by 
30th June 2024
How E-Commerce Growth Drives Demand for Industrial Properties in Malaysia
The pandemic has significantly altered consumer buying patterns, making online shopping a norm. This shift has accelerated the boom of e-commerce, creating a ripple effect on the industrial real estate market. Before delving into the facts and figures, let’s understand the definition of e-commerce.
What is E-Commerce?
E-commerce is the process of buying and selling goods and services over the internet. These transactions can occur between businesses (B2B), businesses and consumers (B2C), consumers to consumers, or consumers to businesses.
Top Marketplaces in Malaysia
Malaysia has several popular e-commerce marketplaces. Leading the pack is Shopee with 46.66 million visits per month, followed by Lazada with 13.26 million. Other notable marketplaces include PG Mall, Carousell, Zalora, eBay, Lelong, Goshop, Youbeli, and Prestomall.
The State of E-Commerce in Malaysia
In 2020, Malaysia’s e-commerce revenue reached $4 billion, contributing to a global growth rate of 26%. According to GlobalData’s eCommerce Analytics, Malaysia’s e-commerce market was projected to grow by 24.7% in 2021 and is expected to reach $12.6 billion by 2024, with a CAGR of 14.3% between 2020 and 2024.
High internet and mobile connectivity drive e-commerce usage in Malaysia. About 50% of the population, or 16.29 million Malaysians, are active online shoppers, with 82.9% using mobile devices for online purchases. Factors motivating Malaysians to shop online include product quality, price advantages, product range, and customer reviews. Exclusive deals, free shipping, and convenience also play significant roles.
Top-Selling Categories on E-Commerce Sites
During Shopee‘s Year-End Sale 2021, the top-selling categories included health and beauty products, baby and kids essentials, everyday consumer items, and electronics. Consumers frequently bought items such as hair shampoos, makeup, surgical masks, supplements, diapers, milk powder, snacks, pet supplies, and electronics like wireless earbuds and laptops.
Key E-Commerce Trends in Malaysia
- Merchants Establishing Their Own E-Commerce Platforms: To save on marketplace fees and compete more effectively, merchants like Senheng and Amazing Grace have created their own e-commerce platforms.
- Online Holiday Package Purchases: Consumers increasingly buy promotional holiday packages online, particularly during Malaysia Super Sale, Malaysia Mega Sale Carnival, and Malaysia Year-End Sale.
- Growth in Voucher and Coupon Purchases: There has been a significant increase in the purchase of discounted vouchers and coupons for food, beverages, hotel stays, and more. For instance, during the 11.11 sales, over 2.5 million offline payment vouchers were claimed.
- Direct-to-Consumer Connections: Manufacturers are now selling directly to consumers, cutting out the middleman and offering better pricing. This shift affects their warehouse and logistics infrastructure needs.
- Social Media Commerce: Platforms like Facebook, Instagram, and WhatsApp Business are helping SMEs set up online businesses, using features like Facebook Shop, product catalogues, and boosted posts to increase brand awareness and sales.
How E-Commerce Drives Demand for Industrial Properties
As e-commerce continues to grow, so does the demand for industrial properties such as warehouses and logistics centers. SMEs are increasingly adopting omnichannel strategies, combining online and offline presences to enhance customer experiences. This growth drives the need for storage facilities, retail spaces, and logistics hubs.
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Conclusion
The boom of e-commerce has reshaped the demand for industrial properties in Malaysia. By understanding and leveraging these market dynamics, businesses can effectively navigate this evolving landscape.
Stay updated with the latest news and trends in real estate and industrial property in Malaysia by following our website. We provide comprehensive insights, expert advice, and the latest developments to help you make informed decisions in the property market. Visit My Industrial Specialist for more information.
