Malaysia’s digital economy to see higher boost
02 Dec 2021
Malaysia’s digital economy is estimated to be at US$21 billion (RM88.41 billion) in gross merchandise value (GMV), according to the “e-Conomy SEA 2021: Roaring 20s — The SEA Digital Decade” report by Google Inc, Temasek Holdings Ltd and Bain & Co.
The report said Malaysia’s fast digital adoption with 47% growth of the digital market from US$14 billion to US$21 billion in 2021 was due to the 68% surge in e-commerce and is expected to grow to US$19 billion by 2025.
The transport and food sectors are also increasing by 35% while the online media sectors are at 14% growth.
The three insights from this year’s report on Malaysia’s increasing growth in the Internet economy include exponential growth in digital consumers, digital merchants getting tech-savvy and funding on track to reach new heights.
From the abrupt growth in digital consumers during the pandemic, 94% until today prefer digital transactions, which is on average 4.2 times more compared to pre-pandemic.
On tech-savvy merchants, 43% merchants believed that digital platforms have helped them survive the pandemic.
Based on the report, 98% merchants have accepted digital payments, 72% have begun using digital lending solutions while 70% have embraced digital marketing tools.
Lastly, the investment industry has remained strong in the digital services, namely sectors like fintech, healthtech and edtech.
Google Malaysia MD Marc Woo said Malaysia’s 2021 GMV is projected to hit US$35 billion by 2025 with an 85% permanent shift in digital adoption to utilise digital services.
“Many businesses have opted for digital platforms and are expecting to increase the usage of digital tools in the next five years,” he said in a statement yesterday.
He added that the encouraging growth comes with initiatives such as MyDigital to cultivate the country into a digitally-driven nation and a regional economy leader by 2030.
“This initiative reinforces our obligation in creating a safe and inclusive digital economy that is equitable to provide economic opportunity for the current and future generations in our mission to advance Malaysia together,” he said.
Meanwhile, Temasek chief investment strategist and head of South-East Asia Rohit Sipahimalani said the digital adoption in the region has propelled its Internet economy to new heights.
“Temasek looks forward to increasing our investments in South-East Asia’s digital champions to catalyse digital solutions and accelerate economic growth to provide job opportunities for the local communities,” Rohit said.
According to Bain & Co associate partner Willy Chang, as a result of a lengthy lockdown and in addition to the strong growth of the digital economy, the company saw a sticking shift in Malaysia’s digital consumer behaviour.
“Coupled with the anticipated digital bank licenses, we are optimistic about the growth potential ahead,” he added.
Source: The Malaysian Reserve