In this article, we will explore the current state, analyze the growth potential, and identify future opportunities for investors and brands to capitalize on. With a rich history in sports and a young population, the country has substantial potential for growth in both sectors.
Malaysia is the sixth largest country in Southeast Asia with a population of approximately 33 million people. It boasts of an incredible internet penetration rate (99%), a high literacy rate (99.7% for youth aged 15-24), and a staggeringly low unemployment rate of just 2% in 2023, Malaysia offers a highly enticing market for brands, investors, and expansion into Asia.
The Malaysian economy is characterized by its diversity and is projected to achieve a GDP growth of 4.5% in 2023, with further improvements anticipated in the years ahead, driven by advancements in tourism, domestic demand, and of course, the sports and esports industry.
Malaysian Sports: State of Play
The sports industry in Malaysia is a significant contributor to the country’s economy, contributing US$ 21.89 billion / RM101.72 billion to the country’s gross domestic product (GDP) in 2018. The revenue in the Sports & Outdoor market in Malaysia is projected to reach US$137.40m in 2023. The revenue is expected to show an annual growth rate (CAGR 2023-2027) of 9.24%, resulting in a projected market volume of US$196m by 2027.
The Malaysian government has outlined a massive US$ 73 Million Budget in 2023:
– US$ 34 million / RM154 million meant for the development of a comprehensive sports ecosystem, which involves identifying new talents, training programs, and equipping sports facilities.
– US$ 32 million / RM145 million is for the maintenance, upgrading and building of sports facilities throughout the country.
– US$ 6 million / RM29 million for Motorsport development.
– US$3 million / RM13 million has been reserved for Esports.
Football is the most popular sport in Malaysia, with the Malaysian Football League being the top-tier professional league in the country. With 13 million fans, football dominates fandom in the country, with the Premier League getting the lion’s share of the support.
As we extensively covered in our previous articles on Thailand & Vietnam, a vast majority of these fans are between 18-34 years old. The Asian Football Confederation (AFC) has a long-standing history in Malaysia dating as far back as 1965, when it moved its secretariat from Hong Kong to Penang. On May 17, 2000, the AFC found a new permanent home – the AFC House in Kuala Lumpur as well.
Love for the beautiful game is evidenced also by the upcoming combined ASEAN (Malaysia, Indonesia, Singapore, Thailand & Vietnam) FIFA World Cup bid for 2034. Malaysian billionaire Vincent Tan owns Cardiff City FC and Air Asia Founder Tony Fernandes owned Queen’s Park Rangers for almost 13 years, until selling his stake in July 2023.
Despite the popularity of football, there is potential for growth in other sports. There are established professional leagues in Basketball (MPL D-League), Futsal (MPFL), and Field Hockey (MHL). Badminton and Sepak Takraw continue to be wildly popular. In addition, the Badminton World Federation (BWF – international governing body of the sport of badminton) is headquartered in Kuala Lumpur, the capital city of Malaysia.
Malaysia has hosted international events in badminton, including the Badminton World Federation’s World Championships and the Thomas & Uber Cup. The annual Badminton tournament, the ‘Malaysia Open’ is one of the most prestigious events in the world. With a storied history and multiple world-class athletes – Malaysia is well poised to produce more local champions and properties with the right investment and support to diversify its revenue streams in sports.
Malaysian Esports: State of Play
The esports industry in Malaysia is experiencing rapid growth, with the government recognizing it as a legitimate industry and investing in its development. According to a report by Niko Partners, the esports market in Malaysia is expected to be worth USD 347 million by 2024. The number of esports enthusiasts in Malaysia is also projected to grow from 4.8 million in 2020 to 7.8 million by 2024.
The Malaysian government’s National Esports Blueprint aims to develop the country into a regional esports hub, with initiatives such as establishing esports academies, developing esports infrastructure, and promoting esports events. The blueprint has already led to significant developments, such as the opening of the Malaysia Esports Arena, a state-of-the-art esports facility in Kuala Lumpur.
The Malaysia Electronic Sports Federation (MESF) serves as the official regulatory body overseeing electronic sports in Malaysia. With a steadfast commitment, MESF aims to foster the sustained development and expansion of the entire esports ecosystem within the country. The federation’s primary focus is to advocate for esports inclusion and advancement at all levels, benefiting gamers, industry stakeholders, and fostering national unity.
They also organize tournaments, such as the highly anticipated LIGA eMAS Season 2 that is presently underway, featuring a substantial prize pool of RM 160,000. The tournament has garnered full participation across popular esports titles such as Dota 2, Tekken 7, PUBG Mobile, Mobile Legends: Bang Bang, Valorant, and Fifa’23.
Esports athletes are now bringing national glory on the global stage, with Malaysia winning 3 gold medals at the Commonwealth Esports Championship 2022 held in Birmingham, England.
Mobile Legends: Bang Bang, League of Legends, and Dota 2 are the most popular esports titles in Malaysia. The country has also produced world-class esports athletes, including Mushi, who is considered one of the best Dota 2 players in the world.
Local Expert Interviews
Asia Sports Tech had the privilege to sit down with two esteemed experts from the Malaysian sports industry. We spoke at length about the status of sports, sportstech and opportunities in Malaysia, and we are proud to bring you some highlights.
First up, Raymond H’ng, Group CEO & Co-Founder at Athletes for Athletes (AFA). AFA is a venue operation and tech solution with a strong partnership with the National Sports Instiute and a plethora of private sports business entities. Raymond said:
“Amidst the post-pandemic landscape, Malaysia’s sports domain has blossomed into an era of remarkable expansion. Witnessing a surge in activity, sports has seamlessly woven itself into the fabric of urban living, embodying the newfound lifestyle of countless individuals.
With over 50% active participation and a continuing upward trajectory, we are amidst an exhilarating transformation, a lifestyle shift that ripples through every facet of existence, even redefining the paradigms of commerce, notably within the realm of property development.
In this vibrant evolution, sports facilities have emerged as pivotal amenities, intricately woven into the tapestry of city planning. A wave of forward-thinking developers recognizes the indomitable allure of these facilities, leveraging them to beckon and engage denizens to their urban blueprints. The resonance is undeniable – a harmonious synergy between the aspirations of the populace and the visionary endeavors of enterprising architects.
As stewards of a sports-centric technology platform, at AFA we are fervently immersed in this exhilarating juncture. We proudly contribute to the seamless integration of this lifestyle, facilitating the connection between enthusiasts, communities, and innovative solutions. With boundless excitement, we navigate this landscape, emboldened by the realization that we are not merely witnesses, but active architects of a paradigm shift – a phenomenon that harmonizes the pursuit of wellness with the dynamism of modern living.”
– Raymond H’ng, Group CEO & Co-Founder at Athletes for Athletes (AFA).
Next, we have Omar Zin, Writer – Football Tribe Malaysia, a prominent football media website. He shared his deep insights on the state of industry:
“After three years being one of the industry mostly affected by lockdown and restrictions due to Covid-19, Malaysian sports recovering at such a rapid pace, with development of the sports and interests from the fans grow further than ever before. This year we saw brand new broadcast deals and a higher number of sponsorships for the top-flight football league, on top of excellent coverage for badminton, women’s netball, sepak takraw and hockey.
There’s also the welcoming return of national community basketball league, the national women’s football league and the introduction of first ever men’s national baseball league. Malaysian Sports Ministry also aimed for a higher budget, attracting 1 million youths to join the sports program, establish more recreational spaces and requesting tax incentives or tax rebates for parents who send their kids for sports coaching, as well as more sports program for women.
In esports scene, both sports and education ministry will be collaborating for introduction of esports as part of co-curricular activities and establish esport clubs in schools. Malaysian sports are developing and growing even bigger and better, with quality coverage and high viewership, there’s no doubt the industry will gain more support financially and emotionally, creating a path for a brighter future.”
– Omar Zin, Writer – Football Tribe Malaysia
What the future holds..
Malaysia’s sports and esports industries offer significant growth potential and future opportunities for investors and brands. The sports industry is already worth billions of dollars and is expected to continue to grow, with the right investment and support. The esports industry, on the other hand, is still in its early stages but with the government’s recognition of esports as a legitimate industry and the launch of the National Esports Blueprint, Malaysia has the potential to become a regional leader in the sector.
At Asia Sports Tech, we believe that by capitalizing on the convergence of sports and esports and the rise of new technologies, investors and brands can position themselves for success in Malaysia’s vibrant and growing sports and esports industries. Innovative business models, strategic partnerships, and targeted investment in infrastructure and training will be the key drivers.
As a prominent consulting firm specializing in sports, esports, health, and well-being, AST is actively leveraging our expertise to contribute to Malaysia’s dynamic landscape. With strong government backing, a thriving economy, and a population brimming with talent and passion, Malaysia possesses tremendous potential to emerge as a key player in the global sports and esports industry. AST is thrilled to be part of this exhilarating journey. Malaysia’s unwavering commitment to excellence and its efforts to foster a robust sports culture are certain to inspire future generations.
If you want to learn more about the Malaysian market and get involved in supporting its growth, reach out to AST today!
