Capillary acquires US-based Brierley+Partners    Read more >

Capillary named a Leader in SPARK Matrix™: Customer Loyalty Solutions, Q2 2024 Report     Read more >

Anywhere Commerce+


Ecommerce in Malaysia: Growth, Trends & Opportunities

Malaysia’s ecommerce market is quickly becoming one of the largest in Southeast Asia. Its growth is outpacing that of traditional established markets in the region.


Manan Kashyap

4 Min Read

April 20, 2023

Malaysia’s ecommerce market is quickly becoming one of the largest in Southeast Asia. Its growth is outpacing that of traditional established markets in the region. The Malaysian e-commerce market looked to grow by 20% in 2022 alone. This growth in ecommerce has been coupled with a growing consumer preference for online shopping, and availability of customized payment options in recent years.


Malaysia’s tryst with Ecommerce started in 2004 with the launch of eBay Malaysia. Within a few years, two major players Lazada and Zalora launched their Malaysian operations in 2012, followed by Shopee in 2015. Over time, Shopee has grown tremendously and now attracts approximately 55 million visitors per month, making it the most visited e-commerce platform in the country. Fast forward to 2023, Malaysia’s eCommerce market is projected to touch US$ 10.19 billion, and reach $16.98 billion by the year 2027, at 13.6% CAGR. The country is now catching up to bring its e-commerce infrastructure, including product availability, payments, delivery and regulatory requirements, in line with more established online shopping markets.



Factors Spurring E Commerce Growth in Malaysia


At 89%, Malaysia has one of the highest internet penetration rates in Southeast Asia. Ecommerce growth in Malaysia is primarily driven by a growing number of digitally-savvy, middle-class people who are looking for great deals and access to international brands. Here are the other major factors driving ecommerce growth in the region.


    • Malaysian Government’s National eCommerce Strategic Roadmap: The Malaysian government is recognizing the rise in ecommerce as a tool of inclusiveness, and has announced support for empowering local micro, small, and medium enterprises (MSMEs). Further, Digital Free Trade Zones have been launched to facilitate cross-border eCommerce and widen the global market for MSMEs. This is predicted to further drive ecommerce in Malaysia.


    • Seamless Delivery Logistics: 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 Online Grocery Shopping: Similar to other countries in the region, the grocery & FMCG ecommerce is rapidly growing in Malaysia. In fact, the average revenue per user (ARPU) in Malaysia’s Grocery Delivery segment is projected to touch US$297.20 in 2023 – among the highest in Southeast Asia.


    • Digitally-savvy consumers: Malaysia boasts of an 89% smartphone penetration. More than 29.5 million Malaysians access the internet, which too is more than 89% of the country’s entire population. Malaysia’s mobile commerce growth is outpacing overall e-commerce, and is projected to become a US$8.9 billion market by 2023, with a CAGR of 19.7%.


    • The Rise in Social Media: 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 Jan 2023, Malaysia had 26.8 million social media users which accounts for 78% of its total population. This digitally-savvy, upwardly mobile segment presents a massive potential customer base for ecommerce businesses.


    • Preference for Digital Payments: Bank transfers dominate as the primary e-commerce payment method in Malaysia, accounting for 44 percent of all transactions. 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. With at least 50% of the population having used digital wallets for their daily needs in 2022, Malaysia leads Southeast Asia in digital wallet usage.



Key Ecommerce and Consumer Trends 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.



    • Transactions Across Borders: 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 countries in the list of every Malaysian online shopper include Singapore, Japan, the United States, South Korea, and China – from where a variety of products, right from beauty to electronics, are purchased and paid for via online transactions. The Malaysian government has been proactive with these concerns through digital campaigns like “Buy Malaysia” and #SayaDigital to encourage local demand and empower Malaysians to surge the country towards a digital transition.


    • 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 ecommerce transactions in the region are 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.


    • Affinity towards discounts: 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.


    • Ease of Digital Payments: Across Malaysia, bank transfer and digital wallets are the most preferred payment method. More than half of Malaysians now have an average of two cashless payment channels at their disposal and they are largely using it at food and beverage outlets, and retail stores. Digital wallets and e-wallets are fast-growing payment methods in Malaysia. The number of active e-wallet registered users has seen an explosive growth, jumping from 8.7 million in 2020 to 13.5 million in 2021, as more people turned to the method for eCommerce payments. 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 prefers COD when shopping online.


    • Social Commerce: 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.


    • Competition Between Regional & International Retailers: In the beginning of 2022, Malaysia’s most visited e-com site was Shoppee with 54.93 million visits, followed by PG mall with 22.15 million. 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.


    • Annual 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 for self-care. Besides this, Malaysia has three major annual national shopping events—Malaysia Super Sale (March 1–31), Malaysia Mega Sale Carnival (June 15–August 31) and Malaysia Year-End Sale (November 1–December 31). International discount shopping events Singles’ Day and Black Friday in November are also rising in popularity.



Malaysia’s Ecommerce Space


Malaysia’s top-three e-commerce sites by traffic are marketplaces Shopee, Lazada and PG Mall. The ecommerce space in Malaysia is dominated by self-owned, branded e-commerce websites and big online marketplaces. Here are the top ones :


How to Strategize Your Brand For Malaysian Ecommerce 


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.
  • 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. Merchants should reassure customers that they have all the resources to avoid problems like outdated payment methods, unreliable delivery and incidences of fraud.
  • Offer superior fulfilment experience –  Majority of the E-Commerce Shipments takes more than 2 days to get delivered in Malaysia except for the regions such as Klang Valley. Not many retailers are offering same day deliveries yet, even though the online shoppers expect it. And customers are willing to pay extra price for quicker deliveries. 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 centers.
  • 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, and increase conversions by personalizing marketing engagement and conversions with customers using the power of customer segmentation.


While the ecommerce market in Malaysia is nascent compared to mature markets like China and Japan, it still represents one of the largest ecommerce markets in SEA. Malaysia stands out due to its relative size in the cross-border share of the ecommerce market. Malaysia’s youth population highlights the economy’s future potential as an e-commerce market. Malaysian consumers are often looking for great deals and access to international brands, but these trends may shift away if more local brands prioritize delivering superior customer experiences, products and prices than rival international brands.


Manan Kashyap
Manan Kashyap

Manan Kashyap is a technology writer and social media consultant who loves to play the flute. After his MBA, Manan worked with Bajaj for five years after which he pursued his journey as a freelance writer with a focus on B2B SaaS.

Aauthor Name

Manan Kashyap

Manan Kashyap is a technology writer and social media consultant who loves to play the flute. After his MBA, Manan worked with Bajaj for five years after which he pursued his journey as a freelance writer with a focus on B2B SaaS.

Similar Articles

Ecommerce in Malaysia: Growth, Trends & Opportunities

by Capillary Marcom

April 20, 2023 | 4 Min Read

Malaysia’s ecommerce market is quickly becoming one of the

Contact Us

Get the best loyalty &
customer engagement platform out there!
  • Design industry shaping loyalty programs
  • Integrate easily and go live quicker
  • Deliver hyper-personalized consumer experiences
Request A Call
    [shield-notbot-nonce] => 3ca0ddc3b4
    [wp-wpml_current_language] => en