Malaysia’s e-commerce income experienced a remarkable 10.4% year-on-year growth in Q1 2023, reaching RM291.7 billion, primarily driven by the manufacturing and services sectors. The government’s initiatives, aimed at promoting e-commerce and enhancing communication infrastructure, contributed to the impressive growth. The Covid-19 pandemic, while negatively impacting the overall health and economy, acted as a catalyst for the expansion of Malaysia’s e-commerce industry, boosting online shopping and digital transactions.
KUALA LUMPUR, 7 July 2023 – Malaysia’s e-commerce industry experienced a notable year-on-year growth of 10.4% in the first quarter of 2023, reaching RM291.7 billion. The surge was primarily driven by the manufacturing and services sectors, according to the Department of Statistics Malaysia (DoSM) in their recent report on the Usage of ICT and E-Commerce by Establishment 2022.
In 2022, the e-commerce income amounted to RM1,099.7 billion, marking a 6.0% growth compared to the previous year. The upward trajectory continued on a quarterly basis, with the first quarter of 2022 recording an income of RM264.3 billion, increasing to RM273.8 billion in the second quarter, RM274.6 billion in the third quarter, and RM287.1 billion in the fourth quarter.
The remarkable growth in Malaysia’s e-commerce industry can be attributed to the government’s initiatives aimed at establishing a regional e-commerce gateway, investing in e-commerce startups, promoting innovation through a regulatory sandbox, and enhancing communication and broadband facilities. These efforts have resulted in increased adoption of digital technology and improved economic performance.
Examining the e-commerce income by market segment, the local market segment, including sales conducted within Malaysia, recorded a substantial increase of 25.5% in 2021, amounting to RM932.7 billion. On the other hand, the international market segment experienced an 11.9% growth, reaching RM104.5 billion.
Further analysis of the e-commerce income based on the type of customer revealed significant growth in Business to Consumer (B2C) transactions, rising by 26.2% to RM308.9 billion. Business to Business (B2B) transactions also increased by 25.9% to RM713.1 billion. However, Business to Government (B2G) transactions declined by -31.0%, amounting to RM15.2 billion.
Despite the challenges posed by the Covid-19 pandemic, the e-commerce industry in Malaysia witnessed substantial growth as the restrictions and safety measures implemented to control the virus fueled a surge in online shopping and digital transactions. The pandemic has acted as a catalyst for the growth of e-commerce in Malaysia.