- The Digital X
- Jul 4
- 6 min read
Updated: 5 days ago
“How big is the cross-border e-commerce market in Malaysia?”
To answer this question, this article will explore the following in detail:
This article offers valuable insights for businesses looking to enter the Malaysian market—be sure to read it through for strategic guidance.
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Key Facts About Malaysia
Let's start with an overview of essential information about Malaysia:
Category | Details |
Land Area | Approximately 330,000 km² (about 90% the size of Japan) |
Population | Approximately 33.5 million people |
Ethnic Composition | 70% Malay (including indigenous peoples), 23% Chinese, 7% Indian |
Official Languages | Malay (national language), Chinese, Tamil, English |
Religions | 64% Islam (official religion), 19% Buddhism, 9% Christianity, 6% Hinduism, 2% Others |
Major Industries | Mining, wholesale and retail, finance and insurance |
Reference: Ministry of Foreign Affairs of Japan
According to Worldometer, Malaysia ranks 48th globally in population. Over the past three years, its population has steadily increased at a rate of about 1% annually.
In contrast, Japan’s population has declined by roughly 0.5% per year during the same period.
This demographic trend suggests that Malaysia offers greater long-term market potential than Japan.
Reference: Worldometer, Worldometer
Current Landscape of Malaysia’s Cross-Border E-Commerce Market
According to Statista, Malaysia’s e-commerce market is experiencing rapid growth. By 2024, it is projected to reach USD 7.88 billion (approximately ¥1.24 trillion as of June 2024). The market is expected to grow at an annual rate of 11.25%, reaching USD 13.43 billion (around ¥2.11 trillion) by 2029.
In comparison, Japan’s annual growth rate stands at 9.23%, underscoring the strong growth potential of the Malaysian market.
The number of e-commerce users in Malaysia is expected to climb to 18.8 million by 2029, with market penetration increasing to 52.8%, up from 31.4% in 2024.
A survey by DataReportal highlights the top-performing product categories in Malaysia’s e-commerce space: consumer electronics, fashion, and food products. Notably, consumer electronics have seen a 15.4% year-over-year increase, signaling robust demand in this segment.
Given the projected annual growth rate of 11.25%, Malaysia’s e-commerce market is expected to continue expanding significantly in the coming years. This suggests that the market size for most product categories — including those you may be planning to enter — is also likely to grow steadily, making it a promising time to consider cross-border e-commerce expansion into Malaysia.
Key Drivers of Brand Awareness and Purchase Intent Among Malaysian Consumers
Recent data reveals that social media, search engines, and e-commerce platforms are the leading channels through which Malaysian consumers discover new brands. These digital mediums are not only effective for raising brand visibility but also play a crucial role in influencing purchase decisions. For businesses entering the Malaysian cross-border e-commerce market, aligning marketing strategies with these channels is essential for success.
Key Purchase Motivators and the Importance of Social Media in Malaysia
Unlike Japan, where social media ranks only 12th for brand discovery, Malaysian consumers heavily rely on social platforms — making social media marketing a must for cross-border e-commerce businesses targeting this market.
When it comes to converting interest into purchases, the top three motivators are:
Free shipping
Discounts and coupons
Customer reviews
These elements should be central to any digital commerce strategy aiming to drive conversions in Malaysia.
Offering free shipping and discounts may lead to increased customer acquisition costs in the short term, but they contribute significantly to brand awareness and customer retention, making them valuable long-term strategies.
Additionally, consumer reviews play a key role in influencing purchase decisions and enhancing website credibility from an SEO standpoint, ultimately driving more traffic and improving overall conversion rates.
Import Regulations and Taxation in Malaysia
Malaysia imposes import duties that vary depending on the type of product and its country of origin. These duty rates are often influenced by Free Trade Agreements (FTAs), meaning products imported from countries with which Malaysia has signed FTAs may be subject to reduced or zero tariffs.
To minimize import costs, it is highly recommended to obtain a certificate of origin for your products.
Additionally, Malaysia’s tax regulations are subject to change. To stay compliant and avoid unexpected costs, businesses should regularly review the latest tax laws and collaborate closely with tax advisors or local agents.
Doing so will help reduce financial risks, enable more accurate pricing strategies, and support effective financial planning.
A summary of the current tax rates (based on Wise data) is provided below.
Tax Rates in Malaysia
Tax Rate Type | Applicable Goods & Services |
Standard Rate (10%) | Most general goods & services |
Reduced Rate (6%) | Restaurants, accomodations, car rentals, repair services, domestic flights, insurance, credit cards, legal & accounting consulting, electricity, telecommunications, TV broadcasting |
Reduced Rate (5%) | Groceries, petroleum, building materials, IT & telecommunications hardware and materials |
Zero Rate (0%) | Agricultural products, basic food items (oil, salt, flour, etc.), livestock/meat, eggs, fish |
Most Popular Payment Methods in Malaysia and Their Usage Rates
In Malaysia, the most commonly used payment methods are as follows:
Bank transfers: 37.0%
Debit & credit cards: 28.0%
Digital & mobile wallets: 24.0%
In comparison, Japan shows a different pattern in payment preferences:
Digital & mobile wallets: 12.3%
Debit & credit cards: 64.2%
Bank transfers: 7.1%
This contrast highlights a key regional difference — while Japan still heavily relies on card payments, Malaysia has a more balanced spread across payment types. For cross-border sellers targeting Malaysia, optimizing checkout flows for bank transfers and digital wallets is critical to meeting local expectations and reducing cart abandonment.
Top 2 Cross-Border E-Commerce Platforms in Malaysia
Based on findings from ecommercedb, we’ve identified two of the most popular cross-border e-commerce platforms in Malaysia.
The platforms introduced here are not standalone brand-owned websites, but marketplace-based platforms.
Using marketplace platforms offers significant advantages: not only can businesses gain early brand exposure, but they also benefit from platform-managed logistics and customer service — allowing sellers to focus on product quality and growth.
Shopee
Founded in 2015, Shopee is a Singapore-based platform that has rapidly expanded its presence across Southeast Asia, including Malaysia.
Originally launched as a C2C platform, Shopee has evolved into a hybrid B2C model, attracting a wide range of sellers — from small local businesses to large international enterprises.
One of Shopee’s key advantages lies in its low transaction costs and seller- and buyer-friendly policies, making it highly accessible and scalable.
For Japanese businesses exploring cross-border e-commerce, Shopee offers an ideal entry point into the Malaysian market — providing strong brand visibility and the ability to reach new customer segments efficiently.
SHEIN
Shein is a global e-commerce platform specializing in fashion, with a strong competitive edge in apparel.
Originally founded in China, Shein has grown into a large-scale B2C e-commerce site with a worldwide presence, particularly popular among younger demographics for offering trend-driven fashion at affordable prices.
The platform supports a wide range of international shipping options, making it a convenient choice for cross-border e-commerce expansion.
Shein is known for its aggressive influencer marketing and social media advertising, which enables businesses to boost brand awareness and engagement effectively.
Additionally, Shein emphasizes data-driven operations, providing sellers with optimized strategies for marketing and inventory management, which can lead to greater operational efficiency and sales performance.
Key Considerations for Cross-Border E-Commerce in Malaysia
When entering the Malaysian market through cross-border e-commerce, keep the following points in mind:
Consideration | Overview |
Balancing Shipping Costs and Delivery Time | Malaysia spans a broad geographic area, so it’s essential to clearly communicate shipping fees and delivery timelines. Offering trackable shipping options helps build customer trust. |
Understanding Cultural and Market Diversity | With approximately 70% Malay, 23% Chinese, and 7% Indian population, your marketing strategies must account for cultural and linguistic differences. Collaborating with local marketing experts is highly recommended for accurate insights and effective localization. |
It is recommended to work with local native marketers and stay up to date with the latest market information to develop effective strategies and avoid potential missteps.
Frequently Asked Questions (FAQ)
What legal requirements are necessary to start cross-border e-commerce in Malaysia?
To conduct e-commerce in Malaysia, businesses must register with the Companies Commission of Malaysia (SSM).
According to MahWengKwai & Associates, establishing a local entity is not mandatory for operating an online cross-border e-commerce business. However, if your company intends to establish a local subsidiary, it’s recommended to consult JETRO’s guidelines for foreign company registration and required documentation.
What language should be used for cross-border e-commerce in Malaysia?
While Bahasa Malaysia is the official language, English is widely understood and accepted — especially in business and digital communication. To maximize reach and customer trust, it is recommended to provide both product descriptions and customer support in both English and Malay.
How can I succeed in doing business in Malaysia?
We’ve outlined the key success factors for entering and growing in the Malaysian market in this article:
Key Strategies for Successful Market Entry in Malaysia
What is the current state of digital marketing in Malaysia?
To better understand the digital landscape, market trends, and local consumer behavior, refer to this article:
Malaysia Digital Marketing Landscape: 2024 Trends & Insights
The Digital X Supports Your Cross-Border E-Commerce Expansion into Malaysia
If you’re unsure about how to plan and execute your cross-border e-commerce strategy in Malaysia, The Digital X is here to help.
Our team combines native Malaysian marketers with specialists based in Japan, offering end-to-end support tailored to your business needs.
Whether you’re concerned about local compliance, logistics, platform selection, or marketing execution — we’re ready to assist.
Get in touch with us today through our contact form and let’s discuss how we can support your growth in the Malaysian market.