Malaysia to Accelerate the Implementation of Digital Economy
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Malaysia to Accelerate the Implementation of Digital Economy

06 Jul 2021 | Malaysia

The Malaysian government plans to intervene in the economy through six digitization-specific areas, namely to accelerate businesses in adopting e-commerce, e-procurement, lift non-tariff barriers through e-fulfillment for cross-border activities, and protect consumers through e-payment.

The government's blueprint outlines 22 strategies, 48 national initiatives, and 28 sectoral initiatives spread over ten years and implemented through three phases. The first phase would involve laying the foundation for a digital economy and accelerating the adoption of digitization.

The digital economy in Malaysia would allow economic activities to leverage information and technology as the essential element in production and business.

The prevalence of the COVID-19 pandemic has shifted consumer's perspectives to online shopping as an attempt to contain the spread of the virus, leading retailers to provide online services to respond to the ever-growing demand.

To add matters in hand, over 80 percent of Malaysia's population are active internet users with heavy mobile phone penetration; the number is equivalent to about 25.84 million people actively trading online. Digital wave affects global communities on a scale that permanently changes consumer behavior regardless of the COVID-19 pandemic.

Today, artificial intelligence (AI), the Internet of Things (IoT), and big data analytics are changing economies worldwide, including Malaysia.

Sizable Digital Market in the Country

Digital Market Malaysia

The e-commerce market in the country has tripled in size since 2015, exceeding over USD 3 billion in 2019, and assuming its steady growth, it would reach USD 11 billion in 2025.

The growth trajectory was strengthened by severe effects from the global pandemic and the ensuing restriction protocols that had disrupted the traditional way of doing business.

In addition, the Malaysian government plans to proper over 875,000 micro, small, and medium enterprises (MSMEs) to shift to e-commerce in the next five years.

While e-commerce provides convenience for both sellers and consumers, the platform also poses unprecedented risks of cybercrimes. Fraudulent transactions and pirated product trades in recent months have increased at alarming rates.

Rigorous Investments for Digitization

Alongside opportunities for Malaysian private sectors to optimize digitization, the digital economy expects to take a share of 22.6 percent of the country's GDP and provide approximately 500,000 jobs by 2025.

To support the realization of the digital economy's target, the government plans to invest over RMI 1.65 billion in telecommunication companies to develop 5G rollout and cloud services as the building blocks of the digital future.

The nationwide project "JENDELA," or Jalinan Digital Negara, hopes to touch on three significant segments of the country: accommodate seamless education and productivity, support and diversify businesses and government services, and thoroughly connect communities in the country, eventually improving Malaysia's digital infrastructure transition to 5G tech and high-quality and accessible broadband services.

Moreover, the government also plans to optimize its "Cloud First" strategy that would efficiently collect and manage data to enhance government services, allowing digital infrastructure to become the critical engine growth of the economy.

Carrying out the pathway towards a digital future can only be realized with both efforts from the government and the private sectors.

Malaysia currently welcomes digital companies to collaborate with the public sectors to amplify the efforts of digitizing and push the economy's growth towards reaching its goals.


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