Unlocking Malaysia’s growth through e-commerce

TAM YONG SHENG @ theSundaily | 24 May 2021

LAST year was one of the most challenging time for the Malaysian economy as the country navigated the Covid-19 health pandemic. Due to the global economic challenges and border closures, the country’s gross domestic product (GDP) recorded a -5.6% growth.

However, with the rollout of Covid-19 vaccinations globally and locally, we are able to look forward to emerging from this worst health pandemic and making transitions into a recovery phase.

This is an opportune time for us to find sustainable ways to future-proof ourselves, as well as to strengthen our social and economic models.

The Malaysian government has already made great strides in this direction with the recently launched myDIGITAL initiative and the Malaysia Digital Economy Blueprint. This plan is imperative to the nation and the rakyat as it focuses on accelerating the country’s progress as a technologically-advanced economy, whilst ensuring that no Malaysian get left behind.

eCommerce, for one, was recognised as one of the thrusts that will play an imperative role in charting a part for the economy to recover.

E-Commerce providing level playing field

Historically, the global trading system and institutions have focused on large enterprises, as they were the only entities with the capacity and resources to utilise global supply chains and markets.

However, in recent years, barriers to accessing larger and more robust markets are receding and small businesses and entrepreneurs are beginning to leverage technology and global marketplace platforms to reach consumers in new ways. E-Commerce platforms like eBay are allowing small businesses, and even micro businesses, to open with minimal start-up costs and compete in global markets.

This is possible because technology and specifically platforms have dramatically reduced the cost of distance. What is perhaps most significant is that this ability to access global market opportunities is available to small and micro businesses in advanced and emerging economies, thus making it a more inclusive model of trade than the more traditional models of trade.

Going online during Covid-19

In the last one year, many brick-and-mortar retailers took their businesses online to mitigate the negative impact the lockdowns had on them and to adapt to the shift in consumer behaviour. This resulted in exponential growth in the e-Commerce sector.

In 2020, eBay Southeast Asia launched an
e-Commerce accelerator programme called “Global 24/7” to guide businesses to set up their global online business more quickly and to export their goods globally. Within a period of three months, more than 2,000 businesses applied and received training on global selling best practices to start their global export business.

This gave the Malaysian small-and-medium enterprises (SME) and micro-small medium enterprises (MSME) an opportunity to keep their businesses up and running with income through selling online.

As the Malaysia Digital Economy Blueprint rightfully sets forth, these SME and MSME will play a crucial role in realising the full potential of the digital economy, which will contribute to the country’s GDP.

Bridging the divide

In 2020, Malaysia’s total exports amounted to RM980.98 billion and manufactured goods contributed up to 86.4%. SME in the manufacturing sector contributed up to 34.6% to the total sector GDP.

This shows that there is a sizeable demand for Malaysia’s manufactured products in the global marketplace and SME are in a strong position for further growth in the industry.

The clarion call now would be for these SME to harness the opportunity for cross-border trade in a global marketplace through eCommerce.

On eBay’s platform, Malaysia is recognised as a manufacturing hub for the Automotive and Furniture product categories because of the volume of exports by SME and MSME. The four destinations that Malaysian SME predominantly export to under these categories are the United States, United Kingdom, Germany, and Australia.

By accessing eBay’s marketplace, Malaysian manufacturers currently onboard have been able to access consumers in over 190 countries. There are 185 million active buyers on eBay, representing a far larger pool compared to Malaysia’s population of 32 million.

Steps to be taken

The first step in this direction would be to double down on the efforts of supporting SME and MSME to take their retail businesses online. Entrepreneurs who are new to
e-Commerce require guidance on setting up their stores online and on digital marketing strategies as well. Incubator programmes play an important role at this juncture to help grow these aspiring entrepreneurs.

Similarly, the support has to be extended to SME that are already in the e-Commerce space by scaling their businesses to unlock more growth in the global marketplace.

This would require a deeper understanding of the barriers they face and finding solutions to overcome them.

As an example, many Malaysian SME new to global e-Commerce are unfamiliar with export shipping documentations and are not able to access competitive shipping rates. The responsive action eBay took to support this was to develop an in-house shipping platform, SEAPaSS, that guides sellers in export declarations while linking up with global shipping partners to offer rates at discounted prices to kickstart SME’s international selling journey. Beyond the aforementioned points, the more important change that has to happen is the change in one’s mindset.

At times, the barrier to taking the first step towards digitalising retail businesses is the fear of complexities in the e-Commerce space that stems from not having adequate information and understanding.

An inspiring anecdote about entrepreneurs taking their business online is that of a 65-year-old man who operated from a humble watch shop in Johor Baru.

Uncle Peter had been repairing and selling watches from his brick-and-mortar shop for about 20 years, until he realised he needed to sell online to sustain and grow his business.

He took the opportunity to start his shop online on eBay and learned the ropes of the e-Commerce trade.

Today, Uncle Peter is one of the top sellers in this category for Malaysia.

In an increasingly borderless and seamlessly-connected world, e-Commerce is the new form of cross-border trade that is transforming the global economy.

It will be one of the catalysts that propel the Malaysian economy to recovery and towards building the country’s profile as a regional digital economy hub.

There is also the unique opportunity to create economic inclusivity with cross-trade via global marketplaces like eBay because Malaysian SME and MSME now have the opportunity to participate in global trade.

The goal is to unlock Malaysia’s full potential in e-Commerce by leveraging the strength of the manufacturing sector as
we aspire to be an economic powerhouse
in Asean.

Tam Yong Sheng is eBay Southeast Asia head of cross-border Trade Business Development.