While Malaysian government agencies see eCommerce as one of the key thriving cogs in the Digital Malaysia matrix, the sector's growth could chalk up even faster growth, some industry commenters recently told Computerworld Malaysia.
Home-grown Malaysian payment gateway provider iPay88, which is now an NTT Data company with MSC (Multimedia Supercorridor) Malaysia status, believes that eCommerce growth needs to take account of specific challenges in the region.
Co-founder and executive director Chan Kok Long (pic below) first announced that iPay88, which is eyeing global expansion, is now making moves across Asia Pacific, Bangladesh, Hong Kong and the Middle East,
Chan pointed out Bangladesh as an example of some of the issues hampering faster growth.
He admitted that Bangladesh though "a late entrant in the eCommerce sector, has recorded tremendous growth within a short time."
"The eCommerce industry in Bangladesh, like other developing countries, has a 'latecomer advantage'," he said. "However, it is encountering similar issues that we have encountered and addressed in SEA."
Cross- border issues
"Currently the sector is facing challenges such as delivery channels for its customers, affordability, erratic internet connections and online fraud," said Chan. "We believe [once the challenges are managed], eCommerce will be the next major driver of economic development in Bangladesh."
Since iPay88 has just ventured into Bangladesh, therefore no transactions are recorded yet, he added.
In Malaysia, government initiatives such as the Digital Free Trade Zone (DFTZ), recently launched by national ICT agency Malaysia Digital Economy Corporation (MDEC) with support from Alibaba's chairman Jack Ma, are expected to help industry players and startups with more simplified trade access to overseas markets.
MDEC has also spearheaded other initiatives including persuading SMEs to speed up the adoption of internet business processes, especially in view of the burgeoning Asean Economic Community pie (See - Why Malaysian companies must expand into ASEAN's US$48 billion pie: MDEC exclusive).
Chan said: "In the next two years, our growth in Malaysia is expected to be the largest ever in terms online transactions and sales volume. However our growth in Indonesia and the Philippines will eventually outrank Malaysia in terms of numbers of transactions and sales volumes as these countries have a larger population number and growing appetite for e-commerce."
He said iPay88 expected its revenue contribution from international markets to increase with its expansion plans. The company should double the sales volume from international markets compared to last year.
Steps toward global stage
He outlined some of the company's initial expansion story starting with Indonesia in 2006, followed by the Philippines in 2014.
Chan said Market expansion to a region as "diverse as ASEAN and Asia Pacific is not easy as each country's online payment environment is unique and business environment varies."
The opening of Indonesia and Philippines markets were important milestones, he said. "Our successful ventures in these two markets (Indonesia and the Philippines) have acted as a blueprint for us to continue exploring the other Southeast Asian markets."
The company's payment gateway systems support more than 70 percent of all eCommerce businesses in Malaysia. "To date, iPay88 has set footprints in almost all Southeast Asian countries including Cambodia, Indonesia, Thailand, Vietnam, Philippines and Singapore."
Besides Bangladesh, iPay88 is also actively looking into opportunities in the Middle East, Chan said. The company hoped to build a presence in APEC by the end of 2018.
Though Malaysia continued to lead in revenue contribution - iPay88's Q1 and Q2 performance in 2017 was contributed mainly by Malaysia, he said, "We are looking at a local: international revenue ratio of 80:20 by the end of 2018."
"While Malaysia still leads in terms of revenue growth, in terms of sales volume, we are seeing a 34 percent growth in Indonesia for Q1and Q2 of 2017 as compared to the same period in 2016. Number of transactions in Indonesia also grew by 97 percent in the same period," Chan said.
Meanwhile, the sales volume in the Philippines, surged by 64 percent and the number of transactions recorded a growth of 44 percent.
He ended with this observation: "Doing business online offers a lower cost of operations from many aspects - the biggest advantage of doing business online is having the capability to span across geographical borders, meaning that you can reach out to possibly more lucrative overseas market easily."
For some other recent Malaysian eCommerce news, see:
eCommerce Tracker: How PIKOM's new Asean alliance will tap Malaysia's 'incredible growth'
eCommerce Tracker: The Year of the Rooster looks good for Malaysia!
What eCommerce boosts will Malaysia receive from Alibaba's post DFTZ moves?
eCommerce Tracker: Malaysia deal to slash abandonment rate by 40 percent
eCommerce Tracker: Malaysian partnership solves 'last mile' challenge
eCommerce Tracker: Rainmakers offer one-stop boost to SMEs in Malaysia
The latest edition of this article lives at Computerworld Malaysia.
Sign up for Computerworld eNewsletters.