How E-Commerce Fee Adjustments Are Building A Fairer & Stronger Marketplace For All

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Malaysians love a good deal. From tracking down sales and promos to making impulsive “Add to Cart” decisions on a whim, online shopping has basically become a national pastime. And the numbers do back that up.

According to the Malaysia Digital Economy Corporation (MDEC), our e-commerce revenue hit RM1 trillion in 2021, and it’s expected to soar to RM1.65 trillion by 2025.

Moreover, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali added that the sector’s momentum hasn’t slowed down yet, with revenue climbing from RM1.13 trillion in 2022 to RM1.22 trillion in 2024.

And it’s not just local buyers fuelling this growth. Our homegrown brands are getting regional love too, as surveys found that 67% of Singaporeans, 46% of Filipinos, and 42% of Thais regularly buy Malaysian products, especially in fashion, food, and beauty.

As everyone now spends more time (and money) shopping online, it’s small sellers (a.k.a your friendly neighbourhood MSMEs) that are stepping up to meet the demand.

But behind every successful sale is a side of the story most shoppers don’t see — the real cost of doing business, which includes platform charges, commission fees, marketing costs, and even fulfilment expenses that require a delicate balance. 

A Changing Market, A Stronger Ecosystem

Recently, Shopee, Lazada, and TikTok Shop — the top three e-commerce platforms in Malaysia — all raised their fees and introduced new charges for sellers.

According to industry observers, the move is part of a broader reinvestment strategy to improve technology, logistics, and the ecosystem infrastructure that helps both buyers and sellers. 

Of course, not everyone was thrilled about that, and if you’ve been scrolling the news feeds lately, you’ve probably seen sellers calling on the government to step in.

The consensus among local sellers is that as platform fees rise, they’re feeling the squeeze, and some worry it could drive prices higher or disrupt Malaysia’s e-commerce scene.

The government heard them loud and clear and is now reviewing e-commerce fees and regulations, with plans to introduce a new bill in Parliament next year to modernise the rules.

But what if these fee hikes aren’t a setback, but strategic reinvestments — one that helps build a stronger, fairer and more sustainable ecosystem that empowers local MSMEs in the long run?

The Real Enemy: Cheap Imports & Global Price Wars

Let’s face it, the local e-commerce scene isn’t just competing with local sellers anymore. Cheap imports, especially from China, are flooding the market and squeezing local margins.

According to the Malaysian Micro Business Association (MAMBA), these imports are being redirected into Southeast Asia as trade tensions continue between the US and China.

In a statement, MAMBA said platforms need to keep investing in infrastructure, tools, and services like AI search tools, fraud prevention and other support systems, warning that without these upgrades, the entire seller ecosystem could suffer.

“We are already seeing cheap imports entering the market through new and existing e-commerce platforms targeting consumers in Malaysia, undercutting local sellers and threatening their long-term survival,” said MAMBA Secretary-General Alvin Low Wei Yan, who expects that trend to accelerate in the coming months.

Local seller Nurul, who runs a small online store, shared how brutal it’s been on the ground.

“Some of the ultra-cheap imports flooding the platforms are impossible to compete with,” she said. “We’re paying tax, hiring staff, and trying to play by the rules — and then you see RM3 products from overseas sellers.”

We can’t even cover our costs, let alone compete.

Local e-commerce entrepreneur Nurul.

Meanwhile, Gary Ng, founder of fashion brand ZUCCA, echoed the sentiment, saying that, “There’s always a risk of price wars and high competition, and it’s hard to build real loyalty when customers are one click away from a cheaper option.”

Despite the challenges, Gary says that these circumstances are forcing sellers like himself to rethink how they operate and find smarter ways to stay competitive.

The tough part is that sales across the market are slowing, so while platform fees rise, overall GMV (Gross Merchandise Value) doesn’t necessarily follow. This pushes us to be even more strategic — focusing on faster-moving inventory, leaner operations, and content-driven campaigns that stretch every ringgit spent.

ZUCCA founder Gary Ng.

In that sense, fee adjustments are prompting sellers to innovate, operate smarter and move toward efficiency and maturity. These are outcomes that ultimately strengthen the local MSME landscape.

How Fee Adjustments Fuel Growth and Reinvestment

While some sellers may view these changes as corporate greed, local industry observers point out that these adjustments are a natural step in building a stronger, more sustainable digital marketplace.

These fees help fund reinvestment, powering the backbone of Malaysia’s e-commerce ecosystem through continued upgrades in logistics, fraud prevention, AI tools, analytics and fulfilment efficiency.

These investments have tangible impact, from faster delivery turnaround times during mega-sales seasons, to more accurate refund processes and improved seller analytics dashboards that help MSMEs track performance and plan campaigns better.

By ensuring platforms can sustain these improvements, the ecosystem as a whole becomes more resilient.

And sellers are already starting to notice these improvements on the ground.

“E-commerce has empowered us,” said Nurul. “But we need platforms that grow with us, not at our expense.” She’s seen firsthand how platforms are making more effort to support small businesses and added, “They do try to support small sellers. They’ve reached out, offered guidance, and their seller tools are getting better.”

Meanwhile, Jason, who sells healthcare products online, mirrored the opinion, saying that things have improved behind the scenes and pointed out that transparency and efficiency on e-commerce platforms have come a long way.

Previously, if you got hit with a penalty, there was no way to challenge it. Now there’s a proper appeals process and more transparency. Payouts are also faster and more consistent, even during peak sales.

Local e-commerce entrepreneur Jason.

In short, what used to feel like “costs” are now transforming into shared investments that elevate quality, safety and trust across Malaysia’s digital economy. 

Building a Smarter, Sustainable Future

Now, here’s the flip side. Higher costs are pushing sellers to get more creative, especially in how they market their products.

Gary again shared how his team has evolved their approach to meet the growing demands of online retail — adapting their content strategy, experimenting with new formats, and focusing on building stronger connections with their audience.

We go live almost daily, create short videos regularly, and engage with our audience like we’re talking to friends.

ZUCCA founder Gary Ng.

When asked how rising costs have affected business decisions, Gary was very candid when he said that, “Around 18% to 23% of our sales revenue goes back to platform-related costs — this includes commissions, SST, support fees, payment gateway charges, and even refunds,” he explained.

As a result, the company has had to raise prices, even if it means getting fewer orders. “We’ve also become more selective with the products we push — focusing on high-turnover items with stable margins, and cutting back on SKUs (Stock-Keeping Unit) that don’t scale well under rising cost pressure. It’s a shift from ‘growth at all costs’ to profitable, controlled growth,” he shared.

This kind of market landscape is driving smarter, more sustainable growth, as both sellers and platforms are adapting in tandem.

Sellers are streamlining operations and improving content strategies, while platforms are reinvesting in better tools, analytics and ecosystem support.

Together, these changes are building a more balanced and resilient e-commerce economy that benefits everyone.

Why Sustainability Matters for Everyone

Platforms too face rising operating costs, from logistics and compliance to maintaining digital security and infrastructure. Fee adjustments help them sustain these operations and continue supporting millions of MSMEs nationwide.

These reinvestments don’t just benefit sellers but also enhance buyer confidence too. Stronger fraud prevention, refund systems and customer protection mechanisms all lead to greater trust, which in turn helps local sellers grow their customer base sustainably.

A Shared Commitment to Growth

If you zoom in, commission hikes look like another cost eating into already thin margins. But zoom out, and it starts to look like an investment in the ecosystem — one that builds resilience, strengthens local platforms, and protects MSMEs from being drowned out by cheap imports.

After all, Minister Datuk Armizan Mohd Ali did emphasise that although government oversight is necessary, new regulations must not stifle sector growth. 

It’s a view shared by Malaysia Cross Border E-Commerce Association (MCBEA) President Eng Kin Hoong, who said sellers and buyers alike prefer market forces—not the government—to decide e-commerce fees.

If the government step in to control on their commision rate, then may have some challanges. Because different platforms have different strategies to promote their platform. If the government steps in, the government may not know what is their strategy, and also they would just give a standard control on their rate, and this might impact the platform market strategy.

MCBEA President Eng Kin Hoong.

Echoing this, Datametrics Research and Information Sdn Bhd’s (DARE) Managing Director Pankaj Kumar notes that “reasonable fee adjustments are part of a healthy digital economy. They encourage reinvestment, efficiency and innovation which are crucial for Malaysia’s long-term competitiveness and for local MSMEs to hold their own regionally.”

At the end of the day, the question isn’t how much sellers are paying — it’s what they’re getting back. If those extra fees help build stronger, fairer, and more innovative platforms that support Malaysian sellers, then it’s not just a cost, it’s an investment in the nation’s digital future.

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