Malaysia’s Digital Economy Continues Growth Momentum
KUALA LUMPUR: The Malaysian digital economy is set to continue its growth momentum with more brands and businesses, especially the small and medium-sized enterprises (SMEs) digitalising their operations, said e-commerce platform, Lazada.
By the same token, shoppers too have become even more confident in shopping for their essential needs online.
Lazada Malaysia chief executive officer Leo Chow said the way consumers shop and pay for their purchases is evolving at a great pace, especially after the implementation of the Movement Control Order (MCO) on March 18.
“Malaysians appear upbeat about technological advancements in payment solutions as they are quick to recognise the benefits of using digital payment solutions,” he said to Bernama, adding that the Covid-19 pandemic has accelerated digital adoption among consumers, sellers, brands and retailers.
Chow said the number of new sellers on Lazada grew by more than 200 per cent in the first half of the year, and noted that Malaysians are also increasingly looking towards online solutions for their everyday needs.
He cited a recent study by market research and insights solutions provider, Vodus, which found that half of the Malaysian adult population had shopped for non-food items online during the MCO.
Among the online shoppers, 35 per cent only started shopping online for the first time when the MCO started, which translates to a 53 per cent growth in Malaysia’s online shopper population, he said. Chow said digital payments are safer, as well as more efficient and cost-effective as shoppers and sellers no longer need to handle physical money or go to the bank to deposit or withdraw money.
“All transactions are done online or virtually,” he said, adding that digital payments are virtually instantaneous and not geographically limited.
Chow said consumers recognise that cashless payments reduce the hassle of having to visit automated teller machines (ATM) to withdraw cash, eliminating the burden of keeping notes and coins and makes tracking of purchases easier and more transparent.
“It is also evident that merchants are responding to this behaviour by increasing their digital acceptance footprint,” he said.
In emergency situations that lead to unexpected income shocks such as the current Covid-19 crisis, speed and timely delivery can be of the essence. Digital payments or remittances from abroad and government assistance can be made with minimum delay when the need is greatest.
“We applaud the government’s efforts in accelerating the country’s migration to electronic payments (e-payments) to quicken the pace of e-wallet adoption,” he added.
There is also a huge safety and security factor to consider as well, said Chow. Oftentimes, recipients of cash payments have to travel considerable distances to receive their payments, leaving them particularly vulnerable to street crimes once they carry the cash due to the lack of transactional anonymity.
Conversely, digital payments today are secured with cutting-edge technologies, such as point-to-point encryption, tokenisation, passwords, biometrics, out-of-band authentication, one-time password (OTP) via SMS, as well as security questions.
As the government continues to support and focus its efforts on building the nation’s digital economy infrastructure through its various initiatives, forming greater public and private alliances to drive this national agenda, Malaysia is poised to demonstrate what a progressive country will look like as it transitions towards becoming a digital economy powerhouse in the region, added Chow.