Malaysia Poised to Lead E-Commerce Growth in Southeast Asia

30 January 2025

KUALA LUMPUR: Southeast Asia is witnessing a remarkable e-commerce boom, with Malaysia emerging as a pivotal player in this digital transformation. The recent white paper by Blackbox Research, titled "Grasping the E-Commerce Opportunity in Southeast Asia," underscores Malaysia's strategic advantages, promising growth potential, and the crucial role of public-private partnerships in shaping the region's digital economy.

According to experts analysed in the study, Malaysia has consistently positioned itself as a significant contender in Southeast Asia's digital landscape, ranking second in regional e-commerce performance behind only Indonesia and Thailand. Its advantageous geographic location, robust infrastructure, and manageable market size establish it as a natural hub for regional e-commerce activities. However, Singapore continues to lead the pack, with 59% of experts identifying it as the top e-commerce player, attributed to its advanced infrastructure and strong government support.

"Our study shows that the e-commerce story in Southeast Asia is an exciting one. The experts we spoke to were optimistic, and it's easy to see why - Gross Merchandise Value is on track to hit US$159 billion in 2024 and double by 2030," said David Black, CEO & Founder of Blackbox Research.

"For Malaysia, the opportunity is there to capitalise on its momentum and break out as a regional leader. To make it happen, businesses need to juggle how they adapt to changing customer habits while staying resilient and cost-efficient."

Logistics will play a critical role in Malaysia's e-commerce growth, as high logistical costs and inconsistent delivery performance create bottlenecks that disrupt efficiency and hinder growth in the sector. Adopting advanced logistics technologies, optimizing delivery routes, and establishing multi-region distribution centers will give Malaysia a strategic edge in the increasingly competitive e-commerce landscape.

As Malaysia focuses on strengthening its e-commerce ecosystem and solidifying its position as a regional leader, logistics has become a critical area requiring urgent attention. The country's e-commerce framework is seen as supportive of sector development by only six out of 17 industry experts, citing layered costs - courier charges, import taxes, and the challenges posed by a weak currency - as major barriers to cost competitiveness.

To overcome these challenges, Malaysia must prioritize innovation and adopt advanced logistics technologies to optimize delivery routes and reduce costs. Establishing multi-region distribution centres will also give the country a strategic edge in the increasingly competitive e-commerce landscape.

Advancing Malaysia's digital economy and e-commerce sector will require strong public-private collaboration. Inclusive dialogue is crucial, with policies shaped by input from all stakeholders, including e-commerce platforms, sellers, and logistics providers.

The government is already addressing these challenges, with Deputy Communications Minister Teo Nie Ching highlighting the importance of infrastructure developments in driving growth.

Programmes like the Digital Free Trade Zones streamline cross-border trade and widen global market access for micro, small, and medium enterprises (MSMEs). As Malaysia prepares to establish itself as a leading regional e-commerce and logistics hub, fostering collaboration among stakeholders and adopting a unified approach will strengthen the ecosystem, drive innovation, and promote sustainability.