E-commerce platform Lazada said that the Malaysian digital economy is headed for more growth as more brands and businesses, especially small and medium enterprises (SMEs), go online. The boost is also supported by shoppers who are growing more comfortable with purchasing their everyday needs online.
According to the chief executive of Lazada Malaysia, Leo Chow, the Covid-19 pandemic and the movement control order (MCO) have fast-tracked the digital adoption among consumers and retailers.
Chow quoted figures from Vodus, an online market and consumer insights platform, which indicated that half of the Malaysian adult population had gone online to shop for non-food products during the MCO. Of these people, 35% of them only began shopping online after the implementation of the MCO, which then translates to a 53% spike in the population of online shoppers.
Meanwhile, Lazada’s own internal data that said the number of new sellers on its platform had grown by more than 200% during the first half of 2020. “It is also evident that merchants are responding to this behaviour by increasing their digital acceptance footprint,” said Chow, referring to consumers’ behaviour.
Chow further said that Malaysians are ready to accept technological advancements in payment solutions as they recognise the benefits of using digital payment solutions. He pointed out that digital payments are more convenient as shoppers and sellers no longer need to go through the hassle of handling physical money or visiting banks. It is also unhampered by physical distance, as well as more transparent, efficient, and cost-effective.
During emergencies that result in income shocks, such as during the current Covid-19 crisis, the speed with which digital payments are cleared also proves to be essential. Payments from abroad and financial aids from the government can be quickly disbursed to help with the people’s needs.
Moreover, Chow said that digital payments offer more safety as Malaysians will be less susceptible to street crimes since they do not need to physically travel about to receive payments. Digital payments are also secured with cutting-edge technologies, including point-to-point encryption, tokenisation, biometrics, out-of-band authentication, and one-time passwords (OTP).
Chow also noted that consumers’ preference for digital payments is reflected in the Lazada Wallet’s increasing popularity. “During our recent 7.7 Mid-Year Super Sale, we saw close to a 40% increase in Lazada Wallet’s adoption rate year-on-year, and today, one in three Lazada Malaysia customers opt for Lazada Wallet for their transactions,” he said. Lazada Wallet was launched in 2018, providing users with a better check-out experience and exclusive discounts.
Chow added that the government’s initiatives to build the nation’s digital infrastructure is set to spur Malaysia’s digital economy to greater heights, turning it into a digital economy powerhouse within the region.