Establish an e-Commerce Business in Malaysia
Updated on Friday 22nd March 2019
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The e-commerce industry in Malaysia is set to reach a total value of $3,751 million at the level of 2019 (the value is calculated in terms of revenues). Local and foreign entrepreneurs who want to open a company in Malaysia in the e-commerce industry must also take into consideration that this market is expected to further grow in the following years, reaching $5,776 million by 2023.
The most developed sub-sector of the e-commerce industry is represented by sales of electronics and media related devices; our team of consultants in company registration in Malaysia can provide in-depth information on any steps related to the incorporation of an e-commerce business and may also assist with advice on how to register a website in this country.
What is the current situation of the Malaysia e-commerce market?
For the current year, investors interested in the e-commerce sector in Malaysia should be aware of the fact that the user penetration is expected to reach 62.5%; this rate will slightly increase by 2023, to 64.2%. When talking about the e-commerce activities developed on a business-to-client basis, it is necessary to know that Malaysia has approximately 16 million e-commerce users.
As a general rule, the average spending per person is estimated at $79, but in the next years (up until 2022), e-commerce users will spend approximately $110. At the moment, the e-commerce market is highly sustained by young people, who are acquainted with modern devices and using the internet for making various purchases. Some of the most relevant aspects regarding the characteristics of the local consumer market are the following:
- e-commerce websites are accessed on a daily basis by persons who have an age between 16-44 years old;
- the highest rate for logging on e-commerce websites is seen in the age group 16-24 years (93%);
- the most common ways to make online purchases in Malaysia are through desktop computers, smartphones and tablets;
- Malaysia has one of the highest internet penetration rates registered in the Southeast Asia;
- the country has also the highest rate on the mobile phones penetration (from its total population, there are 21.6 million persons considered unique mobile users).
How are e-commerce businesses sustained in Malaysia?
A positive aspect for investing in the e-commerce sector in Malaysia refers to the aid provided by the local government in order to regulate and to assist companies operating in the online sales industry. In 2016, the Malaysian authorities created the National e-Commerce Council, which was set up with the purpose of promoting e-commerce activities, as well as for providing support to the industry.
Companies operating in the e-commerce industry or those who want to access this sector can benefit from the country’s national programs, created under the National e-Commerce Strategic Roadmap. Such programs are designed to increase the potential of this sector which had a steady increase in the last years (having an average growth rate of 12.5% on a yearly basis).
The National e-Commerce Council, operating under the Ministry of International Trade and Industry, helped in registering more than 120,000 e-commerce businesses with the Companies Commission of Malaysia, since its incorporation. The sector is also sustained through the Digital Free Trade Zone (DFTZ), which was created with the purpose of aiding local businesses in exporting their products to other countries. More importantly, small and medium sized companies in Malaysia can use the DFTZ in order to enter various digital marketplaces, which can help them in enhancing their capabilities.
What is the legislation for Malaysian e-commerce companies?
Malaysia provides a set of legal acts which regulate the activity of e-commerce operators. Our team of consultants in company formation in Malaysia may present the legal framework addressed to this sector, but it is necessary to know that the main rules of law are the following: the Electronic Commerce Act 2006 and the Electronic Government Activities Act 2007.
Businessmen who want to open a company in Malaysia in this industry should also know that, besides these two main rules of law, the country also applies the Personal Data Protection Act 2010, being the first country in the ASEAN region to introduce regulations concerning the protection of the online consumers’ information.
The country also applies the Digital Signature Act 1997 and the Consumer Protection Act, a document that was amended in order to include online activities as well. We invite investors to request for further information on the registration of a Malaysian e-commerce company from our team of specialists.