Malaysia is an attractive market for eCommerce in Southeast Asia due to its dynamic economy and developed infrastructure for digital technologies. In 2021, 80 percent of Malaysia’s population were active internet users (27.4 million), and mobile phone penetration was high (84.2 percent). As of January 2021, there were 28 million social media users and 39.99 million mobile connections in Malaysia. 

Government Initiatives

The National eCommerce Council, comprised of various ministries and agencies, was established to drive the implementation of the National eCommerce Strategic Roadmap 2.0’s (NeSR2.0). Guided by three overarching objectives, the NESR 2.0 is focused on intensifying eCommerce adoption and growth, e-ecosystem development, and strengthening the policy and regulatory environment.

Digital Free Trade Zone (DFTZ)

The Malaysian Government launched DFTZ to spur growth in the digital and eCommerce sectors. Spearheaded by Malaysia Digital Economy Corporation, the DFTZ was reviewed and refocused to serve two overarching goals: 

· Creation of an eFulfillment hub: Development of KLIA Aeropolis into a logistical center to establish Malaysia as a regional eCommerce fulfillment hub

· Grow Malaysian SMEs: The DFTZ is seen as a mode to drive the export of Malaysia SMEs via eCommerce

Local eCommerce Sales Rules & Regulations

The relevant laws governing Malaysia’s eCommerce and online businesses are set out in several statutes and regulations. Those details of particular significance to eCommerce in Malaysia include: 

Communications and Multimedia Act 1998 (CMA) 

Consumer Protection Act 1999 (CPA) 

Digital Signature Act 1997 

Electronic Commerce Act 2006 (ECA) 

Guidelines on Taxation of ECommerce 

Personal Data Protection Act 2010 (PDPA) 

Trade Descriptions Act 2011 (TDA) 

Challenges

Although eCommerce in Malaysia is relatively strong, enforcing existing regulations needs improvement. Current challenges for the eCommerce industry include adopting 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.

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, and used items are some of Malaysians’ most popular online purchases. The two major Malaysian e-commerce platforms are Shopee and Lazada. 

Intellectual Property Rights

eCommerce activities and the protection of intellectual property rights fall under the preview of the Malaysian Intellectual Property Corporation (MyIPO). 

Cross-Border

Some key overseas markets attracting Malaysia’s online shoppers include China, Singapore, Japan, the United States, and South Korea. Credit cards are the preferred payment method for about 80 percent of cross-border transactions.

eCommerce - Online Payments

Online payments are increasing in popularity. Some of the leading online payment vendors include: 

· eGHL 

· iPay88 

· Paypal 

· Stripe Payments 

· Worldpay