Online Shopping in Numbers

By Yap Jo-Yee

November 2021 STATISTICS
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MALAYSIA’S INTEREST IN online shopping waxed and waned over the period of the pandemic. Combining this with household income data from the Department of Statistics Malaysia, patterns in e-commerce preferences across the Malaysian states have been studied and are presented below.

Data obtained from Google measure the amount of searches for a particular term or topic. In this case, the terms of interest are some popular e-commerce platforms: Carousell, Lazada, Mudah.my, Shopee and ZALORA. Search volume is indexed at 100, to indicate when interest in the term is at its peak for a particular time period (December 2019 - October 2021). This index also allows for comparison of interest between different terms.

Before Covid, search interest for Shopee had already been greater than all other online shopping platforms. But after the first lockdown, this gap widened considerably. To illustrate, search interest for Mudah.my took a dip, while Shopee and Lazada experienced sharp spikes among shoppers looking to stock up on household essentials and groceries.

On November 11, 2020 and June 1, 2021 (the start dates for the CMCO and MCO 3.0 respectively), search interest for Shopee shot up again and far exceeded the initial spike right after MCO 1.0 was announced. Lazada also saw similar changes in search traffic when CMCO was implemented, but interest for it quickly waned. Likewise, it was oddly subdued when MCO 3.0 was announced.

Shopee takes the lead in every state, followed by Mudah.my and Lazada, with only a slight difference in popularity for each of the platforms. Sarawak, in particular, has a greater than average search interest for Shopee. Of the total searches for the five online platforms, 58% of them were for Shopee (Figure 2). The average is only 52%. Interest for Mudah.my is highest in Sabah (32%), while Lazada is most popular in Selangor and Penang (25%).

Overall, Shopee dominates search interest but a closer look at Figure 2 suggests that Lazada, its closest competitor, has a higher search interest in states with higher per capita incomes.

A Lazada-Shopee Interest Index is created to verify this claim. For each state, the percentage share of searches for the term Lazada on Google is divided by the percentage share of searches for Shopee to obtain a ratio. This gives an idea of Lazada’s popularity against Shopee’s, in one single number. The higher the index, the higher the search interest for Lazada.

When charted against median household income for the year 2020, this index confirms that the popularity of Lazada and Shopee is indeed predicted by income. KL and Selangor, whose median household incomes are at the top end, above RM7,000 per month, score highly on the index. In contrast, states with lower household incomes like Kelantan and Kedah show lower index scores.

Shopee’s free shipping strategy may be a factor for this. Sensitivity to prices changes with income, i.e. the lower the income, the greater the sensitivity to prices. The difference between free shipping and a few Ringgit might be enough to drive price-sensitive shoppers to Shopee to look for alternatives, which explains its popularity among the lower income states.

Affordability is presumably a great motivator during these financially trying times; household income in Malaysia fell by 11.3% in 2020. This same reason may also explain the surge of interest in starting online businesses.

Starting an online business to mitigate income losses during these intermittent lockdowns is unsurprising. Figure 4 shows that interest in joining Shopee and / or Lazada as a seller is stronger than ever, having quadrupled since December 2019.

These trends show that online shopping has established itself firmly in the Malaysian market. More interestingly, differences in interest for the e-commerce platforms are fuelled partly by income changes during the pandemic. Not all platforms have benefitted equally. Post-lockdown, how and if brick-and-mortar shops regain their share of consumer expenditure is worth watching, as is whether online shopping retains its foothold in our lives.

PM
Yap Jo-Yee

is a research analyst at Penang Institute whose interests range from development issues to behavioural economics. Her latest goal is to use ggplot2 without Google’s help.