Article by the Malaysia External Trade Development Corporation, MATRADE

Sourcing from Malaysia through E-Commerce

The global eCommerce market is expected to reach almost US$5 trillion in 2021, proving once again that the shift in online shopping triggered by the COVID-19 pandemic is not slowing down. In 2020, eCommerce registered a double-digit growth in almost all markets. China continues to lead the global eCommerce market, with total online sales of US$2.8 trillion. It also has the world’s most digital buyers, with 792.5 million, representing 33.3% of the global total.

The COVID-19 pandemic made a significant impact on eCommerce trends around the world. With physical stores shuttering overnight, consumers flocked to the internet for either essential goods and services or other products. Experts say the pandemic accelerated the shift to online shopping by as much as five years.

Online shoppers are increasingly looking outside their country’s borders for purchases. According to Facts and Factors recent research study, the global cross-border B2C eCommerce market size was estimated at US$780 billion in 2019 and is expected to reach US$4.8 trillion by 2026.

The Association of Southeast Asian Nations (ASEAN) and East Asia together has the world’s fastest-growing online market, with an existing internet user base of over 350 million users and an overall market size of US$72 billion in 2018.

In the global trade perspective, 2020 was a challenging year for all economic regions. Mr. Mohd Mustafa Abdul Aziz, Chief Executive Officer of MATRADE, noted that “Malaysia too, was severely affected especially in the manufacturing activities and the movement of goods and services, resulting in negative external trade growth in the first half of the year. However, Malaysia’s external trade rebounded in the second half of 2020 due to the progressive opening of the economy and gradual recovery of external demand.”

Malaysia’s trade surplus in 2020 recorded the 4th consecutive year of double-digit growth, with an expansion of 26.9% to RM184.79 billion compared to 2019. This was also the largest trade surplus thus far, representing Malaysia’s achievement in sustaining trade surplus for 23 consecutive years since 1998.

Malaysia’s trade with existing Free Trade Agreement (FTA) partners in 2020 stood at RM1.185 trillion and accounted for 66.7% of Malaysia’s total trade. Furthermore, the signing of the Regional Comprehensive Economic Partnership (RCEP), the biggest FTA in the world, will provide Malaysian companies and businesses access to more than a third of the world’s market, attract foreign direct investment and will be a boon to Malaysia’s export growth.

Mr. Mohd Mustafa also highlighted the digitalisation initiatives that MATRADE has embarked upon, “MATRADE is also embracing the new norm by changing its approach to cater for a more agile assistance and enhanced promotion activities to ensure Malaysian companies remain competitive. MATRADE made necessary shifts to adapt to the changes of doing business in the new norm, by leveraging on the usage of digital technology, such as virtual exhibitions, online B2B meetings and eCommerce”.

MATRADE is committed in driving cross-border eCommerce to ensure Malaysian exports remain competitive. Various efforts have been implemented under the National eCommerce Strategic Roadmap (NeSR) led by the Ministry of International Trade and Industry (MITI) since 2016 to achieve this objective through cooperation between ministries and government agencies as well as collaboration with industry players, both local and international.

Recognising the impact and potential of eCommerce to the nation’s trade, MATRADE has taken a progressive step by implementing the eTRADE Programme under the 11^th Malaysia Plan, 2016 – 2020. Aiming to accelerate the adoption of cross border eCommerce among Malaysian SMEs, the programme benefitted a total of 3,358 companies and generated RM376.3 million in export sales.

Exports were to more than 40 countries, consisting both traditional and emerging markets like the USA, Japan, China, ASEAN, Bhutan, Papua New Guinea and Mauritius. Major products exported include food and beverages, toiletries and cosmetics, furniture and apparels, garments and accessories.

Through the eTRADE Programme, MATRADE has taken the initiative to provide a springboard for Malaysian SMEs to adopt and leverage on eCommerce to expand their export markets and increase their reach globally. Now, buyers from all over the world can source for a variety of Malaysian products and services from the comfort of their own office or home.

There are many compelling reasons why international buyers should consider Malaysia as a preferred sourcing partner. Malaysia offers a wide range of diversified and high quality products and services. In the global supply chain, Malaysia ranked as one of the leading exporters worldwide for semiconductors, medical disposables and devices, processed food, building materials, healthcare, education, information and communication technology (ICT) and engineering services. In addition, Malaysia’s halal certification is recognised worldwide and the country is renowned for its high quality halal products.

Leveraging on the success of the eTRADE Programme, MATRADE has launched the eTRADE Programme 2.0 in March this year. The enhanced programme aims at not only to continue assisting new Malaysian companies to onboard cross-border eCommerce platforms but also to sustain those already participating in eCommerce.

“This initiative by the Ministry of International and Industry (MITI) through its agency MATRADE underlines our commitment to realize the aspirations of the Malaysia Digital Economy Blueprint (MyDigital), which was launched by YAB Prime Minister of Malaysia on 19^th February 2021. The eTRADE 2.0 Programme is in line with Thrust 2: Boost Economic Competitiveness Through Digitalisation”, said Mr. Mohd Mustafa.

“We believe cross-border eCommerce can provide a great opportunity for SMEs to ensure business continuity and resilience while at the same time offer a cost-effective platform for global buyers to source for Malaysian made products and services”.

For further information and assistance, please contact MATRADE via email at info@matrade.gov.my, MATRADE’s social media channels or visit www.matrade.gov.my