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: 2021-11-06

The eCommerce industry in Malaysia continues to grow steadily, fueled by the COVID-19-related online services and 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.

eCommerce revenue in Malaysia reached a total of $4 billion in 2020. With an increase of 37 percent, the Malaysian eCommerce market contributed to the worldwide growth rate of 26 percent in 2020. According to GlobalData’s eCommerce Analytics, Malaysia’s eCommerce market is estimated to register 24.7 percent growth in 2021. The market is expected to reach $12.6 billion by 2024, increasing at a CAGR of 14.3 percent between 2020 and 2024.

Assessment of Current Buyer Behavior in Market

In 2021, 80 percent of the population of Malaysia’s population are active internet users (27.4 million) and mobile phone penetration is high (84.2 percent). As of January 2021, there are 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). The NESR 2.0, which was recently endorsed by the National Council of Digital Economy and 4IR, aims to support the growth of Malaysia’s eCommerce market. NESR 2.0 will be guided by three overarching objectives, namely, to intensify eCommerce adoption and growth, to enhance ecosystem development and to strengthen policy and regulatory environment.

These key objectives are aligned to the MyDIGITAL under Thrust Two — boosting economic competitiveness through digitalization and Thrust Five which aims to create an inclusive digital society.

The roadmap outlines the Government’s intervention in six areas[1]:

  • 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

See: National eCommerce Strategic Roadmap Overview

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 into a regional eCommerce fulfillment hub.
  • Grow Malaysian SMEs: The DFTZ is seen as a mode to drive export of Malaysia SMEs via eCommerce

Reference:  Digital Free Trade Zone (DFTZ)

Local eCommerce Sales Rules & Regulations

The relevant laws governing Malaysia’s eCommerce and online businesses are set out in several 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 f( or 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 (

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.

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, used items are some of Malaysians’ most popular online purchases.

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

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 percent of the cross-border transactions, and American and Chinese websites are popular amongst Malaysian consumers. Malaysia has many free trade agreements that allow foreign business access.  (

Local eCommerce Business Service Provider Ecosystem

Malaysia has high rates of eCommerce usage due to its internet and mobile connectivity. Approximately 50 percent of the population (16.29 million) are active online shoppers, and 82.9 percent of mobile users use their devices to shop online. Malaysians 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 offers by online stores.

Source: Digital Malaysia 2020

Top five purchased categories of products for 2020 are:

1.   Travel, Mobility & Accommodation: $2.65 billion

2.   Fashion & Beauty: $1.42 billion

3.   Electronic & Media: $1.17 billion

4.   Toys, DIY & Hobbies: $8.36 million

5.   Furnitures & Appliances: $5.86 million

Source: Digital Malaysia

eCommerce – Domestic Market

Malaysia’s E-commerce industry is expected to grow at an annual growth rate of 11.4 percent (CAGR 2019 -2019) and the total revenue for the entire industry is $1.31 billion. The growth is expected to grow to $2.53 billion by 2022.

Electronics and media are currently the leading product category in Malaysia, accounting for $4.77 million, followed by Furniture and Appliances, which generates $3.56 million in sales. By 2022, furniture and appliances will become the most purchased online category with an estimated value of $1.02 billion. Electronics and media, a second favorite, will have an expected worth of $6.29 million.

Source: eCommerce Malaysia Overview

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 – The most popular eCommerce sites that Malaysians 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 connectivity improvements, the increase of mobile network operators, and the growing capabilities of commercial banks offering M-Commerce services. However, there are several security challenges ahead, including the increase in cybersecurity threats and data breaches. 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 2020 are:

  • Hustlritech47 Sdn Bhd
  • 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 percent
  • Twitter – 6.63 percent
  • Pinterest – 6 percent
  • Youtube – 3.32 percent
  • Instagram – 3.16 percent
  • Tumblr – 0.29 percent

Source: Social Media Stats in Malaysia for May 2020

International merchants are increasingly establishing depots in Malaysia to expedite delivery and improve customer service and product availability in the country. Global brands are investing in Malaysian distribution hubs to expand their e-commerce footprint in the country.

To support the ecosystem, Malaysia has built around 200 industrial estates zoned and prepared for industrial development, together with specialized parks. Along with the ongoing development, the e-commerce market in Malaysia has been increasing faster than ever.