Malaysia’s E-Commerce Stays Resilient, Future Growth To Focus On Service Quality

KUALA LUMPUR, Dec 29 (Bernama) -- Malaysia’s e-commerce sector remains resilient despite shifting consumer behaviour and global economic uncertainty, with the next phase of growth expected to focus more on execution than expansion, particularly in providing consistent, affordable, and reliable services.

Milieu Insight co-founder and chief commercial officer Juda Kanaprach said Malaysia’s high e-commerce adoption has entered a more mature phase, where buyer and seller expectations are increasingly converging. The market is no longer driven solely by novelty or price, but by reliability and value.

“Consumers continue to rely on online platforms for essential and value-driven purchases, while sellers are becoming more measured, prioritising sustainability over rapid growth.

“What is striking is that both sides are asking for the same things -- lower costs, reliable logistics, and consistent service quality,” she told Bernama.

From the consumer perspective, logistics costs and reliability have become central to purchasing behaviour.

Milieu Insight’s consumer study, “Beyond the hype: Malaysians want speed and smarter shopping in 2025,” found that while discounts remain the top motivator for online purchases, free or low-cost shipping ranks second, cited by 66 per cent of respondents.

At the same time, 67 per cent want lower delivery fees, and more than half reported that rising shipping charges have led them to cut back on online spending.

Service quality has also emerged as a decisive factor shaping trust, loyalty, and spending behaviour. The study found that nearly half of Malaysian shoppers stop buying from the same seller after facing a delivery issue, while poor fulfilment and slow response times contribute to cart abandonment and platform switching.

“At this stage of market maturity, service quality is no longer a nice-to-have. It is a key driver of growth.

“Consistent service builds confidence and repeat behaviour, while poor experiences quickly erode trust,” said Juda.

Importantly, the consumer survey also showed that buyers respond positively to better service. A majority indicated they would shop again or spend more with sellers who provide timely updates and responsive support, while 82 per cent said they are willing to pay more for consistently better delivery services.

Sellers, particularly micro, small, and medium enterprises (MSMEs), echo these concerns. While demand remains relatively stable, rising logistics costs and inconsistent fulfilment performance are increasingly cited as barriers to sustainable growth.

Another Milieu Insight’s study, titled “Malaysian e-commerce sellers want more: Smarter tools, stronger policies, faster growth,” found that 51 per cent of sellers identify shipping costs as a key challenge, while logistics failures directly contribute to lost sales, negative reviews, and declining buyer loyalty.

“Importantly, sellers are not resistant to investment. They are willing to co-invest in platforms, tools, and ecosystem improvements, but only when better logistics and service quality clearly translate into real commercial outcomes,” she said. 

The seller survey also revealed that two-thirds of Malaysian sellers agree they should contribute to long-term ecosystem growth, including platform fees, provided the return on investment is clear.

Sellers also explicitly affirmed the value of buyer-centric policies, linking them to larger basket sizes, repeat purchases, and stronger ratings.

According to the Department of Statistics Malaysia, e-commerce revenue rose 1.9 per cent to RM937.5 billion in the first nine months of 2025, reflecting continued expansion. However, Juda cautioned that resilience alone will not be sufficient as regional peers also accelerate investments in infrastructure, innovation, and execution capabilities.

Drawing on regional benchmarks and real-time consumer insights, Milieu Insight helps industry players understand shifting buyer needs and identify which improvements in service and logistics will drive measurable outcomes.

“Across both sides of the market, buyers and sellers are signalling that cost efficiency and reliability must move together. Lower prices without consistency undermine confidence, while reliability without cost discipline limits scale,” she said. 

She added that Malaysia’s competitiveness in the next phase will hinge on how effectively platforms, logistics providers, and policymakers align investment and execution across the ecosystem.

“The opportunity for Malaysia’s e-commerce sector is clear, but unlocking its full potential will require coordinated public-private efforts to raise service standards, improve logistics reliability, and keep costs manageable across the ecosystem,” she said.

As the sector builds on its 2025 performance, Juda said success will increasingly be defined by service and execution excellence, turning resilience into a sustainable, competitive advantage in a more demanding regional e-commerce landscape.

-- BERNAMA