Online shopping is one of the most common pastimes of today. In Malaysia, that habit has resulted in explosive growth for the Southeast Asian e-commerce industry. With Statista estimating that the gross merchandise value of the Malaysia e-commerce market will reach USD 16 billion in 2025, Malaysia is clearly on the fast track to becoming a regional powerhouse. What is behind this rapid rise? The answer lies in a perfect storm of digital infrastructure, government initiatives and a mobile-engaged consumer base.

The Road to E-Commerce

The country’s humble e-commerce beginnings started in 2004 with the introduction of eBay Malaysia, though to little effect. While not entirely unsuccessful, the online platform failed to account for regional and cultural differences when it expanded to Southeast Asia. Its reputation as a second-hand goods marketplace, awkward auction-style format and lack of globalised digital payment structures left eBay to quietly fade from relevancy in Malaysia.

It was not until 2012, with the arrival of major players like Lazada, followed by Shopee in 2015, that the online shopping experience in the country truly began to evolve. Combined with the rise and advancement of internet services in the 2010s, these platforms have become staples in Malaysia. Fast forward to 2025, the country is on track to become a key regional player, with digital commerce agency TMO Group estimating over 56 million monthly site visits to Shopee alone.

A Mobile-First Malaysia

What is occurring within Malaysia’s digital revolution is more so m-commerce (mobile commerce) rather than e-commerce. As of November 2024, an estimated 89 percent of the population owned a smartphone. Moreover, most users prefer to spend their time browsing online shopping apps, making e-commerce a natural part of their everyday life. Software company Capillary Tech suggested that mobile commerce growth would outpace overall e-commerce growth, projected as a USD 8.9 billion market in 2023.

User-friendly shopping apps like Lazada and Shopee, have been key drivers in the switch to m-commerce. Many Southeast Asian consumers not only access these apps for traditional purchases but also for flash sales and exclusive mobile-only offers, increasing user engagement. For shoppers, it feels like a seamless experience: they can browse items on their mobile devices while on the go and take advantage of promotions on well-known flash sale days such as 11.11 and 12.12.

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Lazada is always strategic in its moves towards Malaysian consumers. Over 2020, it was reported that the e-commerce giant experienced an 80 percent increase in daily online transactions. Lazada — backed by tech titan Alibaba — were able to utilise an efficient logistics system and smooth digital infrastructure to fulfill Malaysian orders, driving more purchases. During the pandemic, the company largely invested into monthly online shopping events and social media marketing.

In 2022, Lazada played on Malaysian pride by introducing an inter-state competition. The “Lazada 12.12 1-2-Jus Showdown” encouraged shoppers to participate in the rock-paper-scissors style local game “1, 2, Jus” to win vouchers. If shoppers played in teams within their state, the state with the highest collective points would win RM 120,000 worth of Lazada vouchers in total. Mirroring the excitement of real game apps, consumers were treated to hidden points and rewards during the campaign — according to Lazada, 7,000 Malaysians received 20 to 50 points for participating in the game as a way of rewarding consumers for their engagement on the app. “Every state has something unique to be proud about, and we wanted to leverage this sense of pride to create a collective challenge,” Lazada Group CMO Marcus Chew said in a Marketing Interactive article.

Shopee — now the leading m-commerce platform in the country — is also not one to be ignored. CNA reported that the Singaporean tech company pulled ahead of Lazada as Malaysia’s market leader just before 2020. From the get-go, Shopee approached the Southeast Asian market aggressively, with even lower prices than their competitors. In 2018, they tapped global k-pop girl group Blackpink as their ambassadors, followed by footballer Cristiano Ronaldo in 2019 — both of whom have particularly dedicated followings in Malaysia and Southeast Asia. Their abundance of mobile promotions like the addicting Shopee Shake and the trivia-filled Shopee Quiz were cleverly created to garner loyal customers and captivate users who no doubt indulge in similar entertainment apps. As Dr Jeffrey Towson, managing partner at tech consulting firm TechMoat Consulting, told CNA, “The recent merger of video, commerce and social media into a new type of e-commerce means you need entirely new types of skills. Suddenly, you have to be an entertainment company, a retailer, and a logistics company.”

Shopee Live is a particularly successful area for the company, which has generated business for local Malaysian entrepreneurs. The Malaysian Reserve reported that Shopee Malaysia experienced a 113 percent increase in new sellers using Shopee Live to sell their products in 2024. For businesses like Petals Malaysia — a Selangor-based hair care brand — Shopee Live has proven transformative. Khairul Azman — the brand’s founder — shared that he sold over 26,000 units of their halal hair dye thanks to real-time interactions with the app’s livestream. Shopee’s various #ShopeeSapotLokal initiatives reward buyers with deep discounts if they purchase from Malaysian vendors, providing an influx of customers for local businesses.

Digital Building Blocks

While coupons and discounts will always be enticing to the everyday consumer, it is actually the convenience of delivery that Malaysians are so drawn to. In the third quarter of 2023, Statista calculated that 64.8 percent of Malaysian internet users said that free delivery was their top factor in completing online purchases. Around 50 percent of users said their top motivator was coupons and discounts, while around 40 percent said it was next-day delivery.

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The data is no secret. Various Southeast Asian e-commerce platforms work with a plethora of Malaysian third party logistics companies such as Ninja Van Malaysia, City-Link Express and GDEX, to ensure faster delivery. Retail Asia estimated that around 95 percent of Shopee’s orders are shipped out the same day. Their latest venture into quicker delivery is the Shopee International Platform (SIP), where SIP-approved Shopee sellers can sell and ship their items across other Southeast Asian regions with no additional costs. Currently, the programme serves Malaysia and Thailand, where customers in those regions can benefit from a timely order and delivery process for overseas goods.

Of course, underlying this robust online economy is the digital infrastructure. Two decades ago, Malaysia’s digital prowess was relatively low, with a small population of mobile phone users and lack of digital literacy. Only in the 2020s is there significant leaps forward for the country’s digital evolution. Much of this comes from the establishment of government programmes and initiatives like the National eCommerce Strategic Roadmap in 2016 and the Malaysia Digital Economy Blueprint in 2021. These programmes aim to help businesses reach global markets and improve the efficiency for online payments.

Shop Till You Drop, The Malaysian Way

Most importantly, it is the way Malaysian approach shopping that differs from other Southeast Asian regions. In an op-ed for the New Straits Times, Universiti Teknologi MARA lecturers Dr Geetha Muthusamy and Dr Ramesh Krishnan suggested that Malaysian consumers are more likely to purchase online compared to their counterparts in other Southeast Asian countries. What is more, a majority of online consumers do not even know what they want to buy, but simply “shop-hop” from as many as seven different m-commerce platforms until they click “checkout.” Malaysian customers have never been one to splurge too much at shopping malls, but the ease of online ordering bypasses all decision-making. The conversation is no longer about whether to buy or not, but instead, what to buy today.

Malaysia’s e-commerce growth mirrors other countries that came before it in the digital revolution. What sets it apart is its strong mobile-user population, who prefer to scroll on shop apps more than they do social media. Exacerbating this is the localisation (in both senses of the word) of retail businesses through main platforms Shopee and Lazada, enticingly marketed through daily promotions and 2-in-1 deals. Malaysia’s digital success may have occurred slightly later than its ASEAN neighbours, but its rapidly expanding mobile-savvy population and newly-minted tech infrastructures positions the country as an emerging leader in Southeast Asia’s digital economy.

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