Malaysia’s digital economy continues strong growth, driven by e-commerce and ICT

The Malaysia Digital Economy 2024 report, released by the Department of Statistics Malaysia (DOSM) today, underscores the continued growth and importance of the digital economy, driven by e-commerce and the Information and Communication Technologies sector.

The widespread adoption of ICT across businesses and households further strengthens Malaysia’s position in the global digital landscape, highlighting the country’s potential for continued innovation and growth in the digital economy.

Malaysia’s digital economy is defined as the economic and social activities that involve the production and utilisation of digital technology by individuals, businesses, and government.

This encompasses activities facilitated by digital tools and platforms, from e-commerce to digital public services.

According to DOSM, in the first nine months of the year, the e-commerce sector recorded a four per cent year-on-year growth, reaching RM918.2 billion. The second quarter saw the highest income at RM309.8 billion, although the third quarter experienced a slight decline of 0.6 per cent to RM307.9 billion.

“Despite this minor drop, e-commerce remains a vital pillar of Malaysia’s economic landscape,” said Chief Statistician Datuk Seri Mohd Uzir Mahidin.

“On Oct 15, 2024, DOSM published the ICT Satellite Account 2023, revealing that the ICT and e-commerce industries generated RM427.7 billion in 2023, up 3.9 per cent from RM411.6 billion in 2022.

“This increase boosted ICT and e-commerce’s contribution to the national digital economy from 22.9 per cent in 2022, to 23.5 per cent in 2023.”

This increase to 23.5 per cent was alluded to by Prime Minister Datuk Seri Anwar Ibrahim during the launch of the National Artificial Intelligence Office (NAIO) last week.

With industries such as rubber, tin ore, and palm oil adopting AI, Anwar had said Malaysia should aim to increase the digital economy’s contribution to the country’s gross domestic product to at least 25.5 per cent next year.

Other findings of the ‘Malaysia Digital Economy 2024 Report’ include:

• 78,236 establishments were involved in e-commerce transactions, generating an income of RM1,126.9 billion.

• The domestic e-commerce market outperformed the international market, contributing RM1,003.5 billion.

• Business-to-Business transactions recorded the highest contribution (RM786.5 billion), followed by Business-to-Consumer transactions (RM312.6 billion) and Business-to-Government (RM27.8 billion).

• Fixed broadband remained the preferred choice, with 92.3 per cent of businesses using it in 2022, while mobile broadband usage rose by 49.4 percentage points from 2015, reaching 77.9 per cent.

• A combination of both types of broadband was utilised by 72.9 per cent of businesses, highlighting the need for flexibility and adaptability in a rapidly changing digital environment.