Malaysia is often overshadowed by its more populous neighbours - Indonesia, Philippines, Vietnam - but it's really miles ahead of the pack. High internet penetration, growing ecommerce and typical-for-Asia high social media usage tells a story of a more mature growth market.
Malaysia's GDP per capita is 4 times higher than Indonesia and Philippines and almost twice of that of China. This has heavy influence on the internet penetration and online shopping habits. Malaysia is clearly ahead of the pack and this is both an opportunity and a challenge for foreign brands trying to enter the market.
Malaysians love to shop and large daily deal and ecommerce sites have quickly become top destinations online. Ecommerce revenues (excluding services) were $380 million in 2013 and Japanese giant Rakuten who launched in Malaysia less than 2 years ago estimates this to increase to $530 million in 2017.
Local ecommerce expert CK Wong of ecommerce.milo estimates that services bought online when products and services are looked together as a whole then ecommerce revenue is over two times higher.
If we refer to Malaysia's e-commerce market size and derive PayPal's report, it is estimated that there are a total of RM 2.75 billion e-commerce transactions (includes both product and service sales) in 2012.
"If we can get 50% of them to go online in the next few years, the total transaction size of the e-commerce industry in Malaysia will grow much higher, surpassing the RM1.72 billion mark," he added.
Buying on mobile is a fairly common activity, people buy anything from apps to services. M-payments almost don't exist, they make up only 0.3% of the payments volume. Simply put - there just doesn't seem to be a need for m-payments.
Why mobile money worked in Kenya and struggles in other markets is an excellent analysis that looks at different aspects that need to "work" to make m-payments system take off.
Engaged, affluent and urban - is there a better audience for any brand? Malaysia fits the bill and while often overlooked next to its giant of a neighbour Indonesia, the country shouldn't be ignored. Massive online population hungry for shopping and active on social channels is more similar to western markets than we might think.
Mobile internet usage is fast catching up as consumers upgrade to smartphones. Good and affordable 3G coverage will only accelerate that trend.
Quick look at the most popular shopping destinations in Malaysia shows that large western brands are well positioned to take advantage of majority of local businesses only thinking about establishing online and mobile presence.