The Annoying E-Commerce Paradox in Malaysia

Posted by | February 13, 2011 | General | 21 Comments

rbc4_40 In my previous seminars, I’ve always asked my participants a few questions to get them to realize the truth about their chances of making money online.

I ask them “Do you want to learn how to sell online?”

Of course, their answer is YES.

Then I ask them, “Do you want to learn how to build a successful Internet business?”

Of course, your answer is an astounding YES.

Finally I ask them, “Have you ever bought anything online?”

Suddenly, an awkward silence fills the room. People start looking around at each other, murmuring something just outside my hearing range.

“Is it safe?”, one participant asks. “Where do I buy online?”, asks another.

After some serious thought, one guy at the back puts up his hand to tell me that he has bought stuff online before. So I turn my attention to him, and ask him “What have you bought online?”

He replies, “Your seminar ticket..”

Funny right? But the truth is, I’ve heard the same thing in all my events. People want to make money online, but are too afraid to buy anything online themselves. It’s a paradox.

How can you truly understand the intricacies of e-commerce, if you’re not ready to put in your credit card information and click “Buy Now”. How will you understand the process that takes place once you’ve placed your order, if you’ve never made the order?

I can tell you for a fact that unless you are ready to actively buy stuff online, you will never succeed in Internet marketing.

Is it Really Safe to Buy Online?

I get asked that question all the time. It seems that for whatever reason, most Malaysians are afraid to put in their credit card information and buy anything online. It’s like they have a few million dollars in their bank account and are afraid that they will lose it overnight.

How much safer is it to give your credit card to a waiter, or to use it at your favorite pub?

I’ve been buying online since 2003, and I’ve never had a fraudulent charge on my credit card. Of course, there are a few things you need to look out for to make sure that your credit card transaction is secure. However, the chances of your credit card information being sniffed and charges make fraudulently to your account are slim to none.

Even The Malaysian Gurus Don’t Buy Online

The most surprising thing is that even the local gurus who are teaching people how to make money online, don’t buy anything online other than the web hosting or advertising charges for their business. I wonder then what are they really teaching?

Recently, one of the local experts asked me if Amazon ships to Malaysia.

I was shocked. As an Internet entrepreneur teaching others how to make money online, I would expect that you would have at least bought something from the largest e-commerce site in the world.

In fact, most of them don’t even have an online payment method in their websites. Not even PayPal, which by now is fully accessible to Malaysians. They just give out their bank information and ask people to bank in money to their account.

To make it worse, you don’t even need to fax / scan proof of your deposit and send it to them. All you need to do is fill up a form and tell them at exactly what time and date you made the  payment. I know for a fact that most of them can’t even track payments like these, so they just approve your orders based on blind faith.

The problem with ATM deposits is that it is not a scalable or organized payment solution. But most Malaysian marketers stick with it because

  1. they don’t make much sales anyway or
  2. they don’t have a PayPal / 2CheckOut account themselves or
  3. they are too lazy to educate their buyers

We Need Buyer Education, Not Seller Education

When I asked a few of them why they don’t accept credit cards on their website, they told me that their target buyers have no credit card. Mostly I think this is bullshit.

Their target buyers do have credit cards or debit cards, and they use it to pay for petrol, to buy groceries from Giant, and even to pay their Astro bills. They are just not using it to buy real products online.

Recently, there has been talks about how the government is going to step in to take Malaysian e-commerce to the next level by providing all kinds of help to aspiring Internet entrepreneurs.

I support this move, but at the same time I think it’s a waste of time.

What the government should be doing is creating public awareness that buying online is safe and efficient. Something of this scale cannot be undertaken by individual Internet entrepreneurs. They can do their small part, but not much more.

After all, why develop more Internet entrepreneurs when there is no one willing to buy online from them?

I believe that if the government can turn more skeptical people to regular online buyers, the rest will take care of itself.

21 Comments

  • [...] This has been a really tough project for us as we started from scratch. The biggest issue is handling manual ATM deposit payments. [...]

  • Fizah says:

    I agree with you Gobala. Our people are scared to READ, that is the number 1 reason. Or they have many UNFINISHED READING materials for number 2. Lastly seldom doing HOMEWORK and closely updates sell-page/website. We are 100 years behind others utilizing internet services.

  • adriansabah says:

    After talking to my local bank, I can tell you that it is safer to do a charge card transaction or paypal transaction than it is to do an online transfer to someone else’s bank account. With a charge card or paypal, buyers have a recourse if things don’t work out. With an online transfer, unless (and I’m guessing here) it has been reported to the police, there isn’t anything anybody can do.

  • i think sometimes it also boils down to the fees charged.
    both buyers n vendors are not willing to bear the fees charged by these payment processors.
    whereas cash deposit or bank transfer within same bank is free.

    actually from my experience dealing with customers..malaysians are more comfortable paying online for accommodation booking rather than singaporeans. they are more skeptical to do so.

  • ManDan says:

    I think i like u…U just straight to the point shooting people when your emotion triggers u to do it…Well, to me; it’s definitely a right thing to do. (such as calling certain people / party ‘bodohness’). Because; i have encountered people with extreme foolishness to a point they really deserve to be called that. (A customer of mine once ask me – ‘how much is the price’ whereas the price already there mentioned with a h1 heading – very large and clear)

    But certain people mistaken act like these to be an egoist…But whatever it is; to me it’s comfortable to read something clear like this.

  • Jenny says:

    ha i can totally relate to the “do you buy online?” question… they don’t buy online but expect ppl to buy online from them?

  • Rhia says:

    I completely agree with you – buying goods online is actually far easier than buying things from a store. With enhanced security measures in place and a wider variety of goods available to people, it would help to boost the digital industry by increasing online transactions…

  • Eric S says:

    It looks to me buying online has been going on in Europe and US and many other countries because they are more computer savvy than Malaysians, I guess. And also most of them are used to online buying that it’s so common nowadays. To them, convenience is important. And I believe they seldom ever get any problems with online buying that it became their way of life as well. But in Malaysia, it’s like something very new. They prefer to see it, touch it, feel it before they will buy. This mentality has to be changed. But to change it, there has to be more awareness that buying online makes life even more easier and safer, saves time and transportation cost than buying in the old ways.

  • Vivian says:

    I think we’ve all had experiences like that.
    Leading people is no easy task.

    Good article.

  • yes very funny. well said thanks for sharing.

  • Siew Yik says:

    I think you pointed out a very important problem here. But what do you think should be the solution?
    Or more appropriately, what can we do, as internet marketer to play a role in the so called buyer education ?
    Looking forward to hear your views on this.

  • eddikl says:

    That is always the problem with online buying, always have to think twice, be extra careful.

  • Janson says:

    Interesting…

    I’ve bought quite a few things online. It at depends on how legit you think the site you’re buying from is.

  • menj says:

    Probably the issue here is the confidence level, not really about the system itself.

  • That’s hilarious for someone who never buy/ sell online to get into e-commerce business. I find that there’s actually a lot of room in Malaysia for e-commerce, one just have to find the right nice, right tools and the right marketing techniques.

  • jinggo says:

    Is it Really Safe to Buy Online?.
    That question is so funny after all what we have, the cyber jaya, multimedia super highway, maybank2u,space program,UNIFI, WIMAX and all the bombastic IT stuff that our minister talk about. Thats why i think twice before selling digital product to my own countrymen. You are right Gobala about not enough public awareness on IM in Malaysia. Our media sometimes create more misconception about making money online.
    Anybody want to know whether it safe to buy online can try http://blooming.com.my? its the right time. hihi.. its awesome.

    • I bought from Blooming.com.my once or twice, and their service is really good. But of course Valentines Day is haram now so that’s out of the question for most Malaysians I guess.

  • tim says:

    Well said…
    they should at least get a debit card and buy something online…

  • Ilya says:

    Almost daily I almost get frustraded of how things work over here :). I see so many opportunities just browsing through the lowyat market place forums for example. If every clever guy or gal over there has the balls to start an actual webshop it would really push things forward. I see more and more sellers offering a 2nd channel by means of a simple webshop; and you’re right: payment and such is still done the ‘old’ way by banking in or COD (which is actually pretty doable if you live in KL or greater KL…but a serious hassle when you live anywhere else).

    Buying online – the lack of and the fear of – also has its roots in the unhealthy postal system. Though nowadays way better then ever before; webshops always offer no garantees whatsoever. In the Netherlands everything is done to make sure the consumer is able to trust the vendor. If a product doesn’t arrive; it’s either a new shipment or you get your money back no questions asked. Here I often read people are afraid of using a postal service; and think paying RM20 for a ‘safe’ shipment is too much compared to just drive to the nearest local store in the area.

    Next is the problem with the whole review atmosphere; there isn’t any here in Malaysia. In the US or Europe a webshop cannot fart without getting a bad review; which will surely make them very cautious of doing a bad job towards their clients (that trusts them). Reviews take online shopping to a new level; as it brings more trust to shops which means people will be convinced and persuaded to buy online faster. Nowadays 60% of all Dutch sales in the consumer goods section are done online….and in some areas even higher percentages.

    Last problem over here is the overal ‘Asian attitude’. What I – as a foreigner – always notice is that people find buying in a physical store rewarding to some level. As if buying it in the shop brings something extra to the purchase. I couldn’t give a crap whether others can witness my ‘big’ purchase; I laugh while sitting in my chair ordering online (even in Malaysia I almost order everthing online); and simply wait for it to show up on my doorstep. The guards downstairs must think I’m handicapped or something; as even the smallest packages are delivered at my place if I can help it :).

    Government should indeed spend more energie in creating a trustworthy and safe environment. Have them come up with an overal garanty plan; no risks when paying online, no risks when delivering via postal services and therefore no risks in ordering online. I do think Malaysia is on the verge of heading towards a more online consuming pattern yes….about time as I am sick of having to carry my own water bottles to my place :) (nah; even that is delivered as Cold Storage has a service nowadays :) – nope, we didn’t go for the big bottle dispenser :)).

    Ilya

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