Among the member states of the Regional Comprehensive Economic Partnership Agreement (RCEP), Malaysia, one of the ten ASEAN countries, has attracted attention with its favorable economic development and rich cultural resources. Among the three new TikTok Shop sites in Southeast Asia recently, there are Malaysian sites, which shows its emphasis on and optimism about the Malaysian e-commerce market.

In addition, according to the latest circular issued by the ASEAN Secretariat, the custodian of the Regional Comprehensive Economic Partnership (RCEP), Malaysia has officially deposited the instrument of ratification with the ASEAN Secretary-General. According to the provisions of the agreement, RCEP will come into effect for Malaysia from March 18, 2022, and China will also implement the RCEP agreement tax rate with Malaysia from March 18, and the cross-border e-commerce is obviously good.

What are the market characteristics and potential of such a booming e-commerce market?

01 The scale of e-commerce continues to expan

In recent years, the size of the Malaysian e-commerce market has grown rapidly, ecommerceDB predicts that by 2027, the size of the Malaysian e-commerce market will reach 17.539.4 million US dollars, with an average annual growth rate of 13.6%, far higher than the global average growth rate.

At present, Malaysia's e-commerce is in a booming stage, ranking first among the Regional Comprehensive Economic Partnership (RCEP) member states. According to JP Morgan's forecast, the Malaysian mobile e-commerce market will continue to grow at a compound annual growth rate of 19.7% in 2024.

03 High Internet penetration

Malaysia has one of the highest Internet penetration rates in Southeast Asia, with 89.6% of its 32.98 million population being Internet users. At the same time, there are 30.25 million active social media users, accounting for 91.7% of the population. Currently, more than 26 million Malaysians use the Internet, with 80% of those aged between 16 and 64 using online shopping platforms.

Under the influence of the epidemic, consumers spend more time on the Internet, creating good conditions for the development of the e-commerce market, and Malaysian consumers have become more and more accepting of cross-border e-commerce consumption.

The main group of e-commerce consumers in Malaysia is 25-34 years old, and this group has a certain economic ability; Malaysian consumers are also becoming more accepting of cross-border e-commerce spending, with more than half (52%) of Malaysian online shoppers making cross-border purchases, according to a JP Morgan report.

04 TOP10 e-commerce platforms with page views

According to iPrice2021 Q4 data, Shopee, Lazada, PG Mall lead in App downloads and website traffic, followed by Zalora, GoShop, Qoo10, Decathlon, Applecrumby, Sephora, eBay.

05 TOP3 cross-border sales categories

Understanding the shopping needs of Malaysians is an essential step for sellers to enter the market. While the needs of customers vary from country to country, our data shows that the most popular categories in the Malaysian market are consumer electronics and entertainment products, fashion and beauty, food and personal care.

In addition, on Google in 2019, the most popular search terms in Malaysia showed local consumers' preference for electronics, fashion goods and toys.

(1) Consumer electronics and entertainment products

Statista estimates that consumer electronics will account for a larger share of Malaysia's e-commerce revenue by 2020. It is expected to grow from $558.1 million in 2017 to $1.1 billion in 2024.

In 2020, the market revenue is expected to reach $923.6 million with an average unit price of $96.39.

According to iPrice's research, the most popular consumer electronics products among Malaysian online shoppers include USB cables, mobile power supplies, and household appliances such as food mixers.

According to the same report, online shoppers in the country also like to buy laptops, mobile phones and tablets. Samsung is one of the most popular mobile phone brands in Malaysia, and Xiaomi and Huawei phones are also popular, especially during promotions such as 11.11.

(2) Men's and women's fashion

Statista reports that in 2019, Fashion revenue reached $874.5 million. This figure is expected to reach $1 billion in 2020 and $1.4 billion by 2024.

Men's fashion is also popular. Shopee's survey data shows that their main purchases are: clothing, accessories, footwear, bags and purses, and Muslim goods.

In preparation for Hari Raya, women's hot purchases also include men's clothing and shoes. This is influenced by the Malaysian culture of buying gifts for relatives and friends.

(3) Food and personal care

According to the data, online grocery sales in Malaysia increased by 88% in 2017. Between June 2017 and June 2018, sales of FMCG on Malaysian e-commerce platforms increased by 50%.

Within the personal care category, health and beauty products are widely popular.

06 High similarity between Chinese and Malaysian cultures

The total population of Malaysia is about 32.2 million, of which the Chinese population accounts for more than one-fifth of the total population, and most of them are proficient in Chinese and English, based on a certain degree of language/cultural similarity, it is not difficult for Chinese sellers to enter the Malay market. In addition, although the local Chinese do not account for the majority, but the middle class accounted for up to 40%, the average income of the Chinese is higher, the consumption power is also strong, willing to spend money to give themselves the best choice, very conducive to the e-commerce brand in Malaysia to take root.

Malaysia is a multi-lingual country, such as English, Malay, Chinese. Malay is the official language of Malaysia and Brunei, as well as one of the official languages of Singapore. Malaysia is close to Indonesia, India and even the Middle East, and has close demographic intersections with these regions, and Malays and Indonesians have more in common.