KUALA LUMPUR: Online sellers are trying their best to cushion the impact of higher prices while a growing “wait-and-see” mood emerges as possible cost adjustments loom, particularly for shipping, packaging and imported goods.
Yuki Lew, who runs an online apparel store in Kuala Lumpur, said that for now, she is trying to cushion the impact by offering free shipping discounts to customers who buy more, but added: “I don’t know how long I can hold on.”
However she stressed that online sellers have little control over upstream cost increases that could filter through logistics and materials.
“If diesel prices keep going up, the worst for online sellers will be transportation and packaging costs.
“We have no say over those, and it will definitely increase our business input costs,” she said. Lew, who sources products from China, South Korea, Japan and Thailand and also conducts live sales on Facebook, said persistent geopolitical tensions affecting global energy markets could trigger a chain reaction.
“If the conflict drags on, flight costs will go up, then local transport and shipping, packaging, then food – the knock-on effects will be there,” she said.
For now, she is trying to cushion the impact by offering free shipping discounts to customers who buy more, but added: “I don’t know how long I can hold on.”
Another online clothing and fabric seller, Normah Isa from Seremban in Negri Sembilan, said suppliers in Thailand and Indonesia had already signalled possible wholesale price increases.
“What worries me most is if prices were to keep increasing.
“If shipping and transport costs in Malaysia go up too, it will be difficult; we will have to raise prices for buyers,” she said.
Cost uncertainty is not confined to discretionary retail.
Malaysia Fish Industries General Association president Chia Tian Hee said his seafood supply business has continued selling fresh catch daily via social media since the Covid-19 pandemic.
While diesel subsidies still cushion parts of the sector, he said other suppliers were already pushing for higher charges.
“We have diesel subsidy, so our operations are not affected directly.
“But suppliers for other materials want to increase prices, such as transportation, processing, equipment and packaging.
“We have been informed there may be adjustments in April, but we don’t know how much yet.
“There is a lot of uncertainty,” he added.
Chia urged policymakers to avoid sudden shifts and to protect fishermen and farmers, who are a critical part of national food security.
“We hope the government will help. If prices go up, make it gradual,” he said.
He added that steep increases could force small operators out and leave Malaysia more reliant on imports over time.
Economists, however, think Malaysia’s most likely path remains targeted, gradual reform rather than an abrupt removal of subsidies that can trigger a broad price shock.
Tunku Abdul Rahman University of Management and Technology Centre for Business and Policy Research chairman Assoc Prof Dr Foo Lee Peng said the recent reduction of the subsidised RON95 quota under Budi95 from 300 litres to 200 litres reflected “calibrated tightening”, aimed at improving fiscal discipline while limiting disruption.
“The effects can be felt within weeks at the household level,” she said.
She added that wider demand adjustments typically became clearer over one to three months.
For the digital economy, Foo said the first impact was more likely to appear in delivery-related costs rather than ride fares, as logistics operators are more directly exposed to fuel usage.
However, she said targeted diesel subsidies for transport and logistics could cushion the pass-through, meaning increases are likely to be gradual and feed into prices over time rather than immediately.
“In competitive online markets, SMEs may initially cut promotions or absorb costs through tighter margins, rather than raise prices quickly and risk losing customers,” Foo noted.
Senior economist and policy specialist Dr Geoffrey Williams said subsidy changes were also likely to be phased in given their political sensitivity.
“Given the political implications of subsidies, it is more likely that they will be removed gradually,” he said.
He added that a tiered approach could taper support at higher consumption levels.
Williams argued the policy challenge was to reduce petrol demand through behavioural change rather than boost spending.
“Normally price hikes will cut demand, but if you can’t float prices then you have to try to change demand through behavioural change,” he said.
He cited work from home arrangements as a possible mitigation measure, saying reduced commuter traffic could lower the subsidy bill and stretch supplies.
Williams also cautioned against broad stimulus measures, warning that boosting demand in a supply-constrained market could worsen inflationary pressures.
