WHILE it has been said that the COVID-19 pandemic – an unforeseen global health crisis that emphasises on physical distance – accelerated humanity’s dependence on technology, the concept of e-commerce has always been around to facilitate the needs of consumers.
Having the convenience of having a global retail directory right in the consumers’ hands, e-commerce played a significant role to ensure business continuity for companies that offer its products and services online.
All the while, giant online retailers such as Alibaba, Shopee, Amazon and Lazada continue to expand their reach as more and more people are connected to the web. Not only do we see mega-ranged shopping websites, specialised retailers have also made the move to venture online to help boost sales internationally and locally.
With this form of retail purchase becoming the norm, physical shopping malls have merely become a place of physical experience and social setting, something that e-commerce does not have the advantage of.
Even food and beverage (F&B) services are now more accustomed to being delivered to the consumers’ doorstep rather than dine-ins which is great news for online delivery brands like Foodpanda, GrabFood, DeliverEat, Uber Eats, Honestbee and many more.
With that in mind, the closure of physical stores due to lockdown and social distancing measures only caused consumers to ramp up online shopping which in turn accelerated the e-commerce market growth in Malaysia.
In a 2019 article of FocusM, it was observed that though F&B was still being actively consumed – perhaps more than retail items – the growing competition between delivery services may reduce the physical space of eateries.
According to GlobalData’s E-Commerce Analytics, Malaysia’s e-commerce market was estimated to register 24.7% growth in 2020. The market is also expected to reach RM51.6 bil by 2024, increasing at a compound annual growth rate (CAGR) of 14.3% between 2020 and 2024.
“The fear of virus spreading through cash handling and visiting physical stores amid COVID-19 outbreak has further accelerate the growth (of e-commerce in Malaysia),” commented GlobalData banking and payments analyst Nikhil Reddy.
Recognising its importance, the Government even introduced various initiatives to support the use of e-commerce among Malaysians. This includes providing free ‘cash’ in the e-wallet accounts of certain eligible Malaysians throughout the years since the pandemic first started.
Undoubtedly, this has spurred Malaysians to be more well-versed with digitalised and contactless payment systems.
In fact, GlobalData’s 2020 Banking & Payments survey showed that card payments became the most preferred method for e-commerce purchases, accounting for 40.3% share by value in 2020.
Alternative payment methods also gained prominence, with a combined share of 25.3% at the time of the survey.
“The Malaysian e-commerce market has been registering growth during the last few years, which has been further accelerated by the COVID-19 pandemic. This, coupled with the growing consumer preference for online shopping, availability of customised online payment options and government support, will further drive e-commerce market in Malaysia,” Reddy concluded. – Sept 2, 2021
