E-Commerce rules to tighten as sector surges past RM1.3 trillion in revenue - Armizan

THE nation is accelerating efforts to strengthen governance of its rapidly expanding e-commerce sector.

The government is preparing new legislation and establishing a special committee to examine the impact of foreign businesses on the domestic market as online commerce becomes an increasingly significant driver of economic growth.

Domestic Trade and Cost of Living (KPDN) Minister Datuk Armizan Mohd Ali said the e-commerce sector had evolved into one of the country's most strategic economic pillars, contributing substantially to national output and commercial activity.

“According to data from the Department of Statistics Malaysia (DOSM), the sector contributed RM248.2 billion, equivalent to 13.6 per cent of gross domestic product (GDP), in 2023.

“The sector has also recorded sustained growth in revenue, rising from RM1.1 trillion in 2021 to RM1.13 trillion in 2022 and RM1.18 trillion in 2023.

“Revenue expanded further to RM1.23 trillion in 2024 before reaching RM1.3 trillion in 2025,” Armizan said at the Dewan Rakyat today.

The Minister added Malaysia remained committed to its open-market economic model, including policies aimed at supporting digital economy growth and e-commerce expansion. However, market openness must not come at the expense of local businesses and consumer protection.

"As a trading nation, Malaysia practises an open market approach, including in strategies to drive digital economic growth and the e-commerce sector. However, the government will never sideline the interests of local stakeholders."

"Consumers must be protected, while local traders, particularly micro, small and medium enterprises (MSMEs), must be given a fair opportunity to compete."

To achieve that balance, the government is pursuing a comprehensive review of the legal framework governing e-commerce activities.

A review of all laws related to the sector began in April 2024, with the final report now completed and made available through the ministry’s website. The ministry has also completed a Cabinet memorandum outlining policy proposals for the drafting of new e-commerce legislation, which is expected to be tabled before the Cabinet during the first week of July.

Following Cabinet consideration, drafting of a new bill will commence, incorporating feedback from relevant ministries and legal scrutiny by the Attorney General's Chambers.

In parallel, the Cabinet has approved the formation of a Special Committee on the Impact of Foreign Businesses in Malaysia to assess concerns arising from increasing foreign commercial activity.

Among its key responsibilities will be examining issues such as the influx of foreign goods and services through e-commerce platforms, as well as the misuse of immigration passes for business and employment purposes, Armizan explained.

The committee will be chaired by the Ministry of Finance and comprise representatives from several ministries and agencies, including KPDN, the Ministry of Home Affairs, the Ministry of Investment, Trade and Industry, the Ministry of Housing and Local Government, the Ministry of Entrepreneur Development and Cooperatives, the Royal Malaysia Police and the Immigration Department.

The minister said the measures are intended to ensure that Malaysia's digital economy continues to expand in a manner that promotes fair competition, protects consumers and strengthens the long-term resilience of local businesses amid growing cross-border digital trade. - June 25, 2026