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E-commerce continues to grow

E-commerce continues to grow

13 Aug 2021

It will move toward a stabilisation once the economy re-opens

The e-commerce will continue in a strong growth trajectory as long as the economy remains shut and it will move toward a stabilisation once the economy re-opens.

Centre for Market Education CEO Dr Carmelo Ferlito foresees after the pandemic crisis, the demand towards e-commerce will be higher compared to pre-pandemic level.

“However, I believe it will be lower than the current position, as many will go back to the traditional way of transactions.

“E-commerce is becoming the best way to survive for many businesses, when it is possible. Let’s not forget that the electronic way is a means and not an end,” he told The Malaysian Reserve (TMR).

Malaysia’s income from e-commerce transactions rose 23.3% year-on-year (YoY) to RM267.6 billion in the second quarter of 2021 (2Q21), mainly driven by the manufacturing and services sectors.

According to the Department of Statistics Malaysia, services sector revenue jumped 20.5% YoY to RM404.5 billion in 2Q21 due to the low base effect.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said under the services sector, revenue of wholesale and retail trade, food and beverage, and accommodation segment increased 21.8% YoY to RM324.6 billion.

“This was followed by the information and communication, and transportation and storage segment which grew 14.7% YoY to RM59.5 billion.

“Health, education and arts, entertainment and recreation segment grew 27.3% YoY to RM12.2 billion, while the professional and real estate agent segment was 8% higher at RM8.2 billion,” he said in a statement on Wednesday.

The number of persons engaged in this sector were 3.6 million persons, declined by 25,812 persons or 0.7% as compared to the same period last year.

This decrease was attributed by information and communication, and transportation and storage segment which dropped 11,297 persons or 2.4%, followed by wholesale and retail trade, food and beverage, and accommodation segment 6,127 persons or 0.2%.

Meanwhile, health, education and arts, entertainment and recreation segment fell 1.7% or 4,772 persons. Professional and real estate agent also declined 3,616 persons or 2%.

Mohd Uzir said compared to the same quarter of last year, salaries and wages paid increased by 0.4% or RM100.5 million.

“The growth was contributed by information and communication, and transportation and storage segment which increased RM120.8 million or 2.8%.

“This was followed by wholesale and retail trade, food and beverage, and accommodation segment and health, education and arts, entertainment and recreation segment rose RM9.3 million and RM3 million respectively,” he added.

Malaysia University of Science and Technology professor Dr Geoffrey Williams said e-commerce income growth has been very strong reflecting the shift of many companies to online sales due to lockdowns.

Williams, who is also Williams Business Consultancy Sdn Bhd director believed this is one of the few good news stories of the pandemic.

“As for services, this is not good news. Although there is a big annual rebound, we must remember that 2Q20 was the start of the lockdowns. So, there is a big base effect.

“If we look at the breakdown again, although the annual growth is large due to the low base effect, actually all sectors had lower revenues in 2Q compared to 1Q. This sluggishness is also seen in 25,812 fewer people employed,” he told TMR.

He said services contributed just under 55% of gross domestic product in 2020 so these further contractions show that the economy is not recovering which is not surprising considering the extended lockdowns.

Source: The Malaysian Reserve

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