Image (IDG) - eCommerce
Malaysia can expect a better year for its burgeoning Digital Economy due to rising consumer confidence in mobile shopping platforms and new payment options, according to new ASEAN data released in Kuala Lumpur in the run up to Chinese New Year celebrations.
"The Chinese Year of the Rooster 2017 will be an even better year," confirmed Chan Kok Long, who is executive director and co-founder of NTT data company iPay88, which provides online payment platform services to the ASEAN region.
Chan said that new internal statistics, which help to track major online shopping trends, also point to certain recent shifts in Malaysia. "To date, iPay88 recorded 38.2 million online transactions via its payment gateway systems, which is a significant increment of 161 per cent from 14.6 million in 2015. Currently, iPay88 represents over 70 per cent of Malaysia's entire online payment system transactions."
"These statistics have proven that mobile commerce growth in 2016 is for outpacing eCommerce and brick-and-mortar, whereby savvy retailers are moving to leverage the mCommerce space," said Chan, the findings echoing industry sentiments for 2017 as well as national ICT industry association PIKOM's recent eCommerce chapter launch,
"This [mCommerce] trend will continue in 2017," he said. "All the collective signs in our online payment gateway show that even after a turbulent 2016, the coming year of the fiery Rooster will be a better year - attributed to a few key predictive factors."
Photo - (From left): Chan Kok Long, co-founder cum Executive Director of iPay88; and Tohru Yoshioka, Executive Director of iPay88.
Why the shift to Mobile?
Diving deeper into the data, Chan said that the increase of Malaysian consumers making online purchases using mobile phone was encouraging. "iPay88 statistics show that the total transactions generated by mobile commerce has grown significantly by 148.9 per cent from 3.7 million in 2015 to 9.3 million in 2016."
"This compares favourably to online shopping on desktop only showed a small 29.7 percent rise, from 5.8 million transactions in 2015 to 7.6 million transactions in 2016," he said.
"The new statistics have proven that mobile commerce growth in 2016 is far outpacing eCommerce and brick-and-mortar, whereby savvy retailers are moving to leverage the mCommerce space," said Chan.
Looking ahead beyond the start of Chinese New Year this coming weekend, he said: "iPay88 expects that in 2017, mobile application-based visits to the retail category will also finally surpass mobile web visits, while desktop visits will gradually see a decline in growth."
"Retailers are now taking a mobile-first approach to desktop and these retailers are adding value of mobile through supporting contents," he added. "For instance, mobile application-based shoppers are frequently prompted instantaneously of special discounts at designated locations."
As to why the deepening confidence in mobile shopping, Chan confirmed: "There has been an increasing number of users of mobile payments since Apple [Apple Pay], Samsung [Samsung Pay] and Google [Android Pay] addressed security concerns by introducing 'tokenisation' in the payment infrastructure, also supplemented by biometrics on the smartphone."
Signs of growth
"We see this as a growing trend especially the millennial have started to accept eCommerce as part of their lifestyle," said Chan. "Since it is so convenient, more items despite it is only a small daily needed items, such as groceries, are being purchased online."
He said the data further showed that overall, online shoppers on MarketPlaces grew in volume by 182.84 percent. Breakdown of some areas of volume growth are as follows:
- Delivery services increased by 243 percent
- Telco services for bill payment increased by 81 percent
- Transportation services increased by 67 percent
- Food and beverage sales increased by 45 percent
- Gifts and merchandise increased by 19 percent.
However, iPay88 did note that the average 'Order Value', or value of online transactional purchase at MarketPlace, declined slightly at RM104 (US$23.44) in Year 2016, as compared to RM115 (US$25.92) in the year 2015.
Moving on, Chan said 2016 saw alternative payment methods, though online banking continued to lead as the preferred payment option when comes to eCommerce and online shopping.
iPay88 system showed that online banking recorded 11.5 million transactions as compared to 5.3 million credit card transactions in 2016. "This trend follows back from Year 2015 whereby there were 5.8 million transactions via online banking as compared to only 3.7 million transactions via credit card."
"In Year 2017, we expect online banking to continue its high popularity as the preferred method of eCommerce purchases, as consumers become more wary about spending on credit - especially as the economy still looks uncertain," said Chan.
'Virtual' payment options
He also noted the market's potential shift from using a physical credit card for online shopping to a 'virtual' payment alternative.
"Rather than a fixed number that can be re-used for multiple transactions, a virtual payment uses a one-time number and this protects shoppers from fraud," Chan said. "Virtual payment makes recurring payment easier and safer as actual payment details are never exposed."
"Also, virtual payment alternatives are also more seamless and provides a better user experience which in return leads to better conversion and higher sales," he said.
Overall, Chan said that the statistics pointed to "a very positive about the limitless opportunities of eCommerce in 2017 for Malaysia. By sharing iPay88's findings, we hope to help eCommerce merchants and business owners strategize better marketing plans to exceed customers' expectations from online retail."
"Although the size of ASEAN's internet users and digital buyers are comparable with Japan, it still remains less than one percent of the global eCommerce volume," he added. "This shows that there is a huge opportunity for ASEAN markets to demonstrate accelerated growth, with the right enablers - which we think that payment gateway solutions will play an important role in."
Chan added, "We are confident that there will be continuous growth in eCommerce as a growing 'Services Sub-sector' in Malaysia in 2017."
Sign up for CIO Asia eNewsletters.