Going for the real thing

Online shopping is booming globally but Malaysians still prefer going to the stores. Is it because our retailers are slow to get online, or is it because consumers don’t trust virtual transactions?

WHILE e-commerce has ballooned in neighbouring countries like Korea, Taiwan and China, “brick and mortar” shopping is still tops among Malaysians.

Online shopping is still in its infancy here. Malaysia accounts for less than 1% of the retail e-commerce market, says Wee Huay Neo, director of e-commerce enablement at the Malaysian Digital Economy Corporation (MDEC).

But there’s a lot of misconceptions about what e-commerce entails. She clarifies that it isn’t about selling on social media sites like Instagram or Facebook. You need an e-commerce purpose-built platform like a marketplace or have your own brand website with proper payment and delivery systems. Social media is for sharing photos and posts. It’s better for shoppers to buy from a marketplace – which is easier for authorities to monitor, rather than on social media.

Proper e-commerce businesses may have ads on social media but they’re to drive traffic to their website. The legit ones won’t ask you to send a private message, SMS or WhatsApp for details. Proper e-commerce websites will have an address, company name, website operator, and contact details.

But, having a website doesn’t mean a company is e-commerce ready. Shoppers must be able to perform transactions online, she explains.

“Also, having a website doesn’t mean that shoppers will flock to buy your products. You won’t get traffic without digital marketing. Even if you get visitors to your site, it doesn’t mean you’ll make a sale. It still boils down to the product.”

Offline retailers shouldn’t be afraid to go online. It’s still about selling, marketing and promotions, she advises. You don’t need to spend a lot to hire a special technical team. There are many free e-commerce classes online and solution providers that are cheap.

Join a well-known marketplace first. Once you have a following, you can venture out to your own brand website, she tells retailers looking to go online.

The country’s e-commerce journey only started in 2012. Between 80% and 85% of e-commerce is the business-to-business (B2B) market. The business-to-consumer (B2C) market takes up only a small portion. That’s why businesses are being targeted to grow e-commerce. MDEC, she says, is focussing on SMEs which makes up 98% of businesses here.

“At the moment, 80% aren’t e-commerce ready. We must convert ‘brick and mortar’ SMEs to e-commerce. We have an e-commerce strategic roadmap for that,” she says, stressing that online presence is a must to “future-proof” a business.

The roadmap, approved by Cabinet last month, is aimed at doubling e-commerce growth in the country from the current 10.8% to 20.8% by 2020, she shares.

Sellers will become more responsible with fewer incidents of fraud once consumers are comfortable buying online and are more aware of their rights and how to seek redress. This, she says, is the mark of a mature e-commerce market the country is striving for.

“We must go regional and bring Malaysian brands overseas. But before we push anything, we must see if the product can sell in a particular country at the price and quality people want,” she opines.

“We cannot set up marketplaces in every country. So, we work with a dominant marketplace in the country we want to penetrate. We have an e-trade programme that lets local producers sell in 14 countries including India, China, Indonesia, Singapore, the United States, Australia and Thailand, by working with marketplaces like eBay, Taobao, Qoo10 and Matahari.”

Indonesia’s Matahari has physical stores and a strong e-commerce presence. She describes this as an omni-channel and the ideal set up.

“Both offline and online are very important. You have to create a seamless customer experience between the two. For example, a shopper should be able to buy online and get it delivered within the day or return the item at any of the store’s outlets.” We don’t have that yet.

She doesn’t rule out the Government investing in local e-commerce players with regional growth potential. Halal products, she points out, are a niche market. Out of over 30 halal certification bodies in the world, the Malaysian Islamic Development Department is among the most trusted.