E-commerce wave is surely forming in Malaysia; supporting data from Bank Negara
Both Rakuten and Rocket Internet have helped to raise the service and quality bar
IN Digital News Asia’s year roundup show on business radio station BFM last December, my co-founder A. Asohan and I had described 2012 as the year e-commerce came of age in Malaysia.
It was not just because leading Japanese e-commerce player Rakuten had launched in Malaysia nor because Rocket Internet had also launched a number of e-commerce sites at the end of 2011 and early into 2012.
Rather, it was because there was a lot more e-commerce activity within Malaysia from the user standpoint.
Indeed, regulator Bank Negara Malaysia’s Report on Payments 2013 reveals that the total transaction value from credit cards and international debit cards (debit cards issued by non-Malaysian banks) stood at RM96 billion (US$30 billion).
More interesting is that 12% of this is attributed to Internet/ e-commerce transactions. (Table A.30 & A.31 on Pg 184 of the report above). That’s RM11.4 billion (US$3.6 billion).
And, for a recent anecdotal example, on June 18, I was a speaker at the Perdana CEO Forum and asked the 100-strong crowd during my panel discussion on whether they shopped online. Over 80% raised their hands.
Then I asked how many of them shopped on local sites and about 70% kept their hands up. Mind you, this was not a tech-inclined audience.
But then, who says you need to be interested in tech to know how to shop online?
That was a real eye-opener for me.
This wave of e-commerce that is getting stronger is no surprise to DNA readers as we have been regularly featuring news on the developments of the sector. And just this week, we had the announcement of Rocket Internet raising another US$100 million for its consumer tech portal, Lazada.
This is for the entire South-East Asian region, but you know a fair bit will come into expanding is service offerings and quality in Malaysia.
And we also had a six-month update from Rakuten Malaysia on how it has been doing. “Very well, thank you,” if you read Gabey Goh’s article.
While I am worried about how our homegrown sites will compete against Rakuten and Rocket Internet, Rakuten’s model is actually quite interesting: They enable brick and mortar merchants to get online and take a cut from any online sales that happen. So, it’s win-win.
For example, in a survey Rakuten did recently, it found that a key inhibitor for online shopping was the fear of unreliable service from merchants. In response, it has been working to create a trusted network and environment for users.
Rocket Internet, however, is out to grab everybody’s lunch by selling goods direct.
Still, the two have helped raise the level of e-commerce in Malaysia – from a service level and from a quality level, and especially from an education-level too.
So the question moving forward, for us all, is not, “How is e-commerce doing in Malaysia” or even “How well is it doing?” I think the key question to ask is, “So, are you taking advantage of this e-commerce wave that is forming?”
I wonder how many people will be interested in an online bhangra class?
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