As the world adapts to a “new normal” some countries are noticing changes in the online shopping habits of their populations. From drops in sales in certain sections to phenomenal increases in others, how the world shops has evolved faster in 2020 thanks to the pandemic. We take a look at the impact of COVID-19 on eCommerce in Malaysia, one of Southeast Asia’s most digitally advanced countries.
Already a thriving sector, eCommerce in Malaysia has continued to grow in the first few months of 2020, with over 149% surge in online sales noted. However, the country’s expenditure per household has dropped by around 55% per month. The businesses most affected appear to be clothing retailers and entertainment services, with a big chunk of those impacted being online stores.
One of the region’s online retail kingpins, Shopee, is a mainstay of eCommerce in Malaysia, pulling in on average over 27 million visits to their platforms per month in the first quarter of 2020. Shopee is much like an online shopping mall, with many different stores selling pretty much everything you could ever want or need. In the first few months of the pandemic, it saw a significant shift from people spending money on things they want, to a noticeable focus on only the essentials.
Like its main competitor, Lazada Malaysia has also seen a change in their customer’s shopping habits. To counteract this somewhat, Lazada has been running an aggressive sales campaign, offering discounts and competitions on their site. With Malaysia being a predominately Muslim country, there is a big focus on “buka puasa” meals for breaking the fast in the evenings during Ramadan and also on helping everyone prepare for the celebration of Hari Raya.
Adding new lines of products such as ready meals and prayer-related items, increasing vendors and offering discounts, online retailers in Malaysia are trying to ride out the economic storm without too much damage. As people are reluctant to go outside of the home to shop like they used to, even though movement controls have become less stringent recently, finding what they need readily online is making a massive difference to their lives.
Improved technology such as the new AI-powered “shopping lens” from iPrice and ViSenze look set to make online shopping even smoother and the indications are that eCommerce in Malaysia is likely to continue on an upward trajectory.
Most popular products
While there has been an overall drop-off in sales of clothing and accessories, one anomaly in Malaysia seems to be women’s underwear. A Commerce.Asia study found that sales in undergarments for women had increased by around 909%. Another big leap in sales focused on home cooking utensils as a nation who dines out a lot is having to cook for themselves. Sales of products such as woks and pans have increased by over 800% in recent months.
Of course, since there is a global pandemic, Malaysian’s are also taking its population’s health and safety into account, and there has been almost an 888% increase in purchases of latex gloves, too.
Uptake of e-wallets
Part of the movement control orders enforced by the government centred on encouraging people to handle less cash. Malaysia has already, by and large, become a less cash-centric society, with even many small corner stores and services accepting cards and online payments. Factor in the youthful population, easy access to the internet and mobile phones combined with a growing security fear around carrying large amounts of cash, and you have a society primed for cashless payments.
Before the virus slowed the world down, Malaysia already had around 7% uptake in e-wallets and was expecting to hit approximately 16% by the end of 2021. The Coronavirus has simply sped this up and helped those reluctant to leave their old ways behind to start using alternative ways to pay. Banks such as Maybank and other payment services such as GrabPay and Touch’n’Go have all seen an increase in usage.
The government’s encouragement and the introduction of e-payments for the traditional Ramadan zakat (tithe) giving are all pushing the adoption of this new way to pay. As well as being more secure than physically carrying cash, e-wallets are offering more protection during the increased online shopping frenzy.
Like most regions of the world, the main impact of COVID-19 on eCommerce in Malaysia has seen more people purchasing their essential, everyday items online, not just outfits for special occasions or the latest tech. Despite some supply chain issues and delays, Malaysians have really stepped into the world of eCommerce. When the country returns to business as usual in the hopefully not-too-distant future, many people will likely have formed the habit of shopping online, and eCommerce in Malaysia should continue to thrive.
Thanks to their glorious malls, Malaysians often joke that shopping is their national pastime. While this hobby has had its traditional method’s wings clipped temporarily, this Southeast Asian country has not given up, they merely moved their habit online.