Online vs Offline Retail in Malaysia

Online vs Offline Retail in Malaysia

Under the shadow of the pandemic, Malaysia’s online retail scene has seen immense growth.

Between March and December 2020, online retail sales index averaged at about 33%, versus 22% at the start of the year.

But where does that leave offline retail? In this article, let’s draw back the line and get back to basics.


What is online and offline retail?

Retail by definition involves the sale of goods or services from a business to a consumer. Both online and offline retail involve the same concept, but through different channels.

Online retail, otherwise known as eCommerce, is simply the sale of goods and services through online platforms. The internet has granted worldwide visibility like never before and enabled businesses to carve out paths of their own. Today, the bulk of online retail stems from giant eCommerce platforms such as Amazon, Lazada and Shopee.

Offline retail involves the same parties, but is done via a physical storefront location. This way, the shopping experience is enhanced and consumers can interact with the business in person.


Online retail: Impact and inspiration

Thanks to our dynamic economy, developed infrastructure, high internet penetration rate and sizable talent pool – Malaysia is among Southeast Asia’s most attractive eCommerce hotspots.

According to JP Morgan, the B2C eCommerce market is expected to continue on its upward compound annual growth rate (CAGR) trajectory of 17% growth all the way to 2023.

So what does online retail bring to the table that the offline version doesn’t?

  • No geographical limitation
  • Less cost (capital, overhead, inventory, staff)
  • Satisfies rising need for convenience
  • Paves the way for niche markets
  • More autonomy for small businesses


Offline retail: Seeing the silver lining

Following a positive growth rate up till 2019, the brick-and-mortar retail scene took a huge hit in 2020 where it shrank -16.3%. This was offline retail’s worst record yet since the Asian financial crisis 22 years ago.

Does all that render offline retail irrelevant? Not so much. Some aspects of the retail experience that can only be achieved with offline retail include:

  • Instant gratification for the consumer
  • Ability to obtain immediate and accurate information on the product or service
  • Better poised to garner the consumer’s trust
  • Enhanced end-to-end shopping experience


Can both share the retail stage?

While the world is lined up to enter the future alongside eCommerce, there’s still a case to be made for offline retail.

The authenticity of the overall shopping experience is one that will be difficult to replicate. This, alongside other factors like the nature of the business will continue to be driving factors for the survival of offline retail.


A sustainable retail model might therefore mean integration of both offline and online aspects to capture the best of both worlds. Senwave’s New Retail Solutions are dedicated to helping your business make the transition from offline to online. Get in touch with us to find out more!