In 2020, total e-commerce sales were estimated to be close to RM16 billion. Bank Negara Malaysia governor Nor Shamsiah Mohd Yunus recently said sales had nearly doubled since the start of the pandemic.
“While online retail sales are still fairly small at less than 10% of total retail sales, it is expected to trend higher as consumers continue to shift rapidly towards online spending, which encourages more SMEs (small and medium enterprises) to pivot towards e-commerce,” she said at the launch of the central bank’s annual report 2020.
The CEO of local fintech company Revenue Monster, Amanda Chin, spoke to FMT about huge opportunities for budding business people in the booming sector, but she said they must exercise the same caution as they would when embarking on any other business venture.
“Take the time to be thoroughly prepared before going into an online business. Sure, the potential is high and the entry barriers are low and it can be tempting to jump right in. But that’s where most businesses fail.”
While it has become increasingly easy to start an online business, with services cropping up to help people set up online merchants, manage transactions and conduct live sales, she said this did not mean success would come any easier than in traditional businesses.
“When it comes to building a successful online brand, there are many stumbling blocks, whether you’re creating and developing an enticing brand page online or converting views to sales or managing the payments and finances from there.
“This is why so many online businesses fail. They may have great ideas and it is undeniably easy to get started selling online but the difficulty curve is incredibly steep.”
On top of getting noticed in a field filled with established brands, Chin said, there were also the traditional retail aspects that must be considered.
“There is management of inventory and orders, keeping the books balanced, tracking and verifying all payments and more. Many online entrepreneurs nowadays start off with a novel product idea or approach in mind but don’t have much experience with these more technical aspects.”
However, she said passionate entrepreneurs should not be discouraged because, despite the potential pitfalls, there were a number of online services that could help make taking the plunge less daunting.
Chin expects the sector to display strong growth even as the pandemic subsides and physical businesses become more viable. She said there was only a low risk of getting squeezed out of the market with the return of normalcy.
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