KUALA LUMPUR: Malaysia, all set to ride the digital economy wave, can expect to see the contribution of e-commerce to the economy increase within three years, grossing RM211 billion.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the annual growth rate target of 10.8 per cent this year, which was expected to double to 20.8 per cent in 2020, was achievable as there were more than 40 initiatives to spur growth.
“Additional government interventions will drive higher contributions,” he told a media briefing, here, yesterday.
Malaysia’s e-commerce contribution to the gross domestic product (GDP) remains low at 5.8 per cent compared with China (21 per cent of GDP) and the United States (35 per cent of GDP). Its business-to-consumer e-commerce market is expected to grow to US$3.4 billion (RM15.13 billion) by 2020.
The National E-commerce Strategic Roadmap, which was launched by Prime Minister Datuk Seri Najib Razak last month, begins next year with 11 programmes to be undertaken by the relevant agencies.
Mustapa said some of the growth areas were banking, e-government, data analytics and Internet of Things applications.
He also said various trade-related disciplines of e-commerce were being addressed at the World Trade Organisation, Asean Economic Community Blueprint 2025 and in the free-trade agreements (FTAs) such as Malaysia-Australia FTA, Asean-Australia-New Zealand FTA, Regional Comprehensive Economic Partnership and the Trans Pacific Partnership agreement.
Mustapa said one of the concerns being studied by the government was the loss of e-commerce revenue. The National E-commerce Council will form a technical committee to discuss solutions on the taxation system for e-commerce activities.
Meanwhile, Malaysia Digital Economy Corporation chief executive officer Datuk Yasmin Mahmood said various initiatives were being implemented by leveraging the strengths of ministries and agencies as well as private sector players.
“The roadmap will help pinpoint real challenges and deliver tangible solutions to double the growth rate.”
She lauded the appointment of Alibaba Group founder Jack Ma as digital economy adviser and looked forward to his input in March.
Alibaba is the largest and most profitable e-commerce player in China.
AmInvestment Bank said following the prime minister’s successful visit to China, investors should invest in the country’s e-commerce secular trend, with Alibaba and Ctrip.com being the best proxies to this growth story.
The research house expects local online shopping sales to grow at a compound annual growth rate of 24 per cent from this year to 2021.
“However, there are no listed e-commerce players with significant exposure to the Malaysia e-commerce market,” it noted, referring to China’s online retail sales which grew at a staggering 47 per cent per year from 2010 to last year.