommerce Malaysia Overview

eCommerce - Cross-Border

Malaysia’s top countries for overseas online shopping are China, Singapore, Japan, the United States, and South Korea. Credit cards are the preferred payment method for about 80% of the cross-border transactions, and American and Chinese webshops are trendy amongst Malaysian consumers. Malaysia has a large number of free trade agreements that allow foreign business access. Malaysia Free Trade Agreement.   For more information on cross border trade, please contact Commercial Service Malaysia.

eCommerce - B2B

B2B eCommerce is one of the fastest-growing sectors for small- and medium-sized enterprises (SMEs). SMEs in Malaysia have a high adoption of advanced technologies, and Malaysia is ranked fourth among nine APAC countries surveyed in digital platform implementation and third in adopting Industry 4.0 technologies.

Nearly 61 percent of local SMEs are optimistic that the e-commerce platforms will help contribute to increased revenue growth. Sixty-nine percent of Malaysian SMEs have incorporated Industry 4.0 technologies into their operations, such as mobile payments, automation software, and Big Data and Analytics in particular, and show a significantly high adoption rate of mobile payments among Malaysian SMEs at 90 percent.

eCommerce - Challenges

Although the eCommerce in Malaysia is relatively strong, the enforcement of existing regulations needs improvement. Current challenges for the eCommerce industry include the adoption of new digital tools, cybersecurity threats, lack of digital marketing skills, limited production capacity, high logistics cost, and lack of knowledge regarding market access and regulations in cross-border eCommerce.

eCommerce - Services

Malaysian shoppers do most of their shopping through mobile phones and other digital devices. Besides marketplaces and eCommerce platforms, about a third of Malaysians still shop through social media platforms like Facebook and Instagram. Flights, hotels, food and beverages, music, pre-owned items are some of Malaysians’ most popular online purchases.

eCommerce - Intellectual Property Rights

eCommerce activities fall under the preview of the Malaysian Intellectual Property Corporation (MyIPO)-   Rights (

eCommerce – Popular Sites

The most popular eCommerce sites that Malaysian visit in 2020 are:

  • Fave by Groupon
  • Fashionvalet
  • 11th
  • Carousell

eCommerce - Online Payment

In  2020, the following are the major online payment vendors:

  • Grabpay
  • Samsung Pay
  • IPay88
  • MOLPay
  • GHL e-payment
  • Paynet
  • m2upayAlipay

eCommerce - Mobile Applications

The M-Commerce sector is growing significantly in market size due to improvement of connectivity, increase of mobile network operators, and capabilities of commercial banks offering M-Commerce services. However, there are several security challenges ahead including the increase in cybersecurity threats and data breaches. There is also a need for improvement in technologies and the level of consumer satisfaction. Overall, active mobile subscribers in Malaysia total 40.69 million, and the mobile penetration rate is high at about 127 percent. The six major mobile network providers in Malaysia are Celcom, Maxis, Digi, U Mobile, Unifi, and YES.

eCommerce - Digital Marketing

Malaysian companies are now using technologies more effectively to target a broader consumer base. Facebook, Google, WhatsApp, Instagram are the most used platforms.

  • Top Digital marketing agencies in Malaysia for 2019 are:  HUSTLRJ
  •  itech47 Sdn Bhd
  • shock media studio
  • Jumix
  • SwiveltVeecoTech Web & Ecommerce 
  • Chronos Agency
  • Black Wolf Digital
  • JustSimple
  • Silver Mouse

eCommerce - Major Buying Holidays

Malaysia has three yearly nationwide sales events:

  • Malaysia Super Sale (March 1-31)
  • Malaysia Mega Sale Carnival (June 15-Aug 31)
  • Malaysia Year-End Sale (Nov 1 –Dec 31)

eCommerce - Social Media

Social media continues to be a huge driver to influence online shopping decisions. With at least half of Malaysians buying products through social media, the channel is well-proven. The top 10 social media platforms in Malaysia include:

  • Facebook – 80.2% 
  • Twitter – 6.63%
  • Pinterest – 6%
  • Youtube – 3.32%
  • Instagram – 3.16%
  • Tumblr – 0.29%

Source: Social Media Stats in Malaysia for May 2020