IDC Reports 70% Growth in Malaysia eCommerce Spending in 2006

24 January, 2007

Kuala Lumpur, January 24, 2007 – eCommerce spending in Malaysia is expected to present an annual growth of 70% in 2006, according to IDC's latest study, Malaysia Internet and eCommerce 2006–2010 Forecast: Tracking the Development. In IDC's recently published Internet Commerce Market Model v10.2, Malaysia's Internet market is expected to continue to grow robustly throughout IDC's forecast period of 2006 - 2010, represented by a compounded annual growth rate of over 28%

The ecommerce market in Malaysia continues to grow healthily on the back of a healthy economy. The Malaysia economy is expected to grow by 5.4% in 2006, and interest rates are expected to continue rising in a non-aggressive manner as Bank Negara Malaysia (the nation's central bank) continues to forge sustainable economic growth in light of the forecast rise in the consumer price index (CPI) of 2.4% in 2006.

"The outlook for ecommerce in Malaysia certainly looks bright. However, global eCommerce spending in 2005 was US$3.8 trillion, and has reached US$5.0 trillion in 2006. Meanwhile, in Asia/Pacific, ecommerce spending will reach approximately US$645 billion in 2006. " says Lincoln Lee, Senior Analyst, Telecommunication Research, IDC Malaysia. "When taken into this context, Malaysia's ecommerce industry still has much room for improvement. Among the key issues that needs to be address to ensure this sustainable growth in the market includes development of payment gateways, easing of monetary regulations and proper e-Government delivery".

Malaysia's B2C ecommerce spending in 2005 was approximately US$1.9 billion, and has grown by 43% in 2006 to reach US$2.8 billion. B2C spending is expected to increase healthily at 24% 2005–2010 CAGR. Meanwhile, B2B ecommerce spending in Malaysia in 2006 will amount to US$13.6 billion, representing a growth of 77%. B2B spending will increase at 29% CAGR over the same period. Meanwhile the country has seen the number of unique Internet buyers in the country growing. In 2005, there were 4.7 million unique buyers, and in 2006, Internet users will reach to just over 6 million. In terms of Internet Access Devices, mobile Internet access devices market has exhibited astounding growth in 2006, with a growth rate of 49%, reaching a total of 3.9 million devices. This growth is expected to peak in 2007, with a growth rate of 61%, allowing mobile Internet access devices to account for nearly 45% of total Internet access devices

The Malaysia ecommerce market has exhibited a healthy growth rate of 70% in 2006 in comparison with that in 2005. However, in order to ensure sustainable growth, there is still plenty of work to be done to develop this industry into a mature market," added Lee.

For more information, please contact Hazmi Yusof at +603-2169-7522 or hyusof@idc.com; or Stephen Chong at +603-2169-7521 or ckchong@idc.com

Contact

Chee-Kian Chong
Events & Marketing Executive
Tel: +603-2169-7521
Fax: +603-2163-5098
Email:ckchong@idc.com