iPay88 Sdn Bhd, an NTT Data company, as well as the Malaysian-based leading provider of online payment service and payment solution provider in ASEAN, shares some of its insights into the country's upcoming Services Industry's sub-sector of eCommerce.
Executive Director of iPay88 Chan Kok Long, says that the company's payment gateway systems support over 60% of eCommerce businesses in Malaysia.
He says, "From the transaction patterns and volume recorded from our systems, it is highly indicative that this Services sub-sector is poised for strong growth in 2016. In fact, within year 2015 of iPay88 operations, the total value of eCommerce transactions recorded in our payment systems have increased by 100%."
Hence, despite the anticipated economic slowdown and possible global recession that has permeated the local market and surrounding region, iPay88 reads new opportunities within the country's eCommerce sub-sector. The government projected that for Year 2016, the country is expected to have a GDP growth of 4.5 per cent. This is 0.3 percentage points lower from Year 2015's GDP growth recorded at 4.8 per cent.
Chan says, "Malaysia is ripe at the timing whereby the domestic market demand is well-supported by wide and stable online connectivity and broadband solutions. Additionally, website provider services are in abundance, IT security technologies, as well as ample government-lead, financial payment policies and initiatives to support more Malaysian companies in moving their business online."
eCommerce is not just Digital Presence
As of 2015, Bank Negara recorded that 50% of Malaysian companies have some form of digital presence - referring to any organization that has a website or has basic email or online communications. However, Chan points out that only a mere 5% of Malaysian companies have adopted eCommerce.
"Having a digital presence is not equivalent to eCommerce; because eCommerce requires that the business must have transacted online - via the usage of internet-based systems and networks, resulting in some form of income or revenue generation," he explains.
He also says that iPay88 is hopeful that the number of Malaysian companies adopting eCommerce will double by the end of 2016. "This is not an unrealistic expectation based on the statistics and online market trends that we have been observing over the recent years."
Other Drivers for eCommerce in a Downturn
As the economy gears down for the anticipated slowdown due to weakening currency and plunging oil prices, and retained interest rates - many companies across industries instinctively start to tighten their belts to weather the bad times.
However, Chan reminds of the different approach that eCommerce provides. "Doing business online offers a lower cost of operations from many aspects - the biggest advantage being the capability to span across geographical borders, meaning that you can reach out to possibly more lucrative overseas market easily," he says.
With more customers and orders from the online channels, Malaysian businesses can also expect to cut down on their spending from maintaining physical outlets, but instead, invest to improve delivery and after sales customer service.
"Additionally, there are many eCommerce models that have evolved to provide high value to businesses such as B2B platforms, marketplaces, agents and channels appointment and management services, real-time price comparisons, etc - all of which can greatly benefit the Malaysian companies that are keen on exploring ways to drive up their businesses," says Chan.
According to a Statista report, the revenue projected in the eCommerce market (excluding eServices) in Malaysia for 2016, is expected to touch USD991.1 million. On a more global scale, within the next five years, eCommerce sales worldwide is projected to eclipse USD3.5 trillion (from eMarketer report).
In ending, Chan says that iPay88's positive outlook for Malaysia's Services sub-sector of eCommerce is only evident of the long availing 'equilibrium' phenomenon of general business. "There will always be some sort of equilibrium in business. So even when the general economy may be going down, there will be growth in some other area - which is in this case is eCommerce and mobile commerce (mCommerce) for Malaysia in 2016."
"For the Year 2015, iPay88 has doubled its transactions volume in 2015," Chan states.