Malaysia’s e-commerce ‘penetration’ to double in 2016: iPay88

• Transaction volume doubled in 2015, 63% growth expected this year
• Aims to grow merchant base from 8,300 to 10,000 too

 
DESPITE the economic gloom, with GDP (gross domestic products) growth expected to slow down, Kuala Lumpur-based online payment systems provider iPay88 Sdn Bhd believes that the e-commerce sector in Malaysia is poised for “strong growth” in 2016.
 
The time is ripe, with domestic market demand “well-supported by wide and stable online connectivity and broadband solutions,” according to its cofounder and executive director Chan Kok Long (pic above).
 
“We see more and more Malaysian companies moving their businesses online,” he told a recent media briefing at iPay88’s office in Kuala Lumpur.
 
READ ALSO: Despite economic doldrums, 11street bullish on Malaysia
 
Only a mere 5% of Malaysia companies have adopted e-commerce, Chan said, adding however that he is hopeful that the percentage will double by the end of 2016.
 
“This isn’t an unrealistic expectation based on the statistics and online market trends we’ve been observing over recent years,” he argued.
 
According to Statista, the e-commerce market (excluding e-services) in Malaysia for 2016 is expected to reach US$991.1 million (RM4.1 billion) in revenue, while the global e-commerce industry is projected to surpass US$3.5 trillion (RM14.5 trillion) within the next five years. [RM1 = US$0.24 at current rates]
 
Chan said his own prediction is based on the transaction patterns and volume recorded on iPay88’s payments system, which he claimed owns a 60% share of the e-commerce market in Malaysia.
 
“Online marketplaces like Zalora, 11street, Lazada, Shoppee, Rakuten and others contributed more than 40% of iPay88’s total transactions,” he said.
 
“But e-commerce sub-sectors like the travel and airline industries will also contribute major growth for us in terms of transaction volume,” he added.
 
According to Chan, in 2015, iPay88’s transaction volume doubled to RM1.6 billion (US$3.9 million) from the previous year, and he expected this to grow 63% to RM2.6 billion (US$6.3 million) in 2016.
 
“This shows that the e-commerce industry can grow at a very high rate – you can still record a double-digit growth rate.
 
“If you ask me, the only other industry that used to record such a high growth rate was the smartphone industry,” he said.
 
That isn’t the only metric iPay88 expects to grow. Chan is targeting to grow iPay88’s merchant base from 8,300 to 10,000 by end-2016.
 
“That’s a 21% growth rate, which means we’ll be signing up about 140 new merchants every month,” he said.
 
iPay88 is pretty much the leading online payments provider in South-East Asia, its services available in Indonesia, Malaysia, Singapore, Thailand, the Philippines and Vietnam.
 
Within the next 12 months, it would also be expanding its physical presence to Thailand and Vietnam, leveraging on NTT Data’s infrastructure in the region to help it set up local operations in both these markets.
 
Last September, the Japanese giant acquired a 50%+ stake in the online payment systems provider.
 
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