KUALA LUMPUR: E-commerce players have lauded the government’s move to improve Malaysia’s digital infrastructure via the National Fiberisation and Connectivity Plan (NFCP), as the initiatives to be taken are expected to further accelerate the already rapid growth of the country’s e-commerce industry.

Online shopping platform Shopee told The Edge Financial Daily that the growth has been great so far, pointing out that there are about 25 million active Internet users in the country, representing 79% of the population, supported by high mobile penetration.

The ministry of domestic trade and consumer affairs also reported that almost 50% of the population shops online, while US consulting firm AT Kearney foresees e-commerce to account for 6.4% of Malaysia’s gross domestic product (GDP) by 2020, translating into about RM114 billion in sales revenue.

However, Shopee said the industry in Malaysia is still in its infancy, especially when compared with economic powerhouses such as China and the US.

“At the present moment, online retail in Malaysia accounts for less than 2% of total retail sales, while mature e-commerce markets like the US, Japan and South Korea enjoy a more than 10% e-commerce penetration rate.

“China has hit over 20% in terms of e-commerce penetration, so there is definitely a lot of room for the industry to grow,” said Shopee regional managing director Ian Ho.

He said the initiatives under NFCP — which aims to enhance network coverage and Internet speed, as well as improving accessibility for all segments of society — will be able to catalyse e-commerce in Malaysia, opening up opportunities for online platforms, sellers as well as the supporting industries surrounding the digital economy.

“The broader nationwide Internet accessibility will accelerate the adoption of e-commerce among local entrepreneurs, micro-businesses and SMEs (small and medium enterprises) as the need to thrive in a highly competitive marketplace presses on,” said Ho.

Besides that, having more Malaysian SMEs and businesses go digital will also act as a safeguard for the domestic economy, he said, for if the adoption of e-commerce by consumers exceeds that of SMEs, buyers may opt to purchase similar products and services offered by local SMEs from foreign merchants instead.

This is in line with the view of the Malaysian Communications and Multimedia Commission, which is spearheading the NFCP. Its chairman Al-Ishsal Ishak said the accelerated development of digital infrastructure will be able to support the growth of e-commerce.

“The foundational layer of infrastructure will clearly impact e-commerce. We believe that the stimulus and improvement to the network will be able to increase the penetration of e-commerce in the country,” he told a press conference after the launch of the NFCP last Thursday.

Al-Ishsal said better connectivity will support the government’s forecast of 20% annual growth in the e-commerce industry in 2020, versus 14.3% in 2017.

Meanwhile, better connectivity could also lead to the offering of new services by e-commerce platforms, such as in the case of Lazada Malaysia which hosted a live-stream fashion show, allowing shoppers to purchase products in real time.

“Through the NFCP programme, we can also help create access to entertainment, products and variety in rural areas,” said Lazada Malaysia chief executive officer Leo Chow.

“During Hari Raya a few months ago, Lazada brought the fashion runway to shoppers via an in-app (application) live stream where viewers were able to add products to their shopping carts in real time as models strutted down the runway.

“From that, we saw a 3.6 times uplift for the fashion category compared to a normal day. The Muslimah wear subcategory also saw three times the uplift in that period,” he added.

In the case of Shopee, the platform has expanded on its business via Shopee Live, an in-app live streaming feature, introduced earlier this year, which brings users closer to their favourite brands and sellers through a wide variety of content including product guides, reviews and demonstrations.

The platform has also ventured into the area of entertainment, experimenting with the live streaming of concerts, which would not have been possible without decent connectivity.

Earlier this month, the platform co-organised and hosted the Shopee X SIMPLYSITI Mini Concert at the Kuala Lumpur Convention Centre.

“Apart from the 1,000-strong audience who were present, fans of pop queen Datuk Seri Siti Nurhaliza from across Malaysia and as far as Sabah and Sarawak also got to watch and listen to her sing via Shopee Live that night.

“Without strong connectivity, people would not be able to live stream and find out more about the latest products, keep abreast of a new brand in the market or be part of an on-ground activation,” said Ho.