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Malaysia’s State of E-Commerce in H2 2020
Southeast Asia is one of the regions that experienced tremendous growth amidst the pandemic outbreak. A report by Google, Temasek, Bain & Company predicts that the e-commerce industry in Southeast Asia will be valued at US$172 billion by 2025.
But what about Malaysia’s state of e-commerce? Malaysia is one of the top e-commerce markets in Southeast Asia. The country’s e-commerce market is expected to be valued at US$5.54 million in 2021.
According to a study by GlobalData, just like its Southeast Asian counterparts, the COVID-19 outbreak also accelerated Malaysia’s e-commerce growth. E-commerce platforms like Lazada saw “consistent growth across the entirety of 2020 compared to last year, with the fastest-growing month recording a sales uplift of almost 120% year-on-year (YoY) and an 80% increase YoY in daily active buyers,” said Leonard Chow, CEO of Lazada Malaysia in an article covered by The Malaysian Reserve.
Let us take a look at Malaysia’s state of e-commerce in the second half of 2020:
Average transit time to first delivery attempt was 2.4 days
In our previous study on Malaysia’s state of e-commerce in 2019, the average transit time to the first delivery attempt was 2.1 days. However, in a joint study with iPrice Group last year, we found that the average transit time increased to 4.6 days during the lockdown period.
The overwhelming number of online orders caused a capacity crunch, which greatly affected the delivery performance of Malaysia. Delivery time had increased by 119% during the lockdown period.
On the other hand, deliveries to non-metropolitan areas in Malaysia also grew 11.9% faster than the capital. During the lockdown period, all non-essential stores were forced to shut down and many had to rely on e-commerce to make purchases.
Thankfully, based on Parcel Monitor’s recent data findings, we found that in the second half of 2020, Malaysia’s average transit time had gone back to the pre-lockdown period at 2.4 days. Many businesses had started to open up in May and consumers were able to shop from stores directly.
96% of parcels were successfully delivered at first attempt
As part of the Movement Control Order in Malaysia, the government enforced a work from home order to employees across various industries. This meant that most consumers were home to receive their online orders, increasing the success rate of parcels being delivered at the first attempt.
In 2019, it was at a success rate of 93%, but in the second half of 2020, we saw this rise to 96%.
99% of parcels were successfully picked up from collection points
To adhere to social distancing, many e-commerce sites and courier services had to provide alternatives for consumers to receive their parcels safely. E-commerce giants like Shopee and Lazada have been providing collection points for consumers to pick up their orders and it appears that this alternative was being utilized more during the pandemic outbreak. We observed an increase in the success rate of parcels being picked up from 97% in 2019, to 99% in the second half of 2020.
It is great to see that many countries are recovering from the effects of the pandemic and innovating new delivery alternatives to adapt to new consumer shopping habits. With the different innovations and alternatives, how will e-commerce turn out in 2021?
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