Huge opportunities for SMEs in cross-border e-commerce: PayPal

• Increasing opportunities for local SMEs to expand via cross-border trade enabled by e-commerce platforms
• M-commerce market  forecast to reach RM3.43bil in 2015, which translates to 60% of online shopping market

THE rapid development of cross-border e-commerce has enabled the substantial growth of foreign trade export transactions by merchants in Malaysia to the world in the past 12 months, said PayPal.
 
According to the e-commerce solutions provider, internal data shows that in 2012, the fastest-growing markets in which PayPal merchants in Malaysia were continuing to pursue cross-border opportunities was the United States (19%), Australia (19%), Singapore (40%), Japan (57%) and China (35%), in terms of year-on-year (YoY) growth. 
 
In an email interview with Digital News Asia (DNA), Audrey Ottevanger, country manager for Malaysia and Philippines at PayPal, said what this represents is an “immense market opportunity” for small and medium-sized enterprises (SMEs) to reach out to the world.
 
She noted that in 2011, there were already over 1.6 million people shopping online in Malaysia, an increase of 44% from 2010.
 
“With a large population, growing penetration rates as the Digital Malaysia and Vision 2020 goals are realised, and more merchants leverage on the e-commerce opportunity, Malaysia has huge potential for continued and strong e-commerce growth in both domestic and cross-border markets,” she said.

Vision 2020 is the country's aim to become a developed nation by that year, while Digital Malaysia is a national programme to transform the country into a digital economy.
 
“It is a call to action for more businesses in Malaysia to recognise the benefits of e-commerce and get online. It is also critical for SMEs to identify the right e-commerce partners who can help them overcome the challenges of operating a successful e-commerce business,” she added.

Malaysia in regional e-commerce landscape

The “PayPal Online and Mobile Shopping Insights 2011” study conducted by Nielsen showed that Malaysia’s online commerce market grew 9% from RM1.8 billion (US$598 million) in 2010 to RM1.97 billion (US$654 million) in 2011.
 
Ottevanger (pic) said that the healthy growth in online spending in Malaysia is due to a number of factors: New consumers purchasing online for the first time; retailers establishing an online presence or increasing the sophistication of their current online offering; a number of major international retailers marketing directly to Malaysian consumers; and finally, the explosive growth of mobile commerce.
 
“Malaysia’s e-commerce market is making huge strides in the region. Our forecast shows that by 2015, the Malaysian online commerce market will hit RM5.76 billion,” she added.
 
The mobile commerce (m-commerce) market in Malaysia saw phenomenal growth from RM101 million (US$33 million) in 2010 to RM467 million (US$155 million) in 2011, representing more than a 370% jump in just one year.
 
The m-commerce market is also forecast to grow more than seven times to reach RM3.43 billion in 2015, which translates to 60% of the online shopping market.
 
This shows that m-commerce will play an increasingly significant role in the overall commerce market, as Internet-enabled mobile devices become a key part of Malaysians' daily lives.
 
In comparison, Singapore, with higher broadband and smartphone penetration rates, saw its online commerce market grow from S$1.1 billion (US$864 billion) in 2010 to S$1.4 billion (US$1.121 billion) in 2011.
 
The online commerce market is expected reach S$4.4 billion by 2015. The m-commerce market in Singapore grew from S$43 million (US$34 million) in 2010 to S$328 million (US$256 million) in 2011, and is expected to reach S$3.1 billion in 2015.
 
At the same time, in 2012, PayPal merchants in Malaysia were continuing to take advantage of high-growth online cross-border opportunities and seeing double-digit growth in key markets, similar to PayPal merchants in Singapore.
 
In Singapore, the fastest growing export markets were China (68%), Hong Kong (55%), Philippines (35%), Taiwan (22%) and Japan (22%), also in terms of YoY growth.

Next: Why aren't more SMEs embracing eCommerce?