Saturday April 11, 2009
Buying via Internet
By LEONG HUNG YEE and LEE KIAN SEONG
ONLINE shopping may be a novel trend in Malaysia but it is fast catching up among buyers, thanks to rising Internet penetration. Besides, online shopping beats jostling with the crowd and it’s easier to compare prices of comparable products online, which translates into better savings.
Owing to that and hoping to tap into this trend, many have also chosen the online path to set up businesses.
IDC Malaysia telecommunications research manager Lincoln Lee expects the Internet business-to-consumer market which includes online purchase of goods and services and bill payments to reach US$4.2bil (RM15.3bil) this year.
Still, in the current climate of uncertainty, he expects Malaysian consumers to generally be more prudent with their spending habits. In fact, online shopping may offer consumers a way to cut back on spending.
“Due to reduced spending power, consumers may turn to online medium for more affordable alternatives, discounts and convenient purchases compared to the traditional retail store shopping,” says Lee.
As such, he says online shopping is set to grow in a big way in Malaysia, judging from how it has grown in leaps and bounds for particular services.
According to IDC’s Skypad 2008 Study, Malaysia ranks with the highest in percentage of users among the nine countries surveyed in Asia Pacific who uses the Internet to purchase travel-related items. Up to 82% of Malaysian Internet users have purchased travel items online. Apart from that, shopping for books is also high on the list with 69% of them.
However, for businesses wanting to hop on the online bandwagon, Acmamall.com Sdn Bhd chief executive officer Christopher Quek says it may not be smooth sailing. “Online stores which wish to be successful must be able to ride out the initial stages. Malaysian customers still like to see, touch and feel and generally take a long time to trust online stores.
“We noticed that Malaysians will make a few small purchases before shopping for bigger amounts. They also ask many questions before finally making a purchase.”
Acmamall.com is an online shopping mall based in five countries which sells over 1.5 million books, beauty products, DVDs, music CDs, flowers, magazines, chocolates and healthcare products. It will soon tie up with Etiqa Insurance & Takaful Bhd for online car insurance renewal services which will be launched in due course.
In 2008, sales rose 35% from the previous year and that too, despite the softening economy. “We have expanded our products and markets significantly,” says Quek.
Many conventional brick and mortar retailers, having noticed more e-shopping sites appearing online, are also taking advantage of this trend by setting up their respective online shopping portals.
Fundsupermart.com, Singapore’s biggest online unit trust distributor, has made its way into the Malaysian market but local consumers are yet to warm up to the concept of online funds compared to those in developed economies.
eBay Inc director Allis Ghim, who oversees the Southeast Asian market from Singapore, expects more people to scour great deals or bargains online.
She points to a study conducted by ComScore in January this year which revealed that global Internet usage has reached over one billion unique visitors with 41.3% coming from the Asia Pacific region.
“Our total gross merchandise value (or total value of successfully closed listings on eBay’s trading platforms) was US$60bil in 2008 compared to over US$59bil in 2007,” she says.
eBay is the top online shopping destination in Malaysia which allows shoppers to buy goods from locals and foreign countries including the United States, UK and Germany.
“Our fixed price formats allow buyers to purchase items quickly and conveniently, while auction formats give buyers the thrill of a good bargain,” Ghim says, adding that popular goods bought online include clothes, accessories, books, toys, hobby-related items, consumer electronics and home stuff.
The top four categories in the fourth quarter last year were consumer electronics (US$6.9bil), computers (US$3.6bil), clothing & accessories (US$5bil) and home and garden (US$3.8bil).
eBay is uniquely positioned as the world’s leading online marketplace with a global presence in 39 markets and about 86.3 million active users worldwide. There are 113 million concurrent listings in over 50,000 categories.
Lelong.com operator Interbase Resources Sdn Bhd co-founder Wei Kwok Seing expects interest in second-hand items to increase moving forward. Wei points out that computers and accessories, fashion, custom jewellery, cellphones and accessories, games devices and home appliances are most popular in its website.
But if there is one impediment to online shopping, it would be concerns over its security or lack of it. Xceed Enterprise owner Martin Chong agrees saying that many consumers feel “insecure” making online transactions for this reason.
(Xceed operates batterytechsolutions.com which has been providing battery and power solutions-related products online since May 2006. It drew in sales of RM60,000 in March, which grew from RM35,000 in February, largely from the United States, Canada and Europe).
“Local consumers are more conservative and less confident about online security but it is certainly gaining popularity among the younger generation,” he says.
A major appeal for setting up online businesses is that it’s convenient, easy to do and cheaper (no rental fee, to state the obvious).
S-emart.com operator Swee Kai Keong says sellers can post their products online after registration without having to pay anything on the e-shopping site. His website sells over 14,000 items such as electrical, clothes, fashion accessories, toys and DVD with over 300 active sellers.
He promotes the website through advertisements, forum postings and email, and his consumers comprise mainly those between ages 15 and 35.
30% of Malaysian Internet users shop online
A RECENT survey conducted by The Nielsen Company on online shopping habits reveals that about 30% of Malaysian Internet users have conducted online purchases.
The survey was conducted on 500 Malaysian Internet users. Of the items purchased online, airline tickets and reservations top the list at 55%, followed by tour or holiday reservations at 41% and computer hardware at 22%.
Meanwhile, 21% of the surveyed Internet users purchased books online and 18% used the Internet to buy event tickets.
“The Internet is no longer a niche technology. It is mass media and an utterly integral part of modern life,” says Nielsen Malaysia’s director of online research Linda Lim.
“Almost no aspect of life remains untouched by online media. It isn’t surprising that consumers turn to the convenience of the internet when it comes to researching and buying products,” she says, adding that Internet has opened up a whole new world of shopping.
An avid e-shopper couldn’t agree more. She says: “I make my payments direct to the account and it only takes about a day or two for the goods to be delivered.
It’s easy and fast. Plus, you don’t have to drive around in circles looking for a parking space, walk around for hours battling human traffic, only to go home empty handed and exhausted.’’