ICT and e-Commerce in Numbers

Data on Penang and the nation’s information communication and technology (ICT) and e-commerce usage shows an increasing trend of ICT adoption. Putrajaya, Selangor, KL, Terengganu and Penang had the highest percentages of computer access by households in 2017 (Figure 1). Compared to 2015, these states (including the federal territories) recorded an incremental access to computers of between 3.7 and 20.4 percentage points, except Putrajaya, which recorded a drop of 2.5 percentage points. Meanwhile, the national average shows an increase of 6.5 percentage points in computer access among households, from 67.6% in 2015 to 74.1% in 2017.

In terms of mobile phone ownership, all states recorded percentages above 90% in 2017; Labuan and Putrajaya however noted a drop (Figure 2). Penang’s mobile phone ownership was at 94.8% in 2015, rising to 95.5% in 2017. In terms of smartphone penetration, Malaysia stood at 70% in the third quarter of 2017.1

Internet users increased from 71.1% in 2015 to 80.1% in 2017 (Figure 3). At the subnational level, all top five states (Putrajaya, Selangor, Labuan, KL and Penang) experienced an increase in internet users in 2017, compared to the figures in 2015, with Putrajaya being the territory that saw almost all of surveyed individuals using the internet. In 2017 about 86% of individuals used the internet in Penang – an increase of 10.6 percentage points from 75.7% in 2015.

Table 1 lists the top six types of activities of internet usage in Penang. The most popular activities are downloading images, movies, videos or music; and playing or downloading games – with as many as 90.6% of individuals using internet for this purpose. These are followed by social networking sites (80.5%); telephoning (79.2%); checking e-mails (78.9%); downloading software or applications (75.9%); and gathering information on goods and services (75.2%). Among these activities, the downloading of software and applications had the largest increase, from 48.1% in 2015 to 75.9% in 2017.

Penang continues to record higher broadband penetration for every 100 persons in the state. From Q4 2015 to Q4 2018, its broadband penetration rate per 100 persons increased from 86% to nearly 140%, respectively (Figure 4). In 2017 the national average broadband penetration rate per 100 persons stood at 117.3%. For the corresponding period, most states also showed stable increase in broadband penetration rates. Meanwhile, KL as the national capital recorded the highest broadband penetration rate, between 99.9% in Q4 2015 and 240.8% in Q4 2018.

Businesses

Data on businesses’ usage of computers and the internet shows a modest performance, with 87% and 80.4% of Penang’s businesses having ICT and using the internet, respectively, in 2015 (Table 2). These rates are correspondingly higher than the national rates of 73.5% for ICT usage and 61.7% for internet usage.

Despite the fact that there is a strong correlation between internet usage, and urban states and export-oriented industries,2 more initiatives should be undertaken to increase web presence among businesses. In Penang, only about 35% of businesses command web presence, although it surpasses the national average of 28.5%. 

Meanwhile, with the exception of ICT usage, small and medium enterprises (SMEs) in all states show lower usage of internet and web presence compared to the overall rates, as indicated in Table 3. In Penang, while 87.1% of SMEs use ICT, only a quarter of its SMEs use the web in their businesses (Table 3).

Table 4 shows Malaysia’s income and expenditure of e-Commerce, and the number of establishments involved in e-Commerce transactions. Malaysia’s total e-Commerce income was RM398mil while e-Commerce expenditure was RM195mil in 2015. Penang’s e-Commerce income was the fourth largest, after Selangor, Johor and KL, at RM44mil; while in terms of e-Commerce expenditure, Penang ranked third at RM20mil, after Selangor and Johor.

In 2018 the World Bank highlighted that it was necessary for Malaysia to create a dynamic ecosystem for the digital economy which embodies changes to its infrastructure, regulations, skills and public finance. In the rise of the digital economy and increasing global digitalisation, there is a greater need to achieve pervasive, fast and inexpensive internet connectivity for businesses and households – improvements only within the spheres of digital infrastructure and e-Commerce transactions will not be adequate. Nurturing talent that is future-driven, regulations that encourage the growth of internet penetration and development, and public finance catered to encouraging the growth of digitalisation will be required to ensure that Penang continues to partake in the growth of the digital transformation.

1Mobile cellular penetration reaches 131.8% (2018). The Star Online. Available at: https://www.thestar.com.my/business/business-news/2018/02/14/mobile-cellular-penetration-reaches-1318/ [Accessed 28 Mar. 2019].
2Record, R. J. L.; Larson, B. R.; Teh Sharifuddin, S. B.; Chong, Y. K. (2018). Malaysia's Digital Economy: A New Driver of Development. Washington, D.C.: World Bank Group.



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