iPay88 sees e-commerce growth in 2017 doubling over 2016
By Karamjit Singh January 22, 2018
- US$1.67bil sales more than double the US$761mil recorded in 2016
- mCommerce to lead in 2018 on back of x3 growth over desktop transactions in 2017
E-COMMERCE in Malaysia is picking up pace with total transactions and sales for 2017 doubling over 2016 according to data from leading Asean online payment solutions provider iPay88 Holding Sdn Bhd (formerly known as iPay88 Sdn Bhd), an NTT Data company.
Over the past 12 months of 2017, iPay88 recorded 58.5 million online transactions moving over its payment gateway systems, an increase of 53.1% from 2016.
The total sales of these transactions amounted to a US$1.67 billion (RM6.6 billion), more than double from US$761 million (RM3 billion) in 2016.
Of the 58.5 million transactions performed, the month of December was the most popular month with over 6.7 million transactions recorded.
Note that the data does not represent total e-commerce in Malaysia, only the transactions from merchants who use the Malaysian-based payment solutions providers’ online payments solution.
However, as a dominant player of Malaysia’s online payment system transactions, iPay88’s annual findings offer a good representation of the country’s e-commerce pulse, as well as the direction that online payments and shoppers are trending towards.
Mobile transaction growth
Executive director of iPay88, Chan Kok Long (pic) draws attention to the increasing number of mobile transactions in Malaysia.
“In January 2017, we recorded a little less than two million mobile online payments. Fast onward to December 2017 and this number shot up to 3.5 million mobile transactions.”
In stark contrast to the growth of mobile, iPay88’s data reveals that desktop-based transactions stagnated at between 800,000 to 1.2 million transactions per month in 2017.
As expected, online banking remained as the preferred method of e-commerce purchases on the back of rising purchasing power of Malaysian consumers as well as the rapidly expanding smartphone penetration across the country.
“In line with the m-commerce trend, we will see more creative mobile applications being launched for the online shopper that combine location services + retail customer intelligence + payment solutions + social media experience,” predicts Chan.
iPay88 statistics show that m-commerce picked up since Q1 2015 where desktop transactions were double that of mobile transactions. Subsequently in Q1 2016, mobile transactions were on par with desktop transactions.
“Mobile commerce became prevalent from Q2 2016, and started overtaking desktop e-commerce. Our system saw a record high of 9.3 million mobile shoppers in Q4 2017, three times the desktop traffic.”
Smartphone penetration is still on a rising wave in Malaysia. According to a 2017 report by comScore, Malaysian digital users between the ages of 15 to 24 mostly accessed the Internet via mobile only, while those from 24 to 35 were multi-platform (desktop and mobile) users.
“iPay88 is taking advantage of this trend by continuing to plan for more ingenious and easier payment applications that can be downloaded and utilised via the smartphone – for both seller merchants and buyer consumers,” he adds.
Biggest growth areas for online retail (B2C)
iPay88’s data also shows some interesting trends that indicates that the biggest growth in online retail between 2016 and 2017 are as follows:
- Transportation services: 276% increase
- Personal and Skin care: 179% increase
- Delivery services: 177% increase
- Virtual/Instant Services (VOIP, SMS, Prepaid, Top Up): 159% increase
“Transportation is becoming a major segment of the online business-to-consumer (B2C) market. This is not unusual, considering that there has been greater usage of mobility services apps such as KTM – an inter-state transport alternative in Malaysia,” says Chan.
Meanwhile, in 2018, Chan expects stiff competition for conventional retail companies that have not invested in digital versions for their retail channels.
“Online shops will continue to thrive and even more so as they participate in marketplace initiatives such as the Pikom-organised #MYCYBERSALE 2017 that generated a total of RM311 million in total sales in just five days,” he shares.
Online banking overtakes credit card
An interesting highlight from the observation of iPay88’s data is the obvious preference of online banking over credit cards for online payments.
Between the months of January to December 2017, credit cards accounted for between 1.3 – 2.4 million online payments each month. In comparison, there were between 2.5 million – 4.4 million online banking payments each month.
- iPay88 attributes a few contributing factors to the preference for online banking:
- Online banking does not involve credit interest
- Online banking systems and option have become prevalent and easy for users
- Online banking is available to non-credit card holders
“It is not to say that credit cards are becoming obsolete for online payment and shopping in Malaysia. However, the choice of online banking is more attractive now and it is also generally positive because it advocates the habit of spending what you have in the bank, rather than buying on credit,” he concludes.
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