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The State of Mobile Commerce in Malaysia (Part 1)

"Mobile commerce" is buzzing around in recent years but is it here already? What is the macro environment in Malaysia? How should we anticipate the growth of m-commerce?

"Mobile commerce" is buzzing around in recent years but is it here already?

What is the macro environment in Malaysia? How should we anticipate the growth of m-commerce?


Mobile vs Desktop in Malaysia


We need to first look into the behaviour on how users access the Internet.

According to StatCounter, mobile usage in Malaysia has increased from 10% in May 2012 to 20% in May 2013, almost double within a year.

That means, most likely 20% of your e-commerce site traffic is coming from mobile devices. Is this an indication that up to 20% of your online sales are made via mobile devices too?

Mobile vs Desktop in Malaysia

Why is the growth so significant? Let's look into the current state of mobile devices penetration and the projections by various research data.


Smartphone penetration in Malaysia


Malaysia is a country with relatively high mobile phone penetration rate at about 137%, so it is not surprising that smartphone adoption is growing rapidly here.

Following is the summary from selected sources:

(a) GfK Asia: "The markets with deepest smartphone penetration are Malaysia and Singapore where levels have already reached a high of 88%" (2012, source)

(b) Nielsen: "Malaysia smartphone penetration rate is at 27%" (2012, source)

(c) McCann: "Almost 60% of the total Malaysian population will own a smartphone in two years" (2013, source)

As for the vast disparity between GfK and Nielsen report, I tend to agree with both Nielsen and this unscientific research in which it is more logical that smartphone penetration rate in Malaysia is around 30%. It could be a tad higher now in 2013 since Malaysia government has provided incentives to increase smartphone use among the youth.

Based on current growth rate, it is hard to disagree with McCann's projection that smartphone penetration rate in Malaysia will reach 60% in 2015.


Tablet penetration in Malaysia


What about tablet? Together with smartphone, tablet is also one of the main contributing factors to the 20% mobile traffic.

According to Ericsson ConsumerLab, "tablet penetration stands at 9% of the country's population, with potential to grow up to 29% in future" (2012, source).

Users consume tablet differently from smartphone so it is difficult to argue that users will prefer to shop on tablet compared to smartphone.


Mobile Commerce market size in Malaysia


So, how much do Malaysians spend on their mobile devices?

According to Nielsen-PayPal Analysis, m-commerce market size in Malaysia was RM467 million in year 2011. RM337 million (72%) were spent on smartphones while RM108 million (23%) via tablets.

Malaysia mobile commerce market size

The total online commerce market in 2011 by referring to the same report was RM1.97 billion, that means close to 24% was mobile.

Nielsen-PayPal is forecasting that total e-commerce market in 2015 will be RM5.67 billion and 60% of it (RM3.43 billion) is mobile. A significant increase from 24%!


Mobile is here, but what's next?


M-commerce is here and will continue to grow, something that online retailers cannot afford to ignore.

Some points worth exploring in our next installment, especially from the perspective of online retailers, e-commerce providers, platforms:

  1. How do Malaysians consume smartphone, tablet?
  2. Mobile application, or mobile web (responsive web design)?
  3. Is local online marketplace and retailers ready for mobile?
  4. How to do more on mobile commerce?

Read part 2 of this installment: The State of Mobile Commerce in Malaysia (Part 2)

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eCommerceMILO: The State of Mobile Commerce in Malaysia (Part 1)
The State of Mobile Commerce in Malaysia (Part 1)
"Mobile commerce" is buzzing around in recent years but is it here already? What is the macro environment in Malaysia? How should we anticipate the growth of m-commerce?
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