Malaysia’s tryst with Ecommerce started in 2004 with the launch of eBay Malaysia. This was followed by in 2007 – a C2C platform –  that attracts more than 9.56 million visitors per month. Lelong is credited for pioneering the Malaysian ecommerce industry and enjoyed market dominance for a few years; before it was joined by and in 2011.

The current state of Malaysian ecommerce market started taking shape In 2012 when two major players Lazada and Zalora launched their Malaysian operations, followed by Shopee in 2015. 

Fast forward to 2020, Malaysia’s eCommerce market is worth US$ 4.3 billion, and is expected to double to $8.1 billion by the year 2024;  at 14% CAGR.

Malaysia Ecommerce

  • Comparisons with Singapore: A Case of Similar Yet Different

Singapore and Malaysia represent the largest ecommerce markets in SEA. Between them, they account for more than 50% of total online retail sales in the region despite being home to just 8% of the Southeast Asian population.  

While the ecommerce markets in Singapore and Malaysia are nascent compared to mature markets like China and Japan; they stand out with respect to the relative size of the cross-border share of the ecommerce market

An estimated 55% of all ecommerce transactions in Singapore and 40% of ecommerce orders in Malaysia are cross-border orders from American and Chinese webshops

These numbers are much higher compared to Japan, South Korea and even China.  

However, there are differences between the countries when it comes to tax regulations for ecommerce platforms – Singapore is renowned for its favorable rules and regulations and extremely low rates of corruption. Items valued below US$ 320 are shipped duty-free. This stimulates cross-border e-retail shopping. On the other hand, goods imported into Malaysia are taxed more heavily and must comply with more stringent regulations (e.g. the duty-free limit is set at US$160). And while Malaysia’s much larger and younger population as compared to Singapore highlights its future potential as an e-commerce market, website localization may be more difficult owing to the country’s linguistic and cultural diversity.

Factors Spurring Ecommerce Growth in Malaysia

Ecommerce growth in Malaysia is primarily driven by a growing number of digitally-savvy, middle-class who are looking for great deals and access to international brands. Here are the other major factors driving ecommerce growth in the region.

  • Geological & Topographical Advantages 

Traditionally ecommerce players in Southeast Asia faced logistical challenges due to the fragmented topology of the region dominated by multiple islands and dense jungles. However, Malaysia is segregated into only two major parts – Peninsular Malaysia and East Malaysia; which makes ecommerce logistics a whole lot more straightforward and cost-effective. 

  • Surge in Grocery Ecommerce

Similar to other countries in Southeast Asia, grocery & FMCG ecommerce is rapidly growing in Malaysia. In fact, Malaysia ranked 2nd in Statista’s world’s fastest growing grocery market list in 2018, with only Singapore registering a higher YoY increase. IGD Asia predicts that online sales value of grocery in Malaysia will increase at a CAGR of more than 60 percent between 2017 and 2022 (

  • Digitally-savvy, mobile-first consumers

Malaysia boasts of an incredible 140% mobile penetration and 85% internet penetration. More than 26 million Malaysians access the internet and 80% of users between the ages of 16 and 64 are already shopping online.

  • Social Media Growth

The lines between social media and ecommerce are increasingly blurring, thanks to several native shopping initiatives by Facebook & Instagram. Besides, social media serves as a  great discovery and post-purchase platform for ecommerce businesses.  As of 2019, Malaysia had 25 million active social media users which accounts for 78% of the total population. This digitally-savvy, upwardly mobile segment presents a massive potential customer base for ecommerce businesses.

  • Consumer Comfort with Digital Payments

Consumers in emerging ecommerce markets typically steer clear of digital payments and tend to rely heavily on Cash on Delivery. This has been a roadblock to ecommerce growth in several regions like India, Brazil, Saudi Arabia etc, since COD imposes scalability challenges on ecommerce businesses. Malaysia is an outlier here with bank transfer and digital payments accounting for a whopping 93% ecommerce transactions and there are currently 39 businesses with an e-money license in the country, including major players PayPal, Alipay, WeChat and Google Pay.

  • Government Initiatives

The positive growth of the ecommerce industry in Malaysia will also be driven by the government’s National E-commerce Strategic Roadmap initiatives that strive to increase internet accessibility to rural areas and improve e-wallets technologies. 

Ecommerce Trends & Consumer Behaviour in Malaysia 

The Malaysian ecommerce space shares a lot of similarities with other emerging markets in SEA like Singapore, Indonesia & Thailand. However, there are some interesting cultural and region-specific nuances to watch out for. 

  • Strong Cross-border Spending

Cross-border spending is high in Malaysia and accounts for 4 out of 10 of all e-commerce transactions in the country.The major motivators for Malaysians to choose international sellers brands are:  better prices (72%), and access to items not available in the country (49%). The top three countries for cross-border sales are China (first), Singapore (second) and Japan (third). However, it should be noted that the Malaysian government has plans to announce a digital tax for cross-border e-commerce from 2020, which could impact international sellers of digital products.

  • Mobile-First Audience

Consumers in Malaysia have been quick to adapt to mobile commerce and 80% of smartphone users now use their devices to shop online. Mobile e-commerce transactions in the region is expected to reach $5.6 billion by 2021.  Within the mobile category, apps are the most preferred ecommerce channel and used for 64 percent of transactions.

  • Key Motivators: Fast Shipping & Price

A report by Paypal found that Malaysians prefer online shopping primarily to save time and 90% of Malaysians expect their purchase to be delivered within a week. The second biggest factor that attracts consumers to shop online are cheaper prices. This could likely be driven by a rising middle class who faces comparatively high taxes and stagnating wages. This also explains why ecommerce events in Malaysia like 11.11 and 12.12 that offer higher discounts (as high as 90%) drive the highest sales in the Home & Living, Fashion, Health & Beauty, Accessories, and Mother & Baby categories.

  • Digital Payments are Most Preferred

Across Malaysia, bank transfer and digital wallets are the most preferred payment method. Interestingly, credit cards are the most preferred payment method in  Penang (28%), Perlis (40%), Selangor (25%) and WP Kuala Lumpur (34%). Digital wallets, known as dompet digital in Malaysia, are the fourth most-used payment option. However, their usage is expected to grow at a CAGR of 53% by 2021, at which point it will take a 16% share of the Malaysian payments market. On the other hand, it is still advisable to offer cash on delivery (COD) as a payment method since the 45-54-year-old age group still prefers COD when shopping online. 

  • Social Commerce is on the Rise

The rise in usage of smartphones has also led to a spike in social media commerce, especially through WhatsApp and Facebook. The country is said to be the world’s fourth-largest market for social commerce adopters and a recent survey found that 87 percent of survey respondents had bought something through apps like Facebook, Facebook Messenger or Whatsapp.

  • A Battle of Regional & International Players

The Malaysian branches of two online shopping platforms based in Singapore – Lazada and Shoppee are the leading websites in shopping traffic and both have close to 20 million visitors per month. Even as these two leaders expand their product offerings and services, other regional players, such as Indonesia’s Bukalapak and Chinese players such as Taobao and Ali Express are increasing their presence on the peninsula.

  • Important Shopping Events

Malaysians shop online in preparation for major holidays, especially Chinese New Year and Ramadan. They visit multiple ecommerce platforms weeks ahead of these celebrations to compare products and prices. Shoppers look for gifts to give to their family and friends on Chinese New Year, as well as beauty and fashion products that will help them refresh their look for the year ahead. During Ramadan, Malaysians typically shop for clothing to wear at the Hari Raya Aidilfitri celebration at the end of the season.

Top Ecommerce Sites in Malaysia

The ecommerce space in Malaysia is dominated by self-owned, branded e-commerce websites and big online marketplaces. Here are the top ones : 

  • Lazada

  • Shopee


  • PrestoMall


  • Hermo

  • Zalora

  • Carousell

  • Ezbuy

  • Ebay

  • Qoo100

Strategy to Leverage the Ecommerce Opportunity

Given its population size and increasingly affluent middle class, Malaysia is easily one of the most attractive markets for ecommerce in Southeast Asia. Here are some strategies that retailers and brands can use to leverage this opportunity.

Offer a diverse product range –  Concerns around product diversity have been a constant challenge for Malaysian consumers and online sellers have the opportunity to satisfy this unmet need. The key to getting the right mix of products is to use AI-powered ecommerce platforms to understand the top products and accessories for each customer segment and dynamically personalize product pages for specific segments.

Keep a track of popular offline items – Retailers with an established brick and mortar store presence can use in store analytics software like VisitorSense to understand shopping behaviour and customer preferences and use the data to promote those items online at a better price.

Provide a wide range of payment options – While bank transfers are the most preferred payment option, retailers should also include e-wallets, credit cards, and COD to serve the wider audience.

Offer superior fulfilment experience –   Allow customers to track deliveries in real-time, so they don’t have to guess the delivery dates. The key to offering a great shipping experience is to have a centralized inventory across your stores, warehouses and other fulfilment centres.

Tap into social commerce – The COVID crisis will accelerate Facebook and WhatsApp commerce in the region and brands should use WhatsApp commerce solutions like Store2Door to engage customers in real-time and serve customers right at their doorsteps.

Understand local nuances – There are certain cultural nuances that are specific to Malaysia. It’s important to know what Malaysians like to buy, and when. Understand the customs, traditions, and holidays that influence their shopping behaviour.

Amrutha Aprameya
Amrutha is a passionate marketer with over 8 years of experience in the areas of SaaS-B2B marketing, demand generation, enterprise marketing and product marketing across Retail-tech, Conversational AI and IT management domains. As a passionate technology marketer, she loves helping SaaS companies achieve their market expansion, product adoption, brand awareness and demand generation goals. Apart from loving her profession as a tech marketer, she is also passionate about travelling and blogging.