Huge potential: Chan says the company’s payment gateway systems support over 60% of e-commerce businesses in Malaysia.
E-commerce will be the sub-sector to watch in 2016, according to the Malaysian online payment service and solutions provider iPay88.
The company expects e-commerce to continue to grow despite the anticipated three-year economic slowdown period, as the domestic market demand is well-supported by wide and stable online connectivity and broadband solutions.
iPay88 executive director Chan Kok Long said there are many website providers thanks to government-lead financial payment policies and initiatives to support more Malaysian companies in moving their business online.
Chan said that only 5% of Malaysian companies have adopted e-commerce despite Bank Negara’s indication that half of them have some sort of digital presence, such as a having a website, basic e-mail or online communications.
“Having a digital presence is not equivalent to e-commerce because it requires that the business must have transacted online, via the usage of Internet-based systems and networks, resulting in some form of income or revenue generation,” he said.
Company hopes to see the number of Malaysian companies adopting e-commerce to double to 10% by year end.
“This is not an unrealistic expectation based on the statistics and online market trends that we have been observing over the recent years.”
According to a Statista report, the revenue projected in the e-commerce market (excluding eServices) in Malaysia for 2016 is expected to hit US$991.1mil (RM4.1bil).
Globally, e-commerce sales is projected to surpass US$3.5tril (RM14.5tril) within the next five years.
“From the transaction patterns and volume recorded from our systems, it is highly indicative that this services sub-sector is poised for strong growth in 2016,” said Chan.
The company’s payment gateway systems support over 60% of e-commerce businesses in Malaysia.
The total value e-commerce transactions recorded in its payment systems grew by 100% and is expected to hit RM2.6bil in this year.
Despite the gloomy economic climate due to weakening currency and plunging oil prices and retained interest rates, Chan pointed out the potential of what e-commerce has to offer.
“Doing business online offers a lower cost of operations from many aspects – the biggest advantage being the capability to span across geographical borders, meaning that you can reach out to possibly more lucrative overseas market easily,” he says.
“With more customers and orders from the online channels, Malaysian businesses can also expect to cut down on their spending from maintaining physical outlets, but instead, invest to improve delivery and after sales customer service.
“Additionally, there are many e-commerce models that have evolved to provide high value to businesses such as B2B platforms, marketplaces, agents and channels appointment and management services, real-time price comparisons, etc – all of which can greatly benefit the Malaysian companies that are keen on exploring ways to drive up their businesses.”