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Beginner’s Guide on Starting an E-commerce Business in Malaysia

Starting an E-commerce Business in MalaysiaIn this modern age of interconnectivity, businesses thrive by selling their services or products online. E-commerce brings more opportunities for the seller and makes the shopping experience more user friendly for buyers. With the ease of access, it is extremely convenient and easy to shop. Your items are delivered right in front of your doorstep.

With that in mind, more businesses in retail stores have opted to swing their business to e-commerce. When it comes to e-commerce business, entrepreneurs have realised that their services or products can be shipped not only in the country but overseas as well. In Malaysia, local businesses have continued to stay afloat by doing retail in physical stores and e-commerce as well.

Earlier this year, the Minister for Domestic Trade and Consumer Affairs said that Malaysia’s growth in the e-commerce industry is gaining momentum and is expected to expand further under the National eCommerce Strategic Roadmap’s (NeSR) initiative (more on this below). With the NeSR 2.0 programme, the Malaysian government aims to help almost 900 000 micro, small, to medium entrepreneurs to go online by 2025.

Do you have a great idea for an e-commerce business but don’t know how to start or where to begin? We got your back. In this beginner’s guide, we will be walking you through the essentials of starting an e-commerce business in Malaysia. Find out what the business registration process entails, licenses required and where to find reliable assistance. Check out our guide to company registration in Malaysia for more beginner’s guides!


What is an E-commerce Business?

E-commerce, or electronic commerce, refers to business conducted over computer networks. In other words, e-commerce is buying and selling through the internet. Nearly anything and everything you can think of is available on e-commerce. Examples of technologies in e-commerce are Internet marketing, electronics funds transfer, automated data collection systems and many more. Generally, in e-commerce, there is online retailing, electronic markets, and online auctions.

Due to the pandemic, many physical stores could not operate. Nevertheless, travel restrictions have become a silver lining for online sellers. The pandemic has catapulted online shopping and the subsequent sales in e-commerce. With no signs of slowing down, the growth projection for e-commerce worldwide is predicted to exceed the initial future projections.


Is Starting an E-commerce Business in Malaysia a Good Idea?

Starting an e-commerce business in Malaysia is an excellent choice as the government heavily prioritises the digital economy. The National eCommerce Council (NeCC), made of various ministries and agencies, is responsible for overseeing and implementing the roadmap for doubling e-commerce. Ministries such as the Ministry of Entrepreneur Development and Cooperative (MED) and the Ministry of Finance (MOF) work together to increase the awareness of e-commerce to sellers, especially the MSMEs.

To drive the growth of e-commerce in the country, the NeSR 2.0 programme introduces six thrust areas of intervention, and they are:

  1. Accelerate the adoption of e-commerce.
  2. Increase the adoption of eProcurement.
  3. Lift non-tariff barriers.
  4. Restructure existing incentives for the economy and e-commerce.
  5. Investment allocation for selected players.
  6. National brand promotion.

Another highly beneficial initiative would be the Digital Free Trade Zone, or DFTZ. The DFTZ is led by the Malaysia Digital Economy Corporation (MDEC). It is a national initiative aiming to maximise cross-border trade via digitalisation. Through the initiative, MDEC aims to help businesses in the country become more versed in e-commerce and reach for better opportunities in the international market. More and more countries, including Malaysia, are beginning to integrate digital platforms such as services into their own digital economy. In time, cross-border trade will be much accessible for everyone, starting with the ASEAN audience.

The DTFZ offers numerous advantages for e-commerce entrepreneurs, such as the following:

  • Making the global market more accessible for SMEs and their business.
  • Easing the cargo clearance process.
  • Providing holistic support for business in cross-border trades.
  • Giving eFulfilment services, such as warehousing and packaging services for businesses.

Aside from that, there is plenty of training, workshops, trade shows and exhibitions, digital entrepreneurship classes available for the Malaysian e-commerce community.


Getting on With the Business Registration Process

In Malaysia, you can choose between three types of business entities, namely, business, company and Limited Liability Partnership (LLP). Each of them come with their own set of pros and cons. They also differ in areas of ownership, taxation, legality, liability and business termination.

Keep in mind that every e-commerce business is different. Meaning to say, what may suit other entrepreneurs and their businesses, may not be the most suitable choice for you. Choosing a business entity is a significant decision that holds a substantial impact on your business. Having guidance from company incorporation services in Malaysia can be a great deal of help, all the more if you are a first-timer.


Licenses You’ll Be Needing

First things first, register your business with Suruhanjaya Syarikat Malaysia (SSM) or the Companies Commission of Malaysia (CCM). Aside from getting your business legally recognised, you will also be eligible for incentives from the government. Plus, registering your business with SSM will allow your clients access and enable them to verify your business information. Thus, creating more trust and confidence in your business.

Depending on the nature of your business, you will have to apply for either a general license, an industry or sector-specific license, or an activity-specific license. To search for business licenses, you can log on to the MalaysiaBiz Portal. The Ministry Of Entrepreneur Development And Cooperatives (MEDAC) regulates the portal.

Needless to say, starting an e-commerce business requires you to be proficient in IT. Given how your entire business takes place over the net, you will be spending lots of time on your computer taking orders, setting up customer service, designing and maintaining a website, etc. With the assistance of a corporate service provider, you can skip over the technicalities and focus on other matters.


Start Your Business Right

A trillion-dollar industry, the e-commerce scene remains promising. E-commerce breaks the conventional boundaries of doing business. With online stores open 24/7, all year round and a global client base, e-commerce is undoubtedly the future of business. If you have a device and a stable internet connection, you can run your business from anywhere, anytime. That said, starting your business right is of crucial importance. So, why not engage with experts from the industry?

3E Accounting is your one-stop solution for all things business-related. We offer an array of services and packages tailored to your corporate needs. Whether you need help in starting a business, growing it or venturing overseas, we have your back. Our team is comprised of professionals ranging from legal, accounting, corporate, taxation, etc., and we are globally recognised for what we do. Contact 3E Accounting today for a free consultation and find out how we can help you!


Starting an E-commerce Business in Malaysia