From: http://marketing-interactive.com/news/25946
PayPal: Online Shopping Hits 1.8 Billion
Published: Apr 21, 2011
Malaysia - The size of the Malaysian online shopping market reached RM1.8 billion in 2010 according to PayPal's "Online and Mobile Shopping Insights" study.
PayPal estimates the market to grow to RM5 billion in 2014 and the study, conducted by The Nielsen Company, supported the country's reputation for being sophisticated and affluent online shoppers.
The survey results also showed that there were 1.1 million Malaysian online shoppers last year (above the age of 18) with an average spend per head of RM2,461, yet 70% of the total online shopping spend came from the middle income and above groups.
"With the online shopping market growing so quickly and nearly reaching the two billion Ringgit mark, Malaysians are finding great value in buying products and services via the Web as part of their daily lives," said Elias Ghanem (pictured), PayPal's managing director and general manager for Southeast Asia and India.
"In addition, Malaysians prefer to shop on local websites and are looking online for a wider range of higher-quality goods, not just the lowest price. So domestic retailers have a chance to compete with overseas websites and should set up their online stores now to capture a slice of the RM1.8 billion online shopping market," said Ghanem.
Malaysians spent the majority of their online retail purchases worth RM825 million on local websites (45%), compared to RM627 million on overseas websites (35%), and the remaining RM371 million (20%) on websites with unknown countries of origin.
Even when Malaysian online shoppers buy from overseas websites, they cite "unavailability" (65%), "greater choice" (55%) and "higher quality" (36%) as more important reasons than "less expensive" (35%), "better discounts" (32%) and "strong Malaysian Ringgit" (23%).
According to the e-commerce company, local merchants can be the biggest winners from the growth of the Malaysian online shopping market by providing a variety of high-quality goods on their online stores.
Besides providing the market size of the vibrant online shopping market, the study revealed insights into the attitudes and behaviours of Malaysians when buying online and on mobile devices.
Some key findings from the study include:
Online shopping is more than just airline and hotel bookings. A wide range of categories shows that online shopping is becoming more mainstream and a bigger part of Malaysians' daily lives:
- Travel = RM435 million (24%)
- Bill payments = RM329 million (18%)
- Entertainment and lifestyle = RM255 million (14%)
- IT and electronics = RM218 million (12%)
- General insurance = RM205 million (11%)
- Fashion and beauty = RM181 million (10%)
- Gifts and collectibles = RM68 million (4%)
Malaysians buy different items between domestic and cross-border online shopping.
- Malaysians purchased nearly 2.5 times as much airline tickets from local websites (RM173 million) compared to overseas websites (RM72 million).
- Financial products/services (RM78 million) and health/beauty products (RM29 million) are mainly purchased on local websites.
- Online purchases for clothings/shoes/accessories are slightly more on local websites (RM48 million) compared to overseas websites (RM41 million).
- Nearly twice as much spent online for books on overseas websites (RM63 million) compared to local websites (RM36 million).
- Nearly twice as much is spent online for movie/music/game downloads on overseas websites (RM51 million) compared to local websites (RM27 million).
- Malaysians' favourite countries for overseas online shopping were the US, Singapore, UK, China and Hong Kong.
Enhancing security can boost online spending.
- Four out of 10 Malaysian online shoppers said that current credit/debit card online security measures are inadequate.
- Nearly six out of 10 believe they are taking a risk every time they transact online with their credit/debit cards.
- However, increasing safety measures would convince nearly seven out of 10 to spend more online.
- The middle income group (personal earnings of RM4,001 to RM8,000), which accounts for the largest share of the online shopping market (42%), is the most willing to increase their online shopping if safety is improved (72%).
In the mobile shopping space, the study found that m-commerce is in its early stages, but has strong growth potential with over 254,000 online shoppers spending RM100 million via their mobile devices in 2010, approximately 6% of the online shopping market value
The top activity for mobile shoppers was paying bills on the go (22%), followed by buying low-priced items such as movie tickets (21%), books (15%) and movie/music/game downloads (14%) which led to an average mobile spend per head of RM388 in the past year.
Four out of 10 online shoppers are willing to make a purchase on their mobile phones with the top three barriers to mobile shopping being small screen size (48%), slow mobile Internet connection (48%) and security concerns (37%).
Based on the online and mobile shopping study results, Ghanem said the strong call-to-action for local merchants is to quickly adopt a multi-channel retail strategy.
"Provide greater product choice and higher quality items in the online store, and offer more secure online payment options. In order to sell to mobile shoppers, they should choose a safer mobile payment method that can be completed in as few clicks as possible," he added.
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