A young, but growing market

SINCE Zika was detected here, there’s been a surge in searches for items like mosquito repellent patches and wrist bands – a 517% and 349% increase respectively, notes 11street CEO Hoseok Kim.

“Our survey showed that 95% of Malaysians feel positive about online shopping, especially with more gadgets and gizmos in the market. They see e-commerce as a way for them to save,” he says, stressing that online shopping isn’t just for women.

Many opportunities, he says, are untapped. The e-commerce penetration rate for advanced countries like Korea is 15% but here it’s a mere 2.5%.

The e-commerce retail market in Malaysia, Indonesia, the Philippines, Singapore, Thailand and Vietnam alone, is estimated to be worth around RM28.7bil.

Poised to be the third largest in the world after China and India, South-East Asia (SEA) is on the cusp of an e-commerce golden age. The region’s expected to chalk double-digit numbers in the next five years.

“Compared to other SEA countries, we have good infrastructure like Internet penetration, payment methods and comprehensive logistic and delivery systems to boost e-commerce,” he says.

Agreeing, Shopee regional managing director Ian Ho says over 70% of the population owns a smartphone. And, with 18 million plus active mobile Internet users daily, regular purchases via mobile phones are a given, he says.

Launched last year, the mobile marketplace has over 20 million downloads across the region.

Many Shopee users are first time e-commerce buyers keen on fashion, cosmetics and mobile accessories, making two or three purchases a week, he says.

Kim adds: “Consumers look for specific things they need on PCs while mobile shoppers don’t usually have anything in particular that they want to buy. They browse because they enjoy shopping.”

More than half of 11street’s traffic is generated on mobile phones.

“Mobile shopping is fast becoming a lifestyle as you can do it anytime, anywhere,” he says, adding that the GST (Government Service Tax) hasn’t affected online trade. As consumers become more frugal, online shopping – with rewards like loyalty programmes, vouchers and discounts – grows.

Educating the public that shopping online can be a seamless, safe and fuss-free experience is key, says Shopee’s Ho.

Unlike buying from the store where shoppers can touch, feel and receive the goods when payment is made, e-commerce, he explains, is about trust. Shopee sellers don’t get paid until the buyer is satisfied.

Meanwhile, local retail exporters on eBay are experiencing solid growth due to the country’s strong manufacturing base and weak ringgit exchange rate against the strong US dollar, eBay Malaysia country head (cross border trade) Wong Mei Inn says.

The rise in smartphone and broadband penetration and stronger government support for Internet-based retail, she adds, has lowered entry barriers for Malaysians to do business online.

E-commerce is relatively young here but more opportunities for new businesses and young entrepreneurs in auto parts, cell phones, sporting goods, home improvements, computers, consumer electronics, and home furnishing, segments are emerging.

“Our global customer base has 164 million buyers. Malaysian exporters sell to customers in 34 countries with the United States, Australia, and the United Kingdom making up the top markets.

“We want Malaysians, especially the millennials, to recognise the benefits of online cross-border trading.”

Most traditional commerce companies can only sell locally or regionally. Even if they break into the international market, they’ll only reach a small segment. It’s the bigger ones that manage to penetrate the global market, she points out.

“On eBay, large firms don’t dominate the export market as much as they do in traditional trade. Small businesses can cast a wider net and export to more international markets.

“With doors open to more international markets, 99% of commercial sellers are exporting on eBay as compared to 55% on traditional commerce.”

Shopee’s Ho sees a growing group of entrepreneurs looking to sell online. Its “Shopee University” helps local entrepreneurs set up a free online business in a mobile-centric environment through tutorials. In August this year, Pos Laju got onboard. The goal is to train 10,000 nationwide by December.