Friday, September 30, 2022

From resilience to resurgence: Malaysia’s route to the digital decade

This post was done in partnership with Google Malaysia.

In the past year, the COVID-19 pandemic has become an ongoing catalyst for the increased adoption of digital services among new and existing digital users – a trend that will likely continue into the future.

According to the recent e-Conomy SEA 2021 Report published by Google, Temasek, and Bain & Company, 40 million new internet users came online in 2021, bringing the internet penetration in Southeast Asia (SEA) to a whopping 75%.

Below, we explore how Malaysia’s digital economy has evolved over the year and its growing potential for the future.

Consumers cruise into a new way of life

Due to the various lockdowns over the past two years, Malaysians have been more inclined to stay home and leave the house only when necessary. This, in turn, has accelerated their acceptance and usage of digital services, resulting in a surge of three million new digital consumers since the start of the pandemic (2020 up to H1 2021).

On top of that, users now consume 4.2 times more digital services as compared to before the pandemic. With digital consumption becoming more permanently ingrained as a way of life, consumers’ online behaviors have also changed. For example, eCommerce platforms saw a surge in usage frequency, and spending on basic essentials, such as groceries as compared to pre-COVID.

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Digital merchants take off: Becoming tech-savvy for the future

The extraordinary shift in consumer behavior towards a more digital inclusive lifestyle such as the use of online delivery services, online shopping, and e-wallets has caused many SMEs to urgently adopt technology. This has led to the rise of the digital merchant: native digital SMEs and early adopters who have embraced digital services from end-to-end.

MyFishman, a fresh seafood subscription and delivery service in Malaysia, struggled to reach customers during the movement control order. As logistics and transportation services were abruptly halted and wet markets closed, MyFishman could not operate through traditional means. Instead, it moved its business online, and through an eCommerce platform, reached new customers, increasing its sales by 150% within just the first two weeks.

In fact, the number of digital merchants is expected to continue growing as a large majority of them believe that more than half of their sales will come from online sources, while up to 70% of them expect to increase their use of digital marketing tools to capture a wider and more relevant audience.

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Resilience gives way to resurgence: A focus on eCommerce

As economies worldwide recover, Malaysia’s 2021 gross merchandise value (GMV) reached a 47% year-on-year surge and is expected to hit a total value of $21 billion. Bolstered by a steep 68% eCommerce growth, Malaysia’s overall internet sector had a strong rebound of double-digit year-on-year growth and is expected to reach $35 billion in 2025.

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While eCommerce remains the largest growth driver of the economy, food and transport, along with digital financial services, have had significant growth. Food delivery in particular continues to remain elevated, especially in Malaysia where it achieved 15x more searches compared to pre-COVID.

A surge in e-wallet usage, as well as an increasing interest in new digital banking licenses from Bank Negara, has also placed digital financial services in the spotlight.

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Roaring twenties

Overall, the continued shifts in consumer and merchant behaviour, matched with robust internet economy growth, have ushered SEA into its “digital decade” – and the region is on its way towards a $1 trillion GMV by 2030.

Talent, along with new enablers around data regulation, infrastructure, and the equitable development of the internet economy, remains essential to success. As such, investing in a reliable pipeline of talent, and encouraging learning, is critical for Malaysia to remain on this upswing and continue its growth.

Uncover more insights with the e-Conomy SEA 2021 Report. Download here.

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Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
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