The Malaysia e-commerce market is anticipated to surge by 12.8% in 2024, driven by the ongoing shift of consumer preferences from offline to online shopping, finds GlobalData, a leading data and analytics company.

GlobalData’s E-Commerce Analytics reveals that Malaysia e-commerce market registered 15% growth in 2023 to reach MYR44.6 billion ($9.8 billion), as consumers increasingly shift from offline to online purchases. The market is set to increase at   12.8% growth in 2024 to reach MYR50.3 billion ($11 billion) in 2024.

Poornima Chinta, Senior 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.”

Among the payment tools, alterative 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.

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

The growth of alternative payments has also been driven by the rising popularity of buy now, pay later (BNPL) solutions. Some of the prominent BNPL brands in Malaysia are SPayLater, PAYLATER, and Atome. To further drive sales, social commerce platform TikTok Shop partnered with Atome in July 2023 to enable customers pay in instalments by selecting Atome at the payment checkout.

Alternative payments are followed by payment cards and bank transfers. Cards account for a 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.

Notably, over 14% of e-commerce purchases in Malaysia are still made using cash, highlighting the traditional preference for cash among Malaysian consumers.

Chinta 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. The e-commerce market is anticipated to increase at a compound annual growth rate (CAGR) of 11.7% between 2024 and 2028 to reach MYR78.4 billion ($17.2 billion) in 2028.”

*GlobalData’s 2023 Financial Services Consumer Survey was carried out in Q2 2023. Approximately 50,000 respondents aged 18+ were surveyed across 40 countries.