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The Current State of Malaysia's Cross-Border EC Market in 2024|Explanation of Regulations and Taxation System

I want to start cross-border e-commerce in Malaysia, but how big is the market?"

To answer these questions, this article explains the following in detail:

Current status of the cross-border EC market in Malaysia

Factors driving brand awareness and purchases by Malaysian consumers

Malaysia's import regulations and taxation system

Please read this article to learn more about how to develop your business in the Malaysian market.

Basic Information on Malaysia

First, here is a summary of basic information about Malaysia.


Approximately 330,000 square kilometers (about 0.9 times the size of Japan)


Approximately 33.5 million


Approximately 70% Malay (including 12% indigenous), 23% Chinese, 7% Indian

Official Languages

Malay (national language), Chinese, Tamil, English


Islam (federal religion) 64%, Buddhism 19%, Christianity 9%, Hinduism 6%, others 2%.

Major Industries

Mining, wholesale and retail trade, finance and insurance

Reference: Basic Data on Malaysia, Ministry of Foreign Affairs

According to worldometers, Malaysia ranks 48th in the world in terms of population, and its population growth over the past three years has increased by about 1% annually. In contrast, Japan's population has been decreasing at around 0.50% per year for the last three years.

Therefore, Malaysia can be said to be a more promising country than Japan.


Malaysia Population (2024) - Worldometer

Japan Population (2024) - Worldometer

The Current State of Malaysia's Cross-Border EC Market

According to statista, Malaysia's EC market is growing rapidly and is expected to reach US$7.88 billion by 2024 (¥1,239.8 billion as of June 2024).

This market is projected to expand at an annual growth rate of 11.25% to reach US$13.43 billion (2,111.8 billion yen) by 2029. Japan's growth rate is 9.23%, which indicates Malaysia's high growth rate.

The number of users is expected to reach 18.8 million in 2029, and the penetration rate to reach 52.8% in the same year (31.4% in 2024).

According to DataReportal's research, electronics, clothing, and food are the top three best-selling products by category, with consumer electronics growing 15.4% year over year.

With the Malaysian e-commerce market forecast to expand at an annual growth rate of 11.25% in the coming years, the market size of the categories we plan to enter is likely to increase in the future.

Factors Driving Brand Awareness and Purchase by Malaysian Consumers

According to the following data, SNS, search engines, and e-commerce sites are the top triggers for brand recognition.

Since SNS ranks 12th in Japan, it can be said that SNS operation is essential for cross-border EC in Malaysia.

Free shipping, coupons/discounts, and consumer reviews are the most important factors that encourage purchase.

While free shipping and coupons/discounts may increase the cost of customer acquisition, in the long run, they are expected to be worth more than the cost as they increase brand awareness.

In addition, consumer reviews are a purchase decision, and from an SEO perspective, they also improve website credibility, resulting in increased traffic.

Import Regulations and Taxation in Malaysia

Malaysia also has import duties. This depends on the type of goods and the country of origin. Tariff rates are free trade

Import duties also exist in Malaysia. This depends on the type of goods and the country of origin. Tariff rates are often affected by free trade agreements (FTAs), so imports from countries with which Malaysia has FTAs may have lower or no duties. Therefore, obtaining proof of origin for products can be effective in reducing tariff costs.

Furthermore, since the Malaysian tax system is subject to fluctuations, it is recommended to regularly check the latest tax information and work with your tax advisor or local agent. This will reduce the risk of unexpected costs and allow for more effective pricing and financial planning.

The tax rates are summarized below with reference to WISE with respect to tax rates.

Tax Rate

Goods and services

Standard tax rate (10%)

Most goods and services

Reduced tax rate (6%)

Restaurants, accommodations, car rentals, repairs, domestic flights, insurance, credit cards, legal and accounting business consulting, electricity, telecommunications, television broadcasting, etc.

Reduced tax rate (5%)

Foodstuffs, petroleum, building materials, IT and telecommunications hardware and materials

Tax exemption (0%)

Agricultural products, foodstuffs (oil, salt, flour, etc.), livestock and meat, eggs, fish, etc.

Popular payment methods in Malaysia and their usage rates

The most popular payment methods used in Malaysia are digital & mobile wallets at 24.0%, debit & credit cards at 28.0%, and bank transfers at 37.0%.

In Japan, 12.3% used digital & mobile wallets, 64.2% debit & credit cards, and 7.1% bank transfers.

Compared to Japan, there is no bias toward payment methods in Malaysia, so it can be said that the ability to make payments via digital & mobile wallets, card payments, or bank transfers will lead to higher purchase rates.

Two popular cross-border e-commerce platforms in Malaysia

Based on ecommercedb's research, we will explain two popular cross-border EC platforms in Malaysia.

The platforms described here are not in-house EC, but rather mall-type EC sites. By using this mall EC, in addition to gaining early recognition, you can focus on the quality of your products by having the platform take care of logistics and customer service management.


Source: Shopee Malaysia

Founded in 2015, Shopee is a platform from Singapore that is rapidly expanding its presence in Southeast Asian countries.

Shopee started as a C-to-C and has now evolved into a hybrid B-to-C model, with sellers ranging from small local businesses to large international corporations.

The Shopee features very low transaction costs and a friendly policy for both sellers and buyers.

For Japanese companies considering cross-border e-commerce, Shopee can increase brand awareness and reach new customer segments in the Malaysian market.


Source: SHEIN Malaysia

Shein is a global, fashion-centric e-commerce site with particular strength in apparel products. It offers a wide range of international shipping options, making it an easy-to-use platform for cross-border e-commerce.

Originally founded in China, Shein is a large B-to-C e-commerce site with a global focus on fashion. It is particularly popular with younger users and offers the latest trends in apparel at affordable prices.

Shein actively engages in influencer marketing and social networking advertising to effectively increase brand awareness and engagement.

In addition, Shein emphasizes data analysis and offers suggestions to optimize marketing strategies and inventory management.

Cautions for Cross-border EC in Malaysia

Below is a summary of precautions for cross-border e-commerce in Malaysia.

Points to Note


Balance shipping costs and delivery time.

Because Malaysia is geographically extensive, it is necessary to clarify delivery costs and delivery times. Also, offer trackable delivery options to gain customer confidence.

Cultural and Market Understanding

Since the population is approximately 70% Malay, 23% Chinese, and 7% Indian, this diversity should be taken into account when marketing, and approaches should be made with an awareness of cultural backgrounds and language differences.

We recommend that the above measures be taken after researching the latest information with local native marketers.

Frequently Asked Questions about Malaysia Cross-border EC

The following frequently asked questions regarding Malaysian cross-border EC are explained.

  • What are the legal requirements for cross-border EC in Malaysia?

  • In which languages should I take measures for cross-border EC in Malaysia?

What are the legal procedures required to start an e-commerce business in Malaysia?

You will need to register with the Malaysia Enterprise Commission (SSM).

Also, according to MahWengKwai & Associate, it is not necessary to establish a local company in Malaysia for an online corporation like a cross-border EC, but if you want to establish a local company, please refer to JETORO's procedures and required documents for establishing a company for foreign companies.

Q. In which languages should I take measures for cross-border EC in Malaysia?

A.Malay is the official language in Malaysia, but English is also widely understood. By providing product pages and customer support in both English and Malay, you can reach a wider customer base.

TheDigitalX supports cross-border EC strategy & operations in Malaysia

If you have any concerns about cross-border EC strategy planning and operations in Malaysia, please contact The Digital X.

Our local native marketers and specialists in Japan will support you.

Please feel free to contact us with any questions or concerns you may have.

We look forward to hearing from you.

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