Malaysia’s e-commerce industry has reached a value of RM24.6 billion ($5.8 billion) and is likely to experience further growth, according to a report by online shopping aggregator iPrice Group.

“Recently, Malaysia’s government has partnered with the world’s largest online business-to-business trading platform Alibaba Group to launch the world’s first Digital Free Trade Zone (DFTZ),” says Lee Kien Han, managing partner of local law firm Han & Partners. 

“It is a special free trade zone that will promote the growth of e-commerce, provide logistics as well as a platform for both small medium businesses and larger enterprises to conduct their digital businesses and services,” he explains.

E-commerce is expected to grow further through the online payment market in Malaysia, attributable to the implementation of both Alipay, by Alibaba’s payment arm Ant Financial Services Group, as well as Samsung Pay this year.

“Malaysia’s online retail market is expected to grow by 23 percent per year through to the year 2021, driven by electronics and media, which indicates that e-commerce is still rapidly growing in the retail market and is far from unleashing its full potential,” adds Alvin Lee Sze Chang, an associate with the Chinese practice group of Han & Partners.

“In addition, the increasing reliance by the consumers in the online service sectors (or e-services) such as online travel agencies, online insurance platform, online licensing, online brokerage services and so on, is also likely to boost the growth of e-commerce in the service sector at a reasonable pace,” Alvin Lee notes. 

Given the robust ecosystem, the outlook seems optimistic for those looking to hop on the country’s e-commerce industry bandwagon. 

“Generally, investors and businesses can get involved in the burgeoning e-commerce market of the country by participating and exploring the opportunities offers in the DFTZ. Small and medium sized enterprises (SMEs) can participate in the e-trade introduced by the Malaysian External Trade Development Corporation (MATRADE), which serves as a platform to encourage investors and business to join the international e-marketplaces,” points out Chiam Jef Fri, an associate with the Chinese practice group of Han & Partners.

“At the state level, the Selangor state government has established the Selangor Information Technology and E-commerce Council (Sitec), under the secretariat of Invest Selangor, to develop the state as a regional trading hub for e-commerce and to uplift the startup eco-system. Sitec has introduced several programmes to assist SMEs in the state to embrace e-commerce and to widen their market.”

RIGHT ASSISTANCE

But for those who are new to investing in Malaysia, getting the right assistance can make a huge difference in making the first few steps into uncharted territory. Fortunately, law firms like Han & Partners are there to help.  

“We offer a large variety of legal services covering advisory on Malaysia’s e-commerce laws, drafting of documents such as terms of use for websites, assisting the investors to comply with the internet and data protection regulations, licensing and protection of intellectual property rights amongst other services,” says Alvin Lee.  

“Apart from that, we also assist investors to set up their business operations in Malaysia, to understand the risks and take advantage of the steadily increasing number of state and federal laws, rules and regulations governing consumer oriented retail and business-to-business e-commerce,” adds Chiam. 

Lee Kien Han says Malaysian authorities are expecting the opportunities in e-commerce to continue booming. 

“Malaysia’s e-commerce market is likely to grow rapidly thanks to the range of new government stimulus policies. This year, the growth of e-commerce in Malaysia is around 10.8 percent and they are eyeing a 20.8 percent growth by the year 2020,” he notes.