KUALA LUMPUR (Dec 15): Malaysia ranks first among the Regional Comprehensive Economic Partnership (RCEP) member states in terms of growth rate for the e-commerce market, having developed rapidly over recent years.

In a report titled “Technology-empowered Digital Trade in Asia Pacific” released on Tuesday (Dec 14), Deloitte said that in 2021, the total size of Malaysia’s e-commerce market stood at US$6.297 billion (RM26.65 billion), representing 61.4% of the e-commerce market size in China and ranking among developing markets after Indonesia and Thailand.

The report said payments and sales are the two trade functions with the highest level of digitalisation.

It said Malaysia also has the highest penetration rate for sales digitalisation for cross-border e-commerce, standing at 65.7%.

However, it said overall cross-border e-commerce in the country has been limited by factors such as cross-border logistics infrastructure and technical operations, impacting its development significantly.

Deloitte said that at present, cross-border consumption only accounts for 42% of the market size of the internet economy in Malaysia, which is much lower compared to mature markets among RCEP members.

Commenting on the region, Deloitte said that digital trade is expected to further accelerate in the region, on the back of vibrant cross-border e-commerce activities, rapid consumer adoption of a digital lifestyle, further development of digital infrastructure and strengthened regional cooperation led by RCEP.

Deloitte China vice chair and Technology, Media & Telecommunications industry leader Taylor Lam said the COVID-19, the development of digital technologies and enhanced regional cooperation are accelerating the formation of digital trade in the Asia Pacific region.

"Digital trade is presented with brand-new development opportunities.

“In addition, the RCEP will promote regional cooperation, and facilitate regional digital trade," he said.

Deloitte Global lead client service partner Gary Wu said digital technologies enable global sellers to participate in global trade without any entry barriers.

“The continuous improvement of digital infrastructure will effectively resolve the two major constraints affecting cross-border trade: logistics and payments. Blockchain technology is also creating a new space of imagination for digital trade,” he said.