Malaysia’s growing appetite for Internet usage and eCommerce appears to have accelerated with the onset of the coronavirus pandemic, so much so that the country’s mobile phones now account for more web traffic than its PCs.
Smartphone penetration amongst Malaysian adults is high, with the combination of low-cost handsets and improving network bandwidth driving up mobile Internet access. GlobalWebIndex statistics compiled in the third quarter of 2020 estimate that 99.2% of Internet users aged between 16 and 64 have mobile phones, for example. Almost all of those users (96.3%) access the web via their smartphones specifically, spending an average of four hours and 36 minutes on average in the process.
According to Statcounter, the share of web traffic routed to Malaysians’ mobile phones exceeded the equivalent proportion spent browsing on laptops and desktop PCs for the first time in 2020. Web pages served to web browsers on mobile phones jumped 13% between December 2019 and December 2020 to reach almost 58% of the total but declined 16% to 38.7% for laptop and desktop PCs. Time spent browsing on tablet devices was up 37% during the year, though it still accounts for a fraction of the overall total (3.8%).
App Annie estimates that the total number of cumulative hours that Malaysians spent using Android mobile phones in 2020 surged 40% in 2019 to reach over 26bn. Android smartphones continue to dominate in Malaysia, generating 78% of mobile web page requests in 2020. But that figure was down almost 6% in December 2020, while Apple iOS devices grew their share 24% during the year. Statcounter too estimated that Android’s default web browser – Google Chrome – accounted for 75% of all web traffic in Malaysia in December 2020, compared to 15% for Apple Safari.
The decline in PC Internet use occurred despite a significant increase in the average speed of fixed internet connections in Malaysia – up 20% year on year to 93.7Mbit/s, according to Ookla tests conducted in January 2021. In contrast, the average speed of mobile Internet connections is just 25.6Mbit/s, having increased by only 7.6% during the year. GSMA Intelligence estimates that almost 94% of connections are either 3G, 4G, or 5G enabled, with over two-thirds (68%) of accounts as pre-paid rather than post-paid (32%).
Mobile app consumption and e-commerce boomed in 2020
The long periods that most people in Malaysia now spend accessing the Internet via their smartphones spans a mix of activity, including shopping, entertainment, gaming and banking. App Annie estimates that Malaysians downloaded over 1.2bn apps from Google Play and Apple App stores in 2020, spending US$510m in the process.
Shopping apps on mobile phones and tablets are used by 88% of Malaysian adults aged between 16 and 64 every month. SEA’s Shopee and Alibaba Group’s Lazada made the top ten mobile apps ranked by monthly active users in 2020 to App Annie records. GWI also estimates that 68% of 16-64yr olds purchased a product online using their mobile phone in the third quarter of 2020. That love of eCommerce is highest among 35-44-year-olds (89% of which purchased a product online in Q320), marginally ahead of 25-34-year-olds that did the same thing (84%). However, significant numbers of younger Malaysians under 24 (80%) and those aged over 45 (79%) made online purchases.
Statista’s Market Outlook for E-Commerce calculates that Malaysia saw a considerable jump in the total value of consumer goods brought online in 2020, up 37% on 2019 to be worth US$4.5bn to represent an average annual spend per user of US$341. Including mobile payments at the in-store point of sale terminals made via smartphone apps, that yearly average spends per user almost triples to US$940, with a total combined spend up 22% year on year to US$12.3bn.
Video streaming and gaming
Entertainment and video apps are equally popular with Malaysians, used by 90% of Internet users aged between 16 and 64 at least once a month, according to GWI. The company also calculates that 62% paid for digital content in the third quarter of 2020, including TV/video streaming, music downloads and electronic publishing formats. Statistics from App Annie appear to concur, suggesting that on-demand movie and TV show streaming apps like Netflix and Viu account for a significant proportion of Malaysia’s eCommerce activity, ranked 4th and 8th respectively in terms of consumer spending by App Annie.
Just over 81% of Internet users aged between 16 and 64 also played a video game on their smartphone in the third quarter of 2020, far more than the number playing on either laptop or desktop PCs (51%), consoles or tablets (both 19%) and dedicated handheld gaming devices (8%). GWI also calculated that 58% use a game app at least once a month.
The two most popular titles ranked by monthly active users, downloads, and consumer spending is multiplayer online battle arena games Mobile Legends: Bang Bang and PUBG Mobile. Statista’s Market Outlook for eCommerce, Travel, Mobility and Digital Media estimates that Malaysians spent a total of US$355m on all forms of video games in 2020, 22% more than they did in 2019.
Smartphone banking on the rise
Not only are Malaysians spending more money purchasing goods and services using their smartphones, but they are also increasingly turning to apps to facilitate those payments. Almost 56% of Malaysian Internet users aged between 16 and 64 use banking and financial services apps according to GWI.
World Bank global financial inclusion data estimates that most (85%) of Malaysian adults aged 15 and over have an account with a financial institution. Still, credit card ownership remains relatively low (21%) compared to other countries. However, 11% do have some form of mobile money account which store funds in an electronic wallet (eWallet) linked directly to a phone number and 29% use an open, vendor-led mobile payment service like Apple Pay or Samsung Pay.
That growing appetite for smartphone-based mobile payments amongst Malaysian consumers is likely to serve both online and in-store merchants well in 2021 and beyond, particularly as shoppers continue to switch from using cash and plastic cards to contactless payments in the aftermath of the pandemic. But retailers must still implement the necessary POS infrastructure and back-end billing integration to reach as many customers as possible and avoid being overtaken by more nimble rivals.