Best Ecommerce Businesses To Start – The Complete Guide to Starting an E-Commerce Business in Malaysia – Choosing the Right Marketplace, E-Commerce Platforms and the Right Payment Platform
Everyone is shopping online all over the world and Malaysia’s e-commerce industry is one of the brightest hotspots mainly due to the rapid spread of smartphones and internet, the Covid pandemic and supporting digital technologies.
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Best Ecommerce Businesses To Start
In Southeast Asia, Malaysia accounts for 30 percent of e-commerce transactions. Malaysia ranks 35th among the world’s largest e-commerce markets in 2021. Now is the perfect time to start an e-commerce business in Malaysia.
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Malaysia’s e-commerce market is expected to grow by 24.7 percent in 2021, according to e-commerce analytics global data. The market is expected to reach $12.6 billion by 2024, growing at a CAGR of 14.3 percent between 2020 and 2024.
The Malaysian Government’s National Strategic E-Commerce Roadmap 2.0 (NeSR2.0) initiative aims to accelerate the adoption of e-commerce by retailers; Accelerate the enterprise’s electronic procurement; remove non-tariff barriers; improve existing financial incentives; Align strategic investments and promote national brands. With this roadmap, around 900,000 micro, small and medium entrepreneurs are expected to be online by 2025.
He launched the Digital Free Trade Zone (DFTZ) to boost the country’s digital and e-commerce goals through a two-pronged approach:
According to Malaysian government statistics published in 2021, 80 percent of its population or about 27.4 million people are active internet users. Meanwhile, smartphone penetration is 84.2 percent with 39.99 million mobile connections.
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About 50 percent of the 16.29 million Malaysians are active online shoppers, and 82.9 percent of mobile users shop online through smartphones. Online sales in Malaysia are the highest in the country during three sales periods, the Malaysian Super Sale (March 1-31); Malaysia Mega Sail Carnival (June 15 – August 31); Malaysia Annual Sale (November 1 – December 31).
Malaysia’s aim to become Asia’s e-commerce leader is not just a pipe dream, as evidenced by the fact that Malaysia ranked fourth in 2021 in a survey of nine Asia-Pacific countries on digital platform adoption. The country also ranks third in the adoption of Industry 4.0 technologies, with 69% of Malaysian SMEs having implemented these technologies in their operations such as mobile payments, automation software, big data and analytics.
However, the Malaysian e-commerce industry faces many challenges such as slow adoption of new digital tools, dealing with cyber security threats, lack of digital marketing skills, limited manufacturing capacity, high logistics costs and limited cross-border knowledge. – Commerce and regulations.
An online marketplace and an e-commerce platform aim to sell products to consumers and are two of the most popular options for starting a business online. However, there is a fundamental difference between them.
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An online marketplace is a website where customers can check out different sellers, connect with them and buy their products. It facilitates shopping from various sources by displaying different sellers and enabling transactions. This is a great opportunity for e-commerce newbies to build a business upfront with low cost and low risk. The online marketplace owner does not own the inventory. Popular examples from around the world include Amazon, eBay, Etsy, Walmart, and Alibaba.
An e-commerce store or platform is an independent website created by a seller using e-commerce tools. Popular tools globally include Shopify, WooCommerce, Squarespace, BigCommerce, Wix, and Magento.
The owner of the e-commerce platform manages the infrastructure for the accounting, inventory and customer service systems. Usually, well-known brands go for such an arrangement when they don’t want to share profits with the market and require specialized software solutions.
Shopee is the best e-commerce marketplace in Malaysia that is commission-free and focuses on mobile shopping. Founded in 2015, its business model is C2C and B2C.
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Launched in 2011, Lazada charges zero commission across all store categories and has reliable logistics and shipping services. It has both C2C and B2C business model.
Founded in 2007 under the B2C model, Lelong has a wide network of users and provides training to business owners. Receives commission from sellers.
Prestomall, formerly known as 11 Street, started operations in 2014. It works on both C2C and B2C models and takes commissions from sellers.
Now that you have a clear idea of what the e-commerce industry in Malaysia looks like, let’s move on to how to set up an e-commerce business in Malaysia.
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Although Malaysia has the potential to make your e-commerce dreams come true, you still have to think about why you want to start your e-commerce business or e-commerce website in Malaysia. You can start by documenting the purpose of your proposed business in Malaysia and its mission and vision.
Along with this, you can research the market you want to enter for your products and services and conduct thorough research or competitor analysis.
Once that’s done, it’s time to move on to the next series of actions to activate your goal:
An e-commerce platform is essentially a software application that helps online retail businesses, B2B and B2C, manage many aspects of their operations, such as marketing, sales, inventory management, CRM, mobile commerce, and order fulfillment. It helps in optimal communication with clients, customers and employees. Without the right e-commerce platform partner, you cannot compete effectively online. The best platform for your business should have the following features and tools:
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Choosing the right payment gateway is based on your market, demographics and customer location. Globally known payment gateways like PayPal are not useful in populated areas. They can choose iPay88 or senangPay popular in Malaysia. These local payment gateways are integrated with local trading platforms. Also, you need to ensure that the gateway supports foreign currencies, which is very important due to the global nature of e-commerce.
The logistics involved may only be packaging and shipping; Or it can be an advanced model that includes warehouses, insurance and tracking. Choosing the right carrier to ship your products depends on the needs of your business and customers.
As an online business, customers who visit your website choose to buy your product not only because of its price and quality, but also if your supplier offers free shipping and fast delivery. The last two factors determine a customer’s conversion rate from shopping cart to your address.
If a delivery is missed or delayed, your brand reputation is at risk. Therefore, as a shipper, that is, as the company that owns the goods being shipped, you should choose a carrier based on several factors, such as:
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Don’t choose a shipping service because it is cheaper than others, as this is counterproductive. It will be cheaper because of sharp corners in service quality and speed.
Therefore, it pays to do thorough research on the reputation and reliability of the transportation agency using referrals, industry opinions in your circles, customer reviews, and buzz on online forums and social media. Determine how far you can stretch your budget.
When evaluating different carriers, talk to them to determine if they can package or transport your products based on size, shape, and weight. Some carriers refuse to deliver very fragile, perishable or dangerous products.
Customers now take real-time GPS tracking of products delivered to them. So, ensuring this feature is in place, automatic updates on the movement of the product through the supply chain are very important benefits as customers need complete transparency on the path of their goods.
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There are two types of freight carriers: asset-based or full-service carriers and asset-based or brokerage carriers. An asset-based carrier owns all the necessary equipment, such as trucks and tools. When non-asset carriers rent equipment as needed, they can be more negotiable with the pricing of their services. However, if warehousing or inventory management is required to fulfill your order, an asset-based carrier is ideal.
Amazon has raised the bar when it comes to shipping speed with one-day or two-day shipping options. Hence, customers expect the same speed from other fraternities. So, choose the best among the delivery partners you are conversing with at a price you can afford.
If you serve customers or freight abroad, ask the carrier if they have international operations.
It is good to have insurance options if it is related to the nature of your business or products. Negotiate an affordable scheme.
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Check to see if the shipping provider’s software programs will integrate with yours. For example, are their tracking systems compatible with your inventory software? This needs to be discussed at the negotiation stage to avoid any hurdles later.
Are the carrier’s operations environmentally friendly (eg reusable packaging material) or energy efficient vehicles? This will improve your environmental reputation as well as bring financial benefits to the home.
Hence, a delivery partner plays a very important role in the success of your venture and is actually a brand ambassador of your business.
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