A shift in consumer preferences from offline to online shopping is driving growth in the Malaysian e-commerce market, according to data and analytics company GlobalData.
GlobalData’s E-Commerce Analytics reveals that the Malaysian e-commerce market registered 15% growth in 2023 to reach MYR44.6 billion (AUD14.4 billion) as consumers increasingly shift from offline to online purchases. The market is set to increase a further 12.8% in 2024 to MYR50.3 billion (AUD16.2 billion).
“Malaysia is among the fastest-growing e-commerce markets in Southeast Asia supported by the rising internet and smartphone penetration, availability of secure online payment systems, and increasing number of online shoppers,” said Poornima Chinta, Senior Banking and Payments Analyst at GlobalData. “Furthermore, online shopping festivals such as Black Friday, Cyber Monday, and Single’s Day have also contributed to the overall growth of e-commerce in Malaysia.”
Alternative payment methods are the most preferred payment tools for e-commerce payments, accounting for 35.7% of payments in 2023.
Grab Pay and ShopeePay are the most popular alternative payment methods. They have gained prominence due to their simplicity, speed, and convenience. In addition to domestic and regional brands, global brands such as PayPal and Apple Pay are also available to consumers.
The rising popularity of buy now, pay later (BNPL) solutions is also driving the popularity of alternative payments. Some of the prominent BNPL brands in Malaysia are SPayLater, PAYLATER, and Atome. In July 2023, TikTok Shop partnered with Atome to enable customers to pay in instalments.
Payment cards and bank transfers follow alternative payments. In 2023, cards account for a 24.9% share of e-commerce transaction value. Credit cards are more preferred than debit cards due to their value-added benefits, including interest-free instalment payment options, reward programs, cashback, and discounts.
Notably, over 14% of e-commerce purchases in Malaysia still use cash, highlighting the traditional preference for cash among Malaysian consumers.
