Online Shopping Is the ‘New Normal’ in Malaysia


By UOW Malaysia KDU

Malaysia’s movement control order (MCO) might just have changed the face of e-commerce in the country for good.

Implemented on 18 March to stem the COVID-19 pandemic, the nation-wide halt to all non-essential business, travel and activities was extended over a two months phase until restrictions were relaxed on 4 May with a conditional movement control order (CMCO).

With travel restrictions forcing most people to stay at home, the corresponding surge in e-commerce – thanks to its value, choice and convenience – has led to some interesting insights.

In a recent online survey conducted by UOW Malaysia KDU School of Business during the first three phase of the MCO. The survey showed that, 55% of the respondents had a high perceived value of online purchases and 43% said they were willing to pay more for online purchases during the period.

While 16% of the 2,163 respondents did not purchase anything online during the MCO, a staggering 50% made at least one online purchase in the last seven days.

“As the MCO brought most physical businesses to a halt, consumers’ online purchasing behaviour – including through websites, mobile applications and social media – has been further revolutionised,” said Dr Brian Wong, the UOW Malaysia KDU Head of Business school.

“The surge in purchases of online groceries shows that consumers’ behaviour has changed as physical shopping can be a hassle due to the long queues at supermarkets and precautionary measures taken to prevent the spread of COVID-19.

“With the restrictive conditions on movement, it is understandable that food delivery has been the top item purchased online during the MCO period,” he added.

The other top items purchased during the survey period include electrical goods, electronics, fashion, health and beauty items as well as home and lifestyle products.

In addition, 76% of the respondents said they were willing to pay a 5% premium on online purchases for three key reasons; convenience, value and benefits.

Shopee was found to be the top platform for online purchases during the MCO, with Grab Food coming in second and Lazada a close third. When it came to purchases on social media platforms, Facebook and Instagram were the kings.

The survey’s findings are hardly surprising.

In a statement issued last month, Commerce.Asia founder and executive chairman Ganesh Kumar Bangah said e-commerce remains one of the few industries which continued to thrive during the MCO, predicting a permanent change in consumer behaviour as many are expected to continue purchasing through digital marketplaces even after the MCO is lifted.

Aiming to empower SMEs with the technology, partnerships and business models that will help them generate new revenue and profit from e-commerce, Commerce.Asia has a database of over 8 million SMEs in 7 countries in the ASEAN region.

Stating that online shopping is now the “new normal” as the COVID-19 outbreak has resulted in e-commerce businesses booming globally, Ganesh noted that the MCO has led Malaysian consumers accelerating its shift towards online platforms.

“We are seeing significant growth in our merchants’ sales across various product categories. This change in buying behaviour shows that Malaysians are adapting to the new living situations,” said Ganesh.

Even without COVID-19, Malaysia’s internet economy rose at a steady 21% annualised rate despite economic headwinds, with the e-commerce industry a particularly strong driver of this growth.

E-commerce has tripled in size since 2015 exceeding US$3 billion in market value last year, thanks to a relatively high internet penetration rate according to last year’s edition of the e-Conomy Southeast Asia report released by Internet giants Google, Singaporean sovereign wealth fund Temasek and global consultancy firm Bain & Company.

While these numbers are still lower than other countries in the ASEAN region, Dr Brian Wong said the rise of online purchases during the MCO would further spur the e-commerce industry as the country comes to terms with a “new normal” of wearing face masks, carrying out social distancing and ensuring good hygiene whenever they leave their homes.

“Online purchase post-MCO remains essential, particularly among wary consumers,” he noted.

“Thus, it is no longer a choice for businesses to adopt to online platforms… It’s a must.”

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09 June 2020

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UOW Malaysia KDU



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