Hopping on the online bandwagon
E-commerce benefits businesses and consumers alike amid trying times
By Vigneswar Rajasurian email@example.com
Online shopping has grown more popular globally and Malaysia is no exception. With a relatively high internet penetration rate of over 80% and a growing appetite for e-commerce, it is hardly a surprise that Malaysians have turned to online shopping for the festive Raya season.
Coupled with the Covid-19 pandemic and travel restrictions imposed by the government, it would seem that online shopping is destined to play a more significant role in “the new normal”. Business owners and consumers alike stand to gain, as survival and necessity dictate the adoption of online shopping.
Convenience, pricing and variety
Tengku Muhammad Nasiruddin, 28, used online shopping to avoid long queues and is comfortable with buying anything online with the exception of electrical appliances. In lieu of the ongoing pandemic, he has ordered his baju melayu, sampin, kuih raya and other festive items from local online shops and boutiques.
Others such as Wafa Walam, 25, also shop online but take a more cautious approach and only source for tried and tested merchandise. “If there’s an outfit I’ve tried at the physical store and decided to not purchase at the time, I would find it online if I have a change of heart. Also, items I regularly use such as skin or haircare products I don’t mind buying online as it saves time and energy,” she said.
Wafa does shy away from purchasing electronics or clothing that may not fit well and in lieu of the pandemic, believes it would be more practical to re-use decor from yesteryears and wear last year’s baju kebaya. She does, nevertheless, choose to support local online businesses this year by buying Raya dishes, cookies and cakes.
The arguments for shopping online are compelling, even for the most reluctant of shoppers and its advantages well documented. According to a research paper titled E-Commerce: A Study on Online Shopping in Malaysia, how products are sold on the internet can be classified into two groups. These are for items that do not need to be seen or touched before purchases and experiential products that require physical interaction.
The research also cites a survey by ACNielsen Research on the reasons people shop online which include saving time/convenience (78%), better prices (51%), more selection (43%), easier shipping (40%), personalisation (28%) and the availability of more information on products (20%).
A slice of the pie
According to the JP Morgan 2019 Payment Trends – Global Insights Report, Malaysia’s four billion dollar e-commerce market has seen rapid growth in annual sales since 2015 and jumped by 47.8% in 2017 alone. The market is forecasted to grow at a compound annual growth rate of 24% until 2021.
These forecasts likely predate the Covid-19 pandemic, and it remains to be seen if the existence of a contagious virus outbreak serves to aggravate online sales or whether a possible recession will dampen this growth. Nevertheless, the fact remains that the market is vast and small businesses stand to benefit with a fair share of the e-commerce pie.
Avoiding costly rental at prime locations and other overheads provides cost savings to businesses that can be passed down to the consumers. What makes online shopping appealing is that it offers a 24-hour storefront with accessibility from almost anywhere. Couple this factor with the availability of a wider range of products, consumers who have tight work hours need not limit themselves to the physical space of a brick-and-mortar store.
Suri Daman, 45, runs a company that manufactures headscarves and specialises in ‘Slip-On Hijabs’ as the brand calls it. With a production facility in Senawang and a headcount of just 30 local employees, she is able to leverage on e-commerce to reach out to customers across Southeast Asia. “Being online also allows us to start the business with much lower investment, leaner inventories and workforce,” she added.
Suri was also asked about the influx of shoppers during Raya and said, “Raya period, historically, is the best time for fashion and hijab. However, this year, we were unsure what it would be like due to the Covid and MCO. Yet, we remain positive in trying to manoeuvre through the pandemic for the best possible outcome”.
The MCO had led to difficulties in logistics and raw materials, but Suri and her team pivoted quickly to serve more customers. She is running attractive promotions to pull in new and returning customers as well as engaging with audiences online via social media, among other means.
Gurmeet Kaur, 34, used her background in digital marketing to set up an online bazaar during Ramadan so SMEs, startups and home businesses can market their products digitally. The 26 to 28 vendors under her purview sell a variety of local cuisines as well as artisan soaps, homemade embellishments and other Raya related items. Her vendors also include RC Deaf Missions Malaysia that provides a livelihood for deaf employees by selling food and handmade ornaments.
“Demand is currently still there for food, drinks and small gift items (especially for Mother’s Day and Raya hampers). Nothing too expensive as everyone is still being prudent about their expenses since the situation is still uncertain” she said.
Making the leap
Indeed, the current onslaught of a global pandemic has visibly forced businesses to adapt, thereby hastening the adoption of digitalisation quickly. During a period of economic uncertainty and mass unemployment, many recently retrenched employees are also setting up online enterprises as a means of income.
This is now easier, said Charles Gregory who is the chief executive officer (CEO) of a local digital marketing training company and the president of Digital Marketing Association Malaysia (DMAM). Having provided corporate training to more than 250 businesses and thousands of individuals, Gregory concluded that it is simpler now for companies and aspiring entrepreneurs to start using e-commerce, especially given the many successful case studies.
“Without any direct costing, individuals can start an e-commerce business even without any product. You can sell other people’s products and get paid a commission”, he added. As an alternative to online marketplaces, Gregory said there are various platforms available to start one’s own e-commerce site including more cost-effective open source options. For those unwilling to invest in learning how to set up e-commerce sites, the market rate to purchase a curated site is from RM10,000 to RM15,000.
“Once the e-commerce site is set up, you don’t need an IT professional to manage it, but you might need a website admin to update the e-commerce Stock Keeping Units (SKU)”, he said. Gregory advised people to use this time to learn these additional skills so that one can have an alternative income stream.