Growth to top 11% by 2020
> About 50% of SMEs expected to participate in e-commerce by 2020, up from 32% last year
KUALA LUMPUR: The government is confident that e-commerce in Malaysia will be able to surpass the 11% compound annual growth rate (CAGR) by 2020, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.
“The prospects are huge. We will exceed 11%. I’m confident that it can happen because we’re getting our act together in the government and we’re working closely with the private sector,” he said after chairing the National eCommerce Council (NeCC) meeting here yesterday.
E-commerce in Malaysia is projected to grow at an 11% CAGR, driven by SMEs. About 50% of Malaysian SMEs are expected to embark on e-commerce by 2020, from 32% in 2016; while 15% of the value of e-commerce transactions are estimated to come from SMEs by 2020, from 6% now.
“These speak volumes of the progress we’ve made and the future potential of e-commerce” said Mustapa.
E-commerce in Malaysia is expected to grow to RM114 billion by 2020 or 6.4% of gross domestic product (GDP), from RM68 billion or 5.9% of GDP in 2015.
Mustapa said additional government intervention will drive higher contribution to GDP. “With all the measures in place, we’ll achieve a lot more.”
The National eCommerce Strategic Roadmap is expected to double e-commerce growth and enhance e-commerce GDP contribution up to RM211 billion by 2020, from the business-as-usual RM114 billion targeted for 2020.
“As we embark on these initiatives, we’re aware that other countries are doing the same thing as well. To stay ahead of the competition, it’s important that we become more efficient.
“We have to keep on making improvements to be ahead of the curve. It’s important for us to share the best practices. We’ve to benchmark against what’s happening in other countries,” said Mustapa.
As Malaysia plans for the launch of the Digital Free Trade Zone next week, Mustapa pointed out two challenges, which are on the supply side by SMEs and regulatory hurdles.
“Our SMEs need to produce quality products for competitive prices. There were incidences in the past where orders have been placed but some SMEs were unable to fulfil them, which means we need to enhance the competitiveness of our SMEs.
“The other challenge is to get through all the other regulatory hurdles. We were informed that some particular transactions require 21 procedures. We need to have a radical look at some of these issues,” Mustapa said, adding that the country needs to constantly make improvements in technology, systems, management and software.
He said the way forward is to continue close collaboration and engagement with all stakeholders along the e-commerce value chain, with the NeCC driving the national e-commerce agenda.