PETALING JAYA: Malaysia’s internet usage spiked this year, as over various movement control order (MCO) periods, users turned to the internet for solutions to their sudden challenges.
A significant number tried new digital services (36% of all digital service consumers were new), with 92% of these new consumers intending to continue their behaviour post-pandemic, according the e-Conomy SEA 2020 report by Google, Temasek and Bain & Company.
E-commerce has driven significant growth in Malaysia, at 87%. Overall, 2020 gross merchandise value (GMV) is expected to reach a total value of US$11.4 billion (RM46.8 billion) in 2020, having grown at 6% year on year, which largely offset the decline in online travel, which fell from US$4.7 billion (RM19.35 billion) in 2019 to US$1.9 billion (RM7.82 billion).
In 2025 the overall internet economy is projected to reach US$30 billion (RM123.52 billion) in value as it reaccelerates to a compound annual growth rate of about 23%.
The report found Southeast Asians spent an hour more per day during lockdowns, while Malaysian’s spent 3.7 hours online (for personal use) pre-Covid-19, which spiked to 4.8 hours at the height of lockdowns, and now rests at 4.2 hours per day.
Given that eight out of 10 users viewed technology as very helpful during the pandemic, it has become an indispensable part of people’s daily lives.
Google found that, during the pandemic, HealthTech and EdTech have played a critical role with impressive adoption rates to match.
Even so, it noted that these sectors remain nascent and challenges need to be addressed before they can be commercialised at a larger scale.
“Nonetheless, the boost in adoption, compounded with fast growing funding, is likely to propel innovation in this space over the coming years,” it said.
The report related that since Malaysia’s internet economy peaked in 2018, funding for unicorns in mature sectors (e-commerce, transport & food, travel, and media) has slowed.
It found that platforms are now refocusing on their core business to prioritise a path to profitability, and are addressing consumers’ broad range of needs through partnerships.
“The emerging digital financial services (DFS) battleground is one of the few spaces where the super-services do collide, and though it’s too early to tell the outcome, we expect that continued funding and a strong cash-generating core business to be key.”
On the flip side, Google noted that deal activity across the region continued to grow unabated in first-half 2020.
It observed that investors are cautiously optimistic and are doing fewer deals at more attractive valuations, in hope for higher returns in the long run. This is a departure from the goal of “blitzscaling” of the years prior as investors are now looking for sustainable, profitable growth.
Moving forward, the report opined that this year’s seismic consumer and ecosystem shifts have advanced the internet sector in unimaginable ways, putting it in a stronger position than ever.
“In our 2019 report, we identified six key barriers to growth – internet access, funding, consumer trust, payments, logistics and talent – and this year has seen significant progress on most (payments and consumer trust, especially),” it said.
“Talent, however, remains a key blocker that all parties will need to keep working on to ensure the momentum gained this year is sustained.”
E-commerce growth has largely offset the decline in online travel. – REUTERSPIX