Malaysia e-commerce payments to reach $14.7bn by 2028, forecasts GlobalData. Source: Shutterstock.com

The Malaysian e-commerce market is anticipated to grow at a compound annual growth rate (CAGR) of 8.5% between 2024 and 2028 to reach MYR67.1 billion ($14.7bn) in 2028, driven by the ongoing shift in consumer preference from offline to online shopping, according to GlobalData, publishers of EPI.  

GlobalData’s E-Commerce Analytics reveals that Malaysia’s e-commerce market registered 12.2% growth in 2023 to reach MYR43.5 billion ($9.5bn), as consumers increasingly preferred online purchases.

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Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “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. 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.”

In 2016, the government has launched the National e-Commerce Strategic Roadmap (NESR) to drive growth

The first phase of NESR (2016-2020) laid the foundation for an integrated e-commerce ecosystem, while the ongoing second phase (2021-2025) aims to further intensify e-commerce adoption, enhance ecosystem development, and strengthen the regulatory environment. As a result of the implementation of the two phases of NESR, nearly 1.51 million SMEs embraced e-commerce during 2016- 2023, according to Malaysia Digital Economy Corporation (MDEC).

Among the payment tools, alternative payment methods are the most preferred for e-commerce payments. According to GlobalData’s 2023 Financial Services Consumer Survey, alternative payment solutions accounted for a combined market share of 35.7% in 2023.

Payment brands such as Grab Pay and ShopeePay are popular alternative payment methods that have gained prominence due to their simplicity, speed, and convenience. In addition to domestic and regional brands, global brands such as PayPal and Google Pay are also available in the market. 

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Alternative payments are followed by payment cards and bank transfers. Cards account for 24.9% share of e-commerce transaction value in 2023. Credit cards are more preferred than debit cards due to the value-added benefits they offer, including interest free instalment payment options, reward programs, cashback, and discounts.

Sharma concludes: “With the rise in consumer preference for online shopping, improved payment infrastructure, and proliferation of payment tools, the future of e-commerce in Malaysia looks promising. It is set to grow by 11.3% in 2024 to reach MYR48.5 billion ($10.6bn).”