The digital commerce payments ecosystem in Malaysia payments is set to reach $14.7 billion by 2028, according to projections from GlobalData.
The Malaysian e-commerce market is now expected to grow at a compound annual growth rate (CAGR) of 8.5% between the current year 2024 and 2028. The fast-growing ecosystem is projected to reach MYR67.1 billion (appr. $14.7 billion) by the year 2028, driven mainly by the ongoing shift in consumer behavior / preference from offline to online shopping. This, according to GlobalData, a data and analytics company.
GlobalData’s E-Commerce Analytics finds that Malaysia’s e-commerce market registered 12.2% growth in 2023 to hit MYR43.5 billion (appr. $9.5 billion), as consumers “increasingly preferred online purchases.”
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, explained that Malaysia is among the fastest-growing digital commerce markets in the Southeast Asia region. They pointed out that it is being supported by the growing overall internet and smartphone penetration, as well as the availability of online payment systems, and rising number of online shoppers.
In addition to this, Sharma said that online shopping festivals such as Black Friday, Cyber Monday, and Single’s Day have also contributed to the steady growth of e-commerce in Malaysia.
In 2016, the government in the Southeast Asian country has launched the National e-Commerce Strategic Roadmap (NESR) to accelerate growth.
The initial phase of NESR (2016-2020) established the foundation for an integrated e-commerce ecosystem, while the second phase (2021-2025) aims to boost e-commerce adoption, improve ecosystem development, and support the regulatory framewors.
Now, almost 1.51 million SMEs have adopted e-commerce during 2016- 2023, according to Malaysia Digital Economy Corporation (MDEC).
Among the payment tools, alternative payment methods are said to be the “most preferred” for e-commerce payments.
And according to GlobalData’s 2023 Financial Services Consumer Survey, alternative payment solutions accounted for a market share of 35.7% this past year.
Payment brands lie Grab Pay and ShopeePay are said to be widely-used alternative payment methods that have gained adoption because of their overall efficiency convenience.
In addition to local and regional brands, global entities like PayPal and Google Pay are now currently available in the market.
Alternative payments are followed by payments cards as well as bank transfers.
Cards account for almost 25% share of e-commerce transaction value in 2023.
And credit cards are “more preferred” than debit cards because of their “value-added” benefits they offer, such as interest free instalment payment options, reward programs, cashback, and discounts.
Sharma concluded that with the rise in consumer preference for online shopping, improved payment infrastructure, and widespread usage of payment tools, the future of e-commerce in Malaysia looks quite promising at the moment.
It is set to grow by 11.3% in 2024 to reach MYR48.5 billion ($10.6 billion).”
As clarified in the update, GlobalData’s 2023 Financial Services Consumer Survey was carried out in Q2 2023. And approximately 50,000 respondents aged 18+ were surveyed across 40 countries.
