State of the Internet: Statistics Focus on Asia & Malaysia

Posted on 19. Nov, 2009 by Franz in Marketing, Web Metrics

Topical Menu:

• Summary & Key Findings on the comScore webinar (Statistics, statistics!)

—– Newly added! —–

• comScore’s soIAP Presentation in Singapore (slides)
• Asia’s Internet Population & Volume 2009
• Internet Usage in Asia, 2009
• Top 15 Web Properties (Group) Used by Asia Pacific Internet Users
• Global Sites’ Performance in Asia Pacific
• Language: User preferences of language in Asia Pacific
• Local Website Dominance in Asia Pacific
• Famous Content Categories in Asia Pacific
• Entertainment Reach & Usage in Asia
• Top Entertainment Sites in Asia Pacific
• YouTube drives 45% online Malaysians in Top 5 biggest Video Consumers
• Social Networking Reach & Change in Asia
• Top Social Networks in Asia
• Top Countries for News/Information Sites Reach & Visits in Asia
• Search Share in Asia Pacific
• Online Retail Reach in Asia

—– End of Updated Material —–

• eCommerce Performance in Malaysia
• List of biggest online spenders in Asia (by Country)
• Malaysia’s most dominant retail industry on the Web (by catergory)
• Malaysia’s Internet Population by Age
• Google’s Share of Search in Asia
• Lower Google’s search share means more dominant local Internet properties?
• Top Malaysia (Most Visited) Sites in Malaysia, February 2009
• Is language a barrier for US-based sites to penetrate the Asian market?
• MSC Malaysia’s Duties (and what can they do now)
• Why is the Malaysian market this way – So bad in many ways?

Before I start, I’d like to emphasize that I’m placing very, very big focus and emphasis on MALAYSIA. Please also be reminded that I’ll be placing a link down on this post when I’m able to get the document. If you’d like more info, coverage and insights on the search market in Malaysia, please contact Elioe.com.

Attending the webinar by comScore titled “State of the Internet with a focus on Asia Pacific” gave me a bit of insight to the market, specifically on what’s going on in and around our neighbouring countries; plus what’s with us in Malaysia ourselves.

Right from the very beginning, I’ve explained to many marketers, businessmen and marketing managers that “Malaysia is still an immature market in so many ways – And you can’t just blame the Rakyat or the Government alone.”

–Update: 20th Nov, 2009–

comScore’s soiAP Presentation

Please visit my Scribd page to find the whole presentation.

Highlights from the slideshow:

1. Global growth rate is 4% worldwide last year, as worldwide Internet users have now reached the 1 billion mark. (1.162 billion Internet users worldwide)
2. Growth is FLAT in North America, European’s increasing Internet users are driven by Russia.
3. Latin America and Middle East / Africa showed 28% and 79% increase in Internet users respectively (2008 – 2009) but Asia still hold the largest Internet users base.
4. Asia Pacific records a stunning 22% increase in Internet users since 2008, volume has reached 477.2 million.
5. Users in Hong Kong (25.6 hours/visitor), Singapore (21.4 hours) and Vietnam (19.9 hours) spends the most time online.

Asia’s Internet Population & Volume 2009

Top performer is obviously China, but what happened to India? Japan ranks 1.9 times more Internet users than India. The reason why Japan’s Internet market is so volatile is because of its culture – And we can also blame a lot of these to governmental policies. No wonder why Japan is on top of the world.

Malaysia ranks at No. 7, and you can find reasons why here. Have any suggestions to why? Comment here.

How can you use this data? The number of Internet users in a country can tell you the amount of reach you have in a geographical location – The capping limit and amount of targeting viewing you can have in a particular industry after filtering process is done. For advanced users, they can use this data for ‘FORECASTING’, which is best left alone for professional marketers.

1. China – 215.5 million Internet users
2. Japan – 67.6 million Internet users
3. India – 35.4 million Internet users
4. South Korea – 29.0 million Internet users
5. Australia – 12.6 million Internet users
6. Taiwan – 11.9 million Internet users
7. Malaysia – 9.4 million Internet users
8. Hong Kong – 3.9 million Internet users
9. New Zealand – 2.6 million Internet users
10. Singapore – 2.3 million Internet users
11. Other Asia Pacific regions combined – 86.6 million Internet users

Other countries that are not mentioned in the list are:

Brunei, Cambodia, Macau, Fiji, Kiribati, North Korea, Laos, Marshall Islands, Vietnam, Micronesia, Nauru, Nepal, Philippines, Palau, Papua New Guinea, Samoa, Solomon Islands, Timur-Leste, Tonga, Tuvalu, Vanuatu, Guam Islands, Northern Mariana Islands, American Samoa Islands.

Internet Usage in Asia

How can you use this data? From here, you can see whether you should spend more on rich media, flashy sites, or more interactive media or full-movie/flash based creatives. Of course, there are many other factors such as broadband speed, target demographics, browser types, etc. but this can be a good initial indicator for your campaign planning patterns.

Compare this data with the number of Internet users (volume) found above this paragraph topic, and you can start using and digesting data!

1. Hong Kong – 25.6 hours spent online in average
2. Singapore – 21.4
3. Vietnam – 19.9
4. Australia – 19.6
5. Japan – 19.2
6. South Korea – 18.1
7. Taiwan – 18.1
8. Philippines – 17.8
9. Indonesia – 15.8
10. New Zealand – 15.4
11. China – 14.9
12. Malaysia – 14.1
13. India – 11.0

Why is this data so important? Because Marketers need to know how much a particular set of demographics use the net, so that content targeting, content creatives and content segmentation can be carefully planned and steadily well-consumed. This metric is more for intermediate to beginner marketers, where they digest this information and compare it with their marketing plans to collect necessary data for their marketing campaign(s).

Top 15 Web Properties (Group) Used by Asia Pacific Internet Users

How can you use this data? These data are essential when it comes to identifying which group of sites you’re going to target most for different regions. Although this is a very general data and tells you almost nothing, it could be very useful for pulling in huge investment deals (usually used by telcos’, investment bankers and other misc. big businessmen).

Highlights include:

1. The Top 15 Global properties source the majority of their audience from outside the U.S. However, the top global sites’ appeal to the Asian Pacific audience is below average.
2. Global sites’ ability to develop or acquire local channels is important to international growth.
3. Tencent, Inc., the parent property of the very popular Instant Messenger application QQ, is the first Asian property to break into the Top 15. However, almost all of its traffic comes from Asia, particularly from mainland China.

That leaves us Malaysians asking ourselves: “Where are we?”

Global Sites’ Performance in Asia Pacific

How can you use this data? With the numbers, you’ll get nowhere. But conceptually and understanding a target geography (and its demographics), you get the picture. I’ll depict Malaysia’s performances versus these giant web brands here, then below, tell you how to use this.

If you look closely at the numbers, you probably won’t understand it. Let me put it this way: It means share of that country’s traffic to the site versus share to worldwide Internet traffic. (Country’s Total Traffic | Site’s Total Audience Share) vs. (Country’s Total Traffic | Worldwide Internet Population)*100. It’s [(x1 | s%) vs. (x1 | ww%) ] * 100.

What’s in emphasis here is that this data shows HOW IMPORTANT LOCALIZATION is to certain countries in Asia Pacific, whether it’s going to be local content, media or mediums.

In Malaysia,

• 0.8% (of the total) is Malaysia’s total Internet user share – This number isn’t accurate. Malaysia has only 9.4 million Internet users.
• Malaysia overperforms at Google & Yahoo sites, Facebook, Fox Media Sites and Mozilla sites.
• CBS sites (93), Adobe sites (92), Wikimedia sites (89) and Microsoft sites (88).

What is this chart trying to say? While Malaysia uses a lot of US-based Internet properties in their daily lives, there are little or almost no significance in local web properties. This serves as a CHANCE for growing ICT companies in Malaysia to outperform and prove their own worth (of content, quality and creativity) to the Malaysian market, or probably even to the South East Asian market.

There are approximately 10 ASEAN states and 570 million in population – Can your business prove itself to sustain these numbers in ASEAN alone before targeting other markets?

So how do we use this chart? Start looking inside here for what Malaysians are already using – If Google sites are dominant, then create a localized version. If Mozilla’s sites are dominant, create another localized version. Our 28.2 million population is more than enough as a start.

Language: User preferences of language in Asia Pacific

How can you use this data? Looking at this chart, you’ll know language selection for your continent. Warning: This is a very general chart. When you go into a continent, you still have to look at different target demographics in a specific group of people. For example, races vs. language of speech. Culture: Traditional vs. Modern, etc. Use this for your content targeting.

How does this help my marketing campaign? Website content and micro-campaigns. When you’re running micro-campaigns, it’s essential that you look into language because that’s a form of communication module. Voice, text, video, pictures and audio is a communication module. So if language is lost (it’s a major lost), then you’ll probably not be able to sell your goods well.

In Malaysia’s webspace,

• English is the dominant language – Safe to say it’s above 85%.
• Don’t forget, we also have different types of Chinese language, Malay language and English language.
• Bahasa Kelantan, for grassroots (non-major local language, classified under “OTHERS” in the chart above). Mandarin/Teowchew/Hokkien/Cantonese for Chinese language and Indian you have Telugu, Tamil, Hindi, etc.
• In approximate, 5-7% are non-English local language, which means Bahasa Malaysia, Mandarin or Tamil.

Local Website Dominance in Asia Pacific

What does this data show? What you can see here are Asia Pacific’s share in US-based giant brand sites, and how the three big “LOCAL CONTENT” giants, China, Japan & Korea is performing for their own target demographics.

How to use this data? If you study closer into these three countries demographics, you can safely say that the trends, type of users, age and eventual occurrences that are going on in these places are what tops off. Look into those blue tables: You can see that those sites cater largely like how the US caters for their own market, and how worldwide audiences follow their trend.

This data shows you a conceptual idea behind the success of these sites: Creating a geographically targeted, flexible and sustainable web entity that suits your own demographics FIRST, before thinking worldwide. Take into consideration China, Japan and Korea’s local sites – And you should be able to see a clearer picture to why they can be so far ahead of Malaysia.

Famous Content Categories in Asia Pacific

What’s inside here? What you see here is the famous categories (or mostly visited) content categories in Asia Pacific.

WARNING!! What you see here isn’t what you really get. Content categories may be famous, but some may not generate potential hype, traffic, conversions or proper media consumption for your website. Although “Entertainment” may be famous, but it could be all sorts of entertainment. Don’t blindly follow these charts: Study your business and industry well before doing anything. Consult a marketing professional if you’re skeptical.

What’s else there is to be aware of? Many things. For example, Facebook may have extremely high viewership rates (time on site, bounce rates) or high traffic (visits & unique visitors), but doesn’t necessarily convert well when it comes to selling fishing equipments or property. Conversion rates for social networking sites are relatively low (through advertisements), so going ‘natural’ is sometimes better.

That’s why social media marketers take A LOT OF TIME to build a brand from scratch, especially when it has no web presence at all.

For Malaysia, there’s another important chart for you to look at (this is 2008, taken from ADMA 2009, Nielsen research).

When you look at this, it explains a few things: That entertainment alone is a huge industry, different markets do different ‘entertainment’s’, and ‘entertainment’ to some people could mean checking their email and replying to pen pals or family members overseas. Even downloading software/file.

Entertainment Reach & Usage in Asia

How do I use this data? Media consumption is definitely something that SHOULDN’T cross your mind when you see this. Reach & Usage literally means how much portion of a market consumes this material (at least once in a specific short timeframe) and usage means the amount of time spent consuming these materials. In this case, it’s ENTERTAINMENT.

What are the key data to extract from here? Primarily the reach (after filtration) and usage (don’t take the average, use demographics data filters, such as 15-24/male/students/< RM15,000 annual income/selangor-KL area/has a console. Be as specific as possible to these data – Because these data are very general.

In Malaysia, the Entertainment category has 71.0% reach, with 2.4 average ‘loitering’ hours per user. This means: Out of 9.4 million Internet users, Malaysia has 6.674 million entertainment goers with approximately 16.017 million ‘entertainment’ hours spent.

What can entertainment providers do from here? Almost nothing else. Now that you know your base, filter these with your different target market, one by one, skewer and scan the potential of spreading your ‘entertainment love’ to us Malaysians.

Top Entertainment Sites in Asia Pacific

How can I use this data? Use this data wisely as it takes on a broader scale – Showing a much larger picture than one region itself. What you can do here is visit the sites that are inside, compare it with data from all over on this site, then look into your industry and target market.

Any easier ways? Yes. Do a reverse-check on individual websites. But you’ll need to pay a premium for these tools. Run competitive intelligence reporting. If you don’t know what the hell I’m talking about, you can always contact my company.

For Malaysia, you know that sites like Youku, Tudou, YouTube, PPStream, Baidu, KuGou and CBS sites are famous.

YouTube drives 45% online Malaysians in Top 5 biggest Video Consumers

In this chart, you can see that 45% of Malaysians consume videos in YouTube at least once. Best yet, they are #5 in the Top 5 ‘Loiterers’ in YouTube.

What does this mean? It means Malaysians enjoy consuming video! With YouTube’s high bandwidth tolerance and extremely fast buffering times makes people want to watch more videos. It means the video-watching market in Malaysia is there, and it’s big.

What can be achieved here? Local ‘YouTube” should be in – Because hosting can be placed in Singapore’s mainframe or maybe Taiwan/Hong Kong as backup. You will gain a huge market for this. And advertisers will pay for all these. Telcos will eat you up the minute you go big.

Social Networking Reach & Change in Asia

In Malaysia, Facebook topped Friendster. In Philippines, not yet so. It’s still Friendster.

YOY = Year on Year, SN = Social Network.

How do I use this data? In a way, you can see what are the change rates of social networks regionally. While you can also use this data to check out the top social networks in different countries (below), you can also use this to plan targeting for you next few campaigns.

Top Social Networks in Asia

What to keep in mind: For Marketers, targeting famous social networking sites does not mean you’ll dominate the whole market – Because it’s still a social networking site – No matter how much ads or how naturalistic you are in natural advertising, it still boils down to “I want to TALK to my friends, not YOU.”

Advertisers in social networks are always, AT ALL TIMES, a stumble upon. A “Oh, you’re here too?” kind of thing. Remember that. Natural advertising (means getting into conversation and making friends, etc) have better conversion rates, but it takes time and once you screw the whole campaign, everything falls down together with it.

Natural advertising takes a lot more time. On the costing part, it depends on the leadership of the marketing team.

Top Countries for News/Information Sites Reach & Visits in Asia

55.2% of web users in Asia Pacific visited a News/Info site, and spent an average of 50 minutes.

Malaysia has only a 41.9% reach in News/Information sites in Asia. This is (I presume) measured through US-based news sites, not local news sites. It’s generally important to know what chart you’re looking at, and where they get their source from before judging the needs of your demographics and campaign.

Some of the questions you may ask through this two charts are:

1. Malaysia has 41.9%. But to what sites are these numbers measured to? Specifically, what targeting region?
2. What content do they surf to mostly?
3. What content do Malaysians share at most?
4. When it comes to international vs. local news, is there a trust issue?
5. Is alternative news media counted in this chart?

There are so many more questions you could ask, and that’s why I say you’ll need heavy personalization on all of your marketing campaigns at all times.

Search Share in Asia Pacific

Searches on Google account for two-thirds of global searches; in Asia-Pacific, Google accounts for less than 45%, where Baidu comes second (Microsoft OUT!) at 20.6%, Yahoo at 14.6%. You can see here that Chinese search engines are very dominant, although still nowhere near Google’s domination.

In Malaysia, search intensity is 83.1 searches per user. Which means you and I are, on average, searching 83.1 searches (in a specific frame of measurement time). Those data may not be interesting for you, as it could only be for those who are going huge and wide on search with bigger budgets to spend on PPC and extensive keyword research practices.

What to keep in mind: Chart shows search intensity & share. Intensity could lead to how much your website in your niche and industry can attain (keep in my % of reach and # of internet users) through search engines.

Although this data is used a lot for forecasting, it could also be useful for small timers (bloggers) and companies who aren’t familiar with web analytics, demographics analysis and user behavioral targeting for search.

Online Retail Reach in Asia

Japan, South Korea, Australia and Taiwan all have very good retail reach percentage in Asia Pacific.

1. Japan – 73.7%
2. South Korea – 69.4%
3. Australia – 57.5%
4. Taiwan – 55.2%
5. Singapore – 53.8%
6. New Zealand – 51.4%
7. Hong Kong – 51.3%
8. China – 50.4%
9. Vietnam – 46.7%
10. Philippines – 40.2%
11. Indonesia – 39.9%
12. India – 36.3%
13. Malaysia – 35.8%
    

In Malaysia, there are a few things that you’d want to keep in mind when you’re doing e-Commerce: Reach to the correct target group, offer something MORE TANGIBLE, provide good value and give excellent customer service.

The chart below shows (in sub-categories) what are performing best in Malaysia. Again, I’d like to iterate that the “Travel” and “Ticketing” industry are the biggest so far (surpassing FMCG products) in eCommerce, where ticketing boils down to hotel reservations, flight reservations, movie tickets, concert tickets, etc.

What to keep in mind: eCommerce channels can work in Malaysia, not that the market is so immature that it just cannot work. Some of the problems that Malaysians are facing when purchasing decisions are made:

1. Security.
   Some of the reasons online shoppers feel insecure about are: Revealing credit card information, fraud cases, low quality goods, insecure transactions (SSL issue) and damage during delivery.
2. Price.
   Online shoppers often compare pricing, read reviews, search thoroughly for more information before purchasing an item. Brand recognition plays a pivotal role after pricing structure.
3. Convenience.
   Online shoppers rather purchase online as compared to phone or physical shopping for convenience. Number of paying methods is #1 factor to purchasing decisions.

Before you spend millions of dollars investing into eCommerce, I suggest you consult professional marketing consulting before you start.

– End of Updated, 20th Nov 2009 –

eCommerce performance in Malaysia

Looking at this table alone could explain a lot: Malaysia is at the far right, and probably one of the countries that isn’t so much into retail yet. You may ask yourself: “Why is this so? I’ve seen so many eCommerce sites in Malaysia that’s successful.” Yeah, not really. Successful means millions in revenue and listed companies – Which leaves us only two of the most probable millionaires in the retail business (Malaysia):

1. Movie Tickets (GSC, TGV, Cineleisure & other cathays combined).
2. Airplane, tours, travel and car bookings made online (all combined).

Apparently, according to comScore, the online retail (or dubbed as total online spending in the retail industry) in Malaysia is lowest compared to many other countries we never thought we would. The list (in Asia) goes:

1. Japan
2. South Korea
3. Australia
4. Taiwan
5. Singapore
6. New Zealand
7. Hong Kong
8. China
9. Vietnam
10. Philippines
11. India
12. Indonesia
13. MALAYSIA

We’re the last one!

As you can see, comScore reports the Travel industry being the dominant retail industry in Malaysia – Which is true to most of our senses. The breakdown of categories is as followed:

*Out of 100, where each of the category of share is presented by the numbers beside it. Reach in %.

Retail – 35.8

Comparison Shopping – 6.1

Books – 10.8

Computer Hardware – 10.4


Consumer Electronics – 4.2

Computer Software – 9.6

Apparel – 3.8

Healthcare – 1.1

Mall – 0.3

Fragrances/Cosmetics – 0.9

Retail – Music – 1.6

Retail – Food – 1.3

Department Stores – 0.5

Tickets – 0.5

Flowers/Gifts/Greetings – 2.0

Jewelry/Luxury/Accessories – 0.8

Consumer goods – 0.3

Sports/Outdoor – 1.0

Home Furnishing – 1.1

Toys – 0.8

The bolded categories are some of the top performing categories in Malaysia. Apparently, only computer software & flowers/gifts/greetings are widely purchased online by consumers other than retail.

As you can see, the only notable ones are retail (in general), comparison shopping, books, computer hard & software and consumer electronics. What happened to the rest? Here are some of the factors why we suspect this happening in Malaysia.

Malaysia’s Internet Population by Age

From the chart above, you can see that MAJORITY OF MALAYSIAN INTERNET USERS (38%) are from 15-24 years old, followed by 25-34 years old at 26%, 35-44 years old at 23%, 45-54 years old at 9% and 55 and above at 5%.

So, if you sum them up and take the volume of Internet users in Malaysia (9.4 million as reported by comScore in August 2009), you get:

1. Age 15-24 years: 3.572 million users
2. Age 25-34 years: 2.444 million users
3. Age 35-44 years: 2.162 million users
4. Age 45-54 years: 846,000 users
5. Age 55 and above: 470,000 users.

For those of you in the FMCG and retail industry, you might want to take a look at this chart and measure your maximum reach, forecast your sales volume for next few campaigns and identify the market share (by competition) through this chart.

Google’s Share of Search in Asia

As you can see, Malaysian internet users mainly uses Google for their search. Ironically in Asia, Yahoo still dominates Google in overall view.

Time over time we’ve proven (and probably many Marketers in Malaysia, too) that Yahoo’s conversion rates through natural search is much higher; but lower in traffic volume and Google, vice versa.

Google’s share of search as seen on the chart, listed chronologically from highest is:

1. India, at 88.8%
2. Australia, 83.3%
3. New Zealand, 79.6%
4. Singapore, 71.1%
5. Malaysia, 70.1%
6. Japan, 47.0%,
7. Hong Kong, 37.0%
8. Taiwan, 21.2%
9. China, 14.0%
10. Korea, 8.5%

For Internet browsers, Internet Explorer is still the dominant web browser used by majority of Malaysian internet users. Mozilla users are a mix of advanced to intermediate users, mostly young (below 30 years) users. Internet savvy users prefer better browsing speed, so Google Chrome is also used but not widely.

Lower Google’s search share means more dominant local Internet properties?

Not necessarily, but most of the time it is. Just take a look at China – They have QQ, Tencent, Youku and Baidu. Most of it are local web properties and are thriving very well. Japan’s infamous social networking site Mixi.jp overrides any other US-based social networking sites such as Facebook and Friendster even after translation.

In Malaysia, local properties such as Maybank2u, CimbClicks, Mudah.my, Lelong.com.my, Lowyat.net, Harakah, The Star Online, and so forth do not cover all major industrial web properties, and also famous ones. A very good example is video sites like YouTube (majority of Chinese video viewers turn to Youku, YouTube and Metacafe). Malaysia currently do not own a big enough web video property to entice Malaysians to use it every now and then.

Google’s high share of search in Malaysia is probably because we’re so dependent on US-based properties. Social mediums such as Facebook, Posterous, Tumblr, Twitter, Friendster, etc. Let’s take a look at ADMA 2009’s chart on famous sites in Malaysia.

If you take a look at the chart above, you can see that Malaysia’s Internet properties barely scratched the surface of Malaysia’s Most Visited Sites in 2009. Because we’re so dependent on international based technology, sites, news and other web properties such as Flickr, Malaysians can be seen as followers rather than creators, which could show that innovation levels are low (MSC Malaysia – I’m looking your way).

From here there are also signs that many web mediums in Malaysia are not performing very well – Only some are: Such as Mobile 88, Lowyat, Mudah and probably a few more. The heavily advertised WeMotor.com didn’t even come close. This also proves that niche industries like WeMotor.com should place emphasis not on number of visitors and visits, but pages/visit, bounce rates and conversion rates (leads & sales).

Is language a barrier for US-based sites to penetrate Asia?

Most of the time, also yes. If you look properly at demographics and Internet users in Russia, Pakistan, China, South Korea, Japan, Taiwan, Hong Kong, Vietnam, Thailand and Indonesia, many visits and unique visitors from their country goes to sites of their own mother tongue.

Because comScore reports that India & Malaysia is expected to have the highest number of English-speaking or English-literate community in Asia, the pressure is on us to perform: “Why isn’t Malaysia still performing well in local web mediums?”

MSC Malaysia’s duties

MSC is Malaysia’s frontliner when it comes to technology. While the Internet is the ‘now’ thing and trend, what is MSC doing to outperform its competitors? There has been reports that Indonesia and Vietnam is much faster than us in many ways – From price factors to connectivity issues, we’re quite behind.

Let’s not mention Singapore, dubbed as the “cross junction” in South East Asia. Taiwan is the “mainframe middle” of Asia for technology. Malaysia is more known for its Islamic state and practices (with OIC meetings and so forth).

For MSC Malaysia, here are the first three things you should do:

1. Look to SEARCH for, NOT develop more local web properties that supports Malaysians. Developing is not so good of an option because (1) there are many small companies out there who are more than capable of handling these projects and (2) cost of development-from-scratch is much higher.
2. Don’t allocate more funds for technology – Allocate funds CORRECTLY and PRECISELY. Allocating more funds doesn’t mean it could grow faster. It just encourages more ’sendiri makan’. Pick and choose companies who are more worthy of your funds.
3. Start technology and the web young: Campaigns around Malaysia promoting ICT practices and usage isn’t very effective among the young. Young Malaysians use the Internet not because the government encourages them to, but their FRIENDS. So, what is MSC doing?

Why is the Malaysian market this way?

There are many factors governing this issue and why Malaysia is still not dominant when it comes to retail and ecommerce. Ahead of us are countries like Indonesia, Singapore, Philippines, Vietnam, China & Hong Kong. There could be a few things:

1. Population Volume: Malaysia has a recorded number of 28.1 million people with approximately 60% Internet penetration rate (not broadband), and 9.4 million Internet users. (August 2009) You could argue that Malaysia has the lowest population among all of the countries recorded above.
2. Politics & Government: Political instability not only has been reported in Malaysia to be ‘way over’ by Economist.com, but it also affects emerging technological businesses in terms of cash grants & investments, proper search for worthy companies to lead technological revolutions, driving small and new companies to break the Asian market technology ice and certain rules & legislation ‘overprotecting’ the Internet space in Malaysia and certain governmental entities.
3. Bad broadband structure – Security is an issue when it comes to online shopping for Malaysians: Worse if the connection cannot hold transitional transactions at 99.99% successfully. Imagine if you purchase an item from an online store and you get disconnected: You could either be double charged (while clicking) or lost the item (because the system records a sale already), and many other more.
4. Terrible connection speed – Internet users are more keen to spend online if Internet connection speeds are high: They’ll spend more time online, trust would be built and rate of purchase (or probably amount spent/purchase) will be higher. See the report on Streamyx (or dubbed as “Streamyx Sucks“).
5. Insufficient web mediums – Insufficient web mediums has always been the problem in Malaysia. The Top 15 Most Used Sites in Malaysia consists mainly of US-based sites such as Google, Yahoo, Microsoft, CBS, Amazon, CNN, Facebook, etc. Our local web mediums consist mainly of news sites (Malaysiakini, Malaysia Today, Harakah) and almost nothing with a self-sustaining, substantial local Internet property.
6. Lack of innovative web media – Small companies in Malaysia don’t think far ahead enough: And data/statistical support by the Malaysian government isn’t enough. What’s dominating the Malaysian market ultimately are international web media such as Techmeme, TechCrunch, and so forth. There are small groups and sites that focuses on certain niches such as Kawan.com.my, Koolred.com, Mudah.my and so forth.
7. No proper governmental support – Let’s face it: SKMM (or MCMC) is not providing us enough data, MSC Malaysia is not looking close enough to find worthy, potential start-up companies and financial institutions/private corporations are not building the community well and good enough. So who do we blame for this?
8. Inadequate trust in suppliers – At large, Malaysia is still far behind because there are certain things our culture cannot accept. A very good example is “Insecurity when purchasing online”, “Wanting to touch the product before purchasing” and so forth which leads to our Gen X, Y and Z not purchasing. Since they cannot feel the tangibility of the product and would probably need more security, most end up taking the safer route.

There are many other reasons why it’s this way: And you can suggest more by commenting.

Summary, Key Findings & comScore Webinar

For Asia Pacific at whole:

• Global web population is now 1.162 billion, as of August 2009.
• Asia Pacific has the highest amount of Internet users, mounting at 477.2 million Internet users.
• China has more than 200 million Internet users, aged 6 and above.
• Average Internet user spends 22.4 hours on the Internet in Aug 2009.
• Vietnam as an emerging market, also has broadband connectivity in certain remote areas.
• Majority of US based technologies (e.g. Google, Yahoo, Msoft) are used mostly by Asia users.
• Internet messaging for Chinese audiences (QQ), made the big break to the Top 15 most famous in August 2009.
• Singapore counts for 0.2% of Internet audience.
• In Japan: Apple, Yahoo and Amazon sites are very, very highly used.
• Malaysia & India is expected to have highest numbers of English speaking users in Asia.
• Distribution of English by Countries in Asia: Australia, New Zealand, Singapore, India, Malaysia, Hong Kong, South Korea, Taiwan, Japan & China.
• Hong Kong, S. Korea, Taiwan, Japan & China prefer content in their own language.
• China, Korea & Japan have localized versions of their domains. (They are self-sustaining with their own web mediums)
• A lot of countries in Asia are dominated by US sites.
• Majority of China, India and Malaysia’s Internet users are young (below 30 years).
• Two third (2/3) of China’s users are below 30 years. 77% of India’s users are below 35 years old.
• In Asia, ‘ENTERTAINMENT’ is the most popular activity, followed by email, social networking, news, retail, blog, tech, community & games.
• eCommerce in Asia is growing fast – but still in infancy stage.
• Entertainment average hours/user is 2.4 hours in Malaysia, 4.1 in Singapore, Japan 4.3 hours.
• In Asia, entertainment sites (popular) are Youtube, CBS sites, QQ, Tudou Music, Youku, iTunes and Kugou.
• Singapore has 57.8% reach in YouTube.com.
• China has a few established local sites that are similar to Youtube – QQ, Youku, Tudou.
• There are 340 million unique Internet users in Asia Pacific alone.
• Facebook is the leading social network in the region, at a 14.9% increase in reach.
• Friendster shrunk in Internet users share from 8.9% to 2.9%.
• Language translation efforts by Facebook makes them take over Friendster so dramatically.
• 55.2% Asia’s Internet users uses the Internet to look for news. Vietnam has 4 out of 5 users at 80.4% reach in the news category.
• Vietnam has a high literacy level in Asia – And with its population it could grow even faster and could be the next SEasia’s China.
• Google makes up 45% and Yahoo performs better in Asia.
• Visits to retail sites is strongest in Japan and South Korea. For Malaysia, Indonesia & Philippines, it’s not retail, but travel.
• Indonesia exceeds Malaysia in eCommerce willingness to spend online.
• Weak US dollars make Chinese companies buy their way into US properties.
• Top social network in malaysia: Facebook, China: Baidu, India: Orkut, Japan: Mixi.jp, Philippines: Friendster, Taiwan: Wretch.cc.

And for Malaysia,

1. Malaysia has only 9.4 million Internet users.
2. Malaysia’s number of Internet usage hours/user by August 2009 is 14.1 hours.
3. Malaysia counts only 0.8% of the total Internet audience.
4. In Malaysia, Google, Yahoo, Facebook, Fox Sites and Mozilla Sites are most used.
5. Malaysia has 45% reach in YouTube.com.
6. Facebook is the leading social network in the region, at a 14.9% increase in reach, and also in Malaysia.
7. Malaysia has a 41.9% reach in the “News” category.
8. Average searchers/user volume in Malaysia is 83.1. (Means, each user in Malaysia searches in average of 83.1 times)
9. Google’s Share of Search in Malaysia is 70.1, where ENGLISH is dominant.
10. Malaysia is still in the infancy stage when it comes to RETAIL, which makes eCommerce still relatively weak in Malaysia.
11. Japan, Korea and Australia are willing to spend money online. What happened to Malaysia? Only on computer, flower/gifts/greetings.

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