E-commerce in the region is set to become increasingly data-driven, personalised and competitive, with consumers expecting faster delivery and seamless experiences. This means small and medium enterprises (SMEs) will need to make strategic shifts to stay competitive.
Industry players say the evolution of Malaysia’s e-commerce landscape has moved far beyond simply helping SMEs get online. The emphasis is now on enabling automation, data-driven decision-making and entry into new markets.
Across Southeast Asia, e-commerce is projected to reach US$359 billion in gross merchandise value (GMV) by 2030, and US$185 billion in 2025, according to the e-Conomy SEA 2025 report. In Malaysia, e-commerce GMV grew from US$13 billion in 2023 to US$20 billion (RM81.8 billion) in 2025, and is projected to reach US$29 billion by 2030.
Micro, small and medium enterprise (MSME) e-commerce adoption has reached 2.43 million as at 2024, according to the National E-commerce Strategic Roadmap — exceeding its original target of 1.15 million by 2025.
Platforms have played a major enabling role in accelerating digitalisation by providing ready-made digital storefronts, integrated marketing channels, embedded payments and logistics and automated returns management, allowing SMEs to tap into capabilities that would otherwise require significant investment.
Essentially, sellers gain access to analytics dashboards, campaign optimisation tools and performance insights that help them compete more effectively.
For example, marketplaces such as Lazada show SMEs where their customers come from — whether through search, recommendations or live streams — and how many of those views convert into purchases. The platform also provides category-level pricing and promotion benchmarks to help sellers avoid under- or over-pricing and to optimise subsidies during major campaigns.
“Through e-commerce, SMEs learn to use data analytics, artificial intelligence (AI)-driven marketing, digital payments and supply chain automation, which are all important elements of Industry 4.0. E-commerce also creates the foundation for growth and scalability. Once SMEs digitalise their sales, they begin integrating automation, logistics tracking and export fulfilment systems,” says Chin Chee Seong, national president of the SME Association of Malaysia.
“These digital capabilities make them more efficient and competitive in both local and international markets. In essence, e-commerce serves as the bridge to SME 4.0 by transforming traditional businesses into smart, data-driven enterprises that can grow faster, improve customer service and compete globally.”
Kaya Qin, CEO of Lazada Malaysia, adds that SME 4.0 is about small firms using advanced tools like cloud analytics, AI, automation and integrated payment or logistics stacks, and not just basic social media or marketplace presence.
The next step is to help SMEs use AI and data more effectively as AI is now shaping every part of the e-commerce funnel — from product discovery to delivery.
For instance, Lazada uses AI in several layers — from product safety screening that detects counterfeit or prohibited items before they reach shoppers, to catalogue-quality tools that suggest clearer images, titles and attributes to improve visibility.
Additionally, the use of AI agents, such as AI product listing agents and marketing agents, lowers the barriers for SMEs to create high-quality content and campaigns without needing in-house specialists, says Qin.
Lazada is also embedding AI capabilities into tools on the platform, so that a seller can clean up product images and generate consistent white-background visuals using simple AI image tools, auto-generate multilingual product descriptions that meet platform standards, and receive AI-generated recommendations.
“The impact on SMEs is direct. They get AI-assisted listing tools that automatically produce clearer product titles and descriptions, early demand signals that help plan stock and can run more targeted campaign mechanics using AI-assisted dashboards,” says Qin.
AI is also reshaping the buyer journey. Features such as Shopee’s estimated delivery time predictions help set clearer expectations and reduce uncertainty for buyers, which in turn strengthens trust in sellers, adds Ian Ho, vice-president of Shopee.
AI-powered review summaries condense thousands of comments into digestible insights that help buyers make quick, confident decisions.
Moving abroad
Malaysian SMEs are also increasingly using e-commerce marketplaces to jump over many traditional export barriers such as high marketing costs, lack of overseas partners and complex market entry processes.
“By listing on regional and global platforms, even a small brand can reach customers in multiple countries without setting up a physical presence, hiring foreign distributors or spending heavily on traditional trade fairs,” says SME Association’s Chin.
“Marketplaces provide ready-made tools for payment, logistics and customer service, which lowers the risk and cost of going cross-border.”
MSMEs should be able to tap into Asean’s 680 million consumers as a seamless single market — one where reduced cross-border costs and friction enable smaller enterprises to expand with far greater ease, said Deputy Minister of Domestic Trade and Cost of Living Datuk Fuziah Salleh at the Asean E-commerce Conference 2025.
However, businesses and consumers may be affected by cross-border complexities.
“Malaysia’s legislative review found overlapping mandates across customs, domestic trade agencies, consumer authorities, logistics regulators and digital platforms. Fragmented definitions, inconsistent documentation requirements and differing complaint mechanisms complicate enforcement, and these challenges are present across Asean,” said Fuziah.
Asean has already laid policy foundations through initiatives such as the Asean Agreement on E-Commerce, Asean Digital Masterplan, Asean Guidelines on Consumer Protection in E-Commerce and Asean Online Dispute Resolution Framework.
In addition, work on the Digital Economy Framework Agreement (DEFA) is progressing well, she said.
“DEFA will be Asean’s most ambitious digital integration instrument. It will strengthen interoperability, support trusted data flows and cultivate a more seamless regional digital market. Malaysia fully supports this effort because DEFA has the potential to double Asean’s digital economy to US$2 trillion by 2030.”
The Malaysian government has also completed a comprehensive review of the e-commerce legislative framework, and is now moving into the policy development and drafting phase, with plans to table the revised legislation in parliament by the first quarter of 2026.
The reforms include a modern definition of e-commerce, enhanced platform accountability, strengthened consumer rights, integrated multi-agency mechanisms, provisions for AI-enabled commerce and improved approaches to cross-border transactions.
The Shopee International Platform (SIP) allows eligible Malaysian sellers to expand their reach to buyers in Singapore, the Philippines and Thailand via Shopee’s localised platforms, without the need to set up overseas operations.
To date, over 2.1 million MSMEs across the region have used SIP to tap into new markets and build brand visibility beyond their home country, says Ho. SIP provides end-to-end support, including logistics, payment and customer service at no additional cost.
“This feature makes cross-border selling more accessible and less resource-intensive for SMEs, allowing them to focus on growing their business while Shopee handles the operational complexity,” he explains.
Building on this, the MY-SG Direct Programme further empowers Malaysian sellers to expand into the Singapore market by allowing them to sell directly to buyers on Shopee Singapore. Through this initiative, sellers maintain full control of their Shopee Singapore shop while benefiting from local end-to-end logistics and payment solutions.
“The programme also offers strong platform support, including extra traffic exposure and 0% base commission for the first three months, along with dedicated incubation teams in Malaysia to guide sellers through onboarding and growth in the Singapore market,” he adds.
Source: https://theedgemalaysia.com/node/786992