Malaysia’s e-commerce income by establishment recorded a notable growth of 10.4 percent year-on-year in the first quarter of 2023, to reach MYR 291.7 billion ($62.6 billion U.S. dollars), official data showed Thursday.

The Department of Statistics Malaysia (DOSM) said in a statement that this growth was primarily driven by manufacturing and services sectors.

As for 2022, the e-commerce income amounted to MYR 1.1 trillion ($240 billion), rose 6 percent growth as compared to the previous year.

On quarterly basis, the first quarter of 2022 recorded an income of MYR 264.3 billion ($56.72 billion), which increased to MYR 273.8 billion ($58.76 billion) in the second quarter.

The upward trend continued, with e-commerce income registering MYR 274.6 billion ($58.93 billion) in the third quarter of 2022 and MYR 287.1 billion ($61.61 billion) in the fourth quarter of the same year.

According to the DOSM, these positive results can be attributed to Malaysian government’s initiatives aimed at establishing a regional e-commerce gateway, investing in e-commerce startups, promoting innovation through a regulatory sandbox, and enhancing communication and broadband facilities.

It said these efforts have yielded substantial economic benefits, including increased adoption of digital technology and overall improved performance.

Meanwhile, the income generated from e-commerce in Malaysia experienced a remarkable 23.9 percent surge in 2021 compared to 2019, reaching 1.04 trillion ($220 billion).

Examining the e-commerce income by market segment, the local market segment, which includes sales conducted within Malaysia, recorded a substantial increase of 25.5 percent, amounting to MYR 932.7 billion ($200.15 billion) in 2021.

In contrast, the international market segment increased by 11.9 percent, reaching MYR 104.5 billion ($22.42 billion).

Furthermore, analyzing the e-commerce income based on the type of customer, business to consumer (B2C) transactions experienced a significant growth in 2021, rose 26.2 percent to MYR 308.9 billion ($66.29 billion).

Business to business (B2B) transactions increased 25.9 percent to MYR 713.1 billion ($153.03 billion).

Conversely, the business to government (B2G) transactions declined 31 percent to MYR 15.2 billion ($3.26 billion).

According to the DOSM, these statistics highlight the substantial growth and economic impact of e-commerce in Malaysia, with strong performances in the local market segment, B2B transactions, and B2C transactions.

This was despite that the B2G sector declined during the same period.

Malaysia’s E-commerce expenditure in 2021 also recorded an increase of 23.6 percent to MYR 460.8 billion ($98.88 billion).

The local market segment surged 25.8 percent to MYR 426.8 billion ($91.59 billion), while the international market grew 3.2 percent to MYR 34 billion ($7.3 billion).

E-commerce expenditure by type of market via B2B rose 20.5 percent to MYR 403.1 billion ($86.5 billion), followed by B2C with 85 percent increase to MYR 50.8 billion ($10.9 billion).

Meanwhile, B2G expenditure declined 12.6 percent to MYR 7 billion ($1.5 billion).

Subsequently, computer usage recorded an increase of 7.6 percentage points to 93.8 percent, followed by internet (increase 5.4 percentage points to 90.6 percent), and web presence (increase 9.4 percentage points to 63.3 per cent).

Information and communication, financial and takaful/ insurance, and real estate sectors fully utilized the use of the internet and computers in their businesses.

“Even though the COVID-19 pandemic had a negative impact on the overall health and economy, it also had a significant positive effect on boosting Malaysia’s e-commerce activity,” said DOSM.

It said the restrictions and safety measures imposed to control the spread of the virus, such as lockdowns, social distancing, and limited physical store operations, have led to a surge in online shopping and digital transactions.

“Overall, the COVID-19 pandemic has acted as a catalyst for the growth of e-commerce in Malaysia,” it added.

Malaysia’s Vynn Capital shares research insights on Southeast Asia cross-border commerce landscape