The Changing Retail Landscape In Malaysia: Part 02 Domestic Commerce & Concerns
By Jonathan Cheah
07 July 2012 - Business is going mobile. It is doing so fast, and it is evolving quickly as it goes along. The mobile retail environment is a quickly changing landscape, and retailers who are quick to latch onto the latest innovations and trends in doing business with an Internet-savvy generation will stand to gain more than their slower to respond competitors.
Please read the first part for the necessary background for this article
What are Malaysians buying online?
Airline tickets are still number one in Malaysia, with a 14% share of the total spend amounting to RM 268 million (S$ 107 million). We know most of this is because of the rise of AirAsia, and subsequently the purchase of airline tickets online has become very commonplace in Malaysia.
Second is General Insurance with 9% of the total market amounting to RM 184 million (S$ 74 million). I doubt many people actually buy personal insurance online, but I do know that vehicle insurance is most definitely online. All the agents are updating directly and you can then get your road tax disc from the post office or from JPJ almost immediately. (Malaysian laws require insurance coverage before the road tax can be renewed).
The statistics above are for the year of 2011, and 70% of all that spending was on local websites. Surprised? Bet you are. Most people think that only international websites are good enough to buy from. Apparently, the locals have gained some trust from the people who use the Internet.
[Malaysia: Online Spending Categories. Graphics courtesy of Paypal]
The Nielsen Digital Consumer Study 2011 concludes that price and convenience were the main factors for the increase in domestic online purchases.
Key concerns that must be addressed
60% of respondents in that study said that security is a key concern. Malaysians are generally quite wise to confidence tricksters, having been exposed to a multitude of scams in the real world over the last few decades. We still have our share of gullible and uninformed people, but I’d like to think they are the minority in a digitally-savvy country.
Any online payment provider must be able to provide a very high degree of security. Paypal prides itself on keeping its users’ financial details private, and both buyer and seller deal with each other without revealing financial details to each other.
An additional concern is where buyers are sent goods that are not as described or where products are not delivered after purchase. Paypal offers buyer protection, and eBay is one example of a website where this protection helps a great deal in instilling buyer confidence in whatever they buy.
Paypal will itself arbitrate any disputes on a case by case basis and may decide to refund the money if the seller fails to respond satisfactorily to a buyer complaint. Apparently, it works the other way as well and the merchant is also protected against scams and fraudulent transactions.
[eBay buyer protection. eBay owns Paypal, which guarantees purchases made on eBay.]
Next: Part 03 Paypal's Vision for a digital wallet
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