Unlocking Malaysia’s e-commerce growth: The role of logistics

Malaysia’s strategic position in Southeast Asia’s e-commerce landscape

Malaysia has steadily emerged as a key player in Southeast Asia’s digital economy, ranking second in regional e-commerce performance – narrowly edging ahead of Indonesia and Thailand – according to the perceptions of the experts surveyed in our study. With high mobile penetration and a digitally savvy population, Malaysia is poised to cement its role as a vital hub for the region. Despite these advantages, Singapore leads the pack, with 59% of experts ranking it first for its advanced infrastructure and strong government backing. Malaysia must close the innovation and logistics gaps to compete at this level.

The logistics sector: A backbone in need of strengthening

Logistics is the critical lifeline of any e-commerce ecosystem, and in Malaysia, it has become a double-edged sword. High logistical costs, especially for shipping between Peninsular and East Malaysia, are major bottlenecks that stifle business growth: only 6 of 17 experts in our study considered Malaysia’s logistics infrastructure as supportive of sector development. For those who feel the system is hindering progress, the accumulation of costs borne by sellers such as rising logistics expenses, import costs, and taxes, combined with currency fluctuations, is making it increasingly challenging for them to remain cost competitive.

Advanced logistics technologies

Experts in our study emphasised the need to prioritise the establishment of regional e-fulfillment centres to tackle last-mile delivery challenges and streamline logistics nationwide, a move that could greatly enhance Malaysia’s regional competitiveness. Advanced logistics technologies such as AI-powered route optimisation and real-time tracking, hold the promise of unlocking greater efficiencies. However, the bare truth remains that rising base costs of logistics pose a serious threat for sellers, creating a ripple effect that erodes already slim profit margins and places smaller players in an increasingly precarious position.

The role of public-private collaboration in driving growth

Insights from the study’s experts highlighted that aligning public and private efforts is key to positioning Malaysia as a competitive e-commerce and logistics hub in Southeast Asia, unlocking new opportunities and shared prosperity for the sector. This is especially evident as leading e-commerce nations thrive on a symbiotic relationship between public and private sectors. For Malaysia to achieve a similar transformation, collaboration among e-commerce platforms, third-party logistics providers, and government bodies will be essential to addressing last-mile delivery inefficiencies and cross-border shipping complexities.

A call to action for Malaysia’s e-commerce future

Malaysia’s e-commerce story is one of great promise, but the next chapter depends on decisive action. Gross Merchandise Value in Malaysia is expected to double by 2030, but this forecast growth rate lags some of its Southeast Asian neighbours. It can be said that the stakes have never been higher. The findings in our whitepaper illuminate the path forward: invest in logistics innovation, foster inclusive public-private dialogue, regulate with dexterity and creativity, and build infrastructure that supports both urban and rural markets.

Conclusion

Malaysia has the potential to secure its position as a regional leader, delivering prosperity to businesses and consumers alike. By addressing logistical inefficiencies head-on, Malaysia can unlock its e-commerce growth and capitalise on its strategic position in Southeast Asia. We invite policymakers, industry leaders, and stakeholders to join this journey of transformation, ensuring that Malaysia realises its e-commerce potential.

FAQs

Q: What is the current state of Malaysia’s e-commerce landscape?
A: Malaysia has emerged as a key player in Southeast Asia’s digital economy, ranking second in regional e-commerce performance.

Q: What are the major challenges facing Malaysia’s e-commerce sector?
A: High logistical costs, especially for shipping between Peninsular and East Malaysia, are major bottlenecks that stifle business growth.

Q: How can Malaysia address these challenges?
A: By investing in logistics innovation, fostering inclusive public-private dialogue, regulating with dexterity and creativity, and building infrastructure that supports both urban and rural markets.

Q: What is the potential for Malaysia’s e-commerce growth?
A: Gross Merchandise Value in Malaysia is expected to double by 2030, but this forecast growth rate lags some of its Southeast Asian neighbours.