E-commerce in Malaysia: Perceived

Benefits and Barriers

Wong Wei Hang 219028
Methodology

Introduction
Though only a few years old, E-commerce has taken off at an
unprecedented speed despite much skepticism and some initial
hesitation.
E-commerce has not taken off in other parts of the globe although
some countries like Europe, Japan, and Australia are rapidly joining the
bandwagon.
In the Asian region, Malaysia ranks seventh in terms of the number of
Internet host after Singapore, Israel, Hong Kong, Korea, Taiwan, and
Japan.
International Data Corporation (IDC) estimates that the number of
Internet buyers in Malaysia will increase from 0.1 million to 0.87
million in the year 2003.
The total revenue from E-commerce activities in Malaysia was
estimated at RM187.3 million in 1999.

This study utilizes primary data collected through a postal market

survey.
The total number of registered companies was 1,064 and they
comprised manufacturers, traders, and service providers.
The contents of the questionnaire included the company profile, extent
of IT usage, particularly E-commerce adoption, attitudes towards the
benefits, and potential of as well as barriers to E-commerce.

Attitude towards the Utility of E-commerce

Firms Profile

About three-fourths of the sample firms were from manufacturing

sector, approximately equally distributed between consumer (38.9%)
and industrial (36.2%) products.
The nature of the export orientation of the firms was ascertained
through the percentage of company sales destined to the foreign
markets.
A high percentage of firms (63.8%) reported to have less than 10 units
of personal computers (PCs), about a fifth owned between 11-25 units
of PCs, and the rest of the sample (30%) owned more than 26 units of
PCs. These data suggest that PC ownership is still limited among the
firms studied.

Level of Participation in E-commerce

Participation in E-commerce would mean that a firm has the

following facilities and activities: e-mail, own servers, operating their
sales and purchases through websites, providing product catalogue
online, and making and receiving payments electronically.
Based on the status of Internet usage, the firms are further classified
in terms of their intensity of participation in E-commerce.
Four categories are identified: nonparticipating, low, moderate, and
active participation.

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The level of participation in E-commerce in Malaysia is still quite

low.
more than half of the 199 sample firms believed that E-commerce
offers a real competitive advantage; it will help the firm enjoy longterm success; and the competitors will have an edge if they are Ecommerce-enabled.
More than two-thirds of the firms feel that E-commerce will change
the nature of doing business within a short period, and, therefore,
most firms accepted to rely on E-commerce in the future.

Benefit to E-commerce Adoption

To increase revenue
To reduce operating cost
To increase customer service
To increase the efficiency in dealing with suppliers
To increase information flow
To enhance company brand and corporate image
To increase customer loyalty and retention
To improve business processes flow

Barriers to E-commerce Adoption

Not convinced of the financial and business benefits

Lack of knowledge and understanding on E-commerce
Uncertainties regarding rules and regulations
Computer technology not widely used in our business operation
Concern on security and privacy
Lack of skilled workers to handle/ maintain E-commerce system
Not enough customers/suppliers have internet access
Internal channel conflicts with current physical channels
High set up cost of E-commerce system
Keeping up with changing technology
Mindset shift in using E-commerce