E-commerce the future, SMEs need govt support says Malaysia’s Pikom

  • Believes SMEs, with the right help, will benefit from online channel
  • Refutes Mydin store CEO’s belief e-commerce is hurting small business

E-commerce the future, SMEs need govt support says Malaysia’s Pikom

Pikom (the National Tech Association of Malaysia), today expressed its belief and confidence that e-commerce is the future of the retail industry globally as well as locally.

“Given the tremendous potential in e-commerce to support the nation’s economic growth, local brands will stand to benefit if they have a comprehensive e-commerce plan as part of the retail strategy.  We need to support the capabilities and digitalisation of local brands,” said Pikom chairman Danny Lee (pic, above).

“The major e-commerce players in Malaysia are foreign-owned; that is why quite a number of the products you buy from them are being shipped from overseas. This is also why we believe it is imperative that our local small and medium enterprises (SMEs) build a strong brand presence through online channels,” said Danny.

Pikom’s stand is believed to be in response to a leading Malaysian entrepreneur’s criticism against the government’s support for e-commerce and his belief that it is the foreign players who benefit most. While he did not name them, the two leading e-commerce platforms in the country are run by Singapore based NYSE-listed, SEA Group, which owns e-commerce player, Shopee and Lazada which is owned by Alibaba Group and operates online marketplaces in a number of Southeast Asian markets, including Malaysia.

The entrepreneur in question is Ameer Ali, founder and managing director of one of the country’s largest supermarket & department store chains, Mydin. Amplifying his comments is the fact that Ameer is also president of the Bumiputera Retailers Organisation and vice president of the Malaysia Retail Association.

In its statement Pikom does agree with Ameer that the government should do more to help local players compete in e-commerce, stressing that the government can play a major role in helping local SMEs to increase their online presence, including in areas such as online marketing, brand building, product positioning, pricing strategy and omni-channel rollout. “With the support from the government, SMEs can fulfil their aspirations to penetrate regional markets,” Danny emphasised.

“In the popular e-marketplaces, undoubtedly the bulk of products listed are those that are shipped from overseas. That’s because quite a number of local SMEs are not as well versed with the right marketing mix for their product, as compared to their overseas competitors,” says Danny.

Digital marketing, performance marketing, inventory planning, multi-webstore management and customer care services are available through e-commerce enablers in the country. There already exists Malaysian expertise in this area with Commerce.Asia and iStore iSend among a number of players able to assist Malaysian SMEs find the best fit for them.

Danny points to ‘live commerce’ as an example of a new online avenue that could be used by local SMEs. Live commerce uses influencers to conduct live video streaming, while providing shoppers the ability to interact with sellers and purchase products instantly.

“Currently, local SMEs may not have the necessary expertise, so we need to have initiatives to support it. With the right support, SMEs can reap the benefits of e-commerce as proven by some local brands which have seen their sales grow by 10 to 20 times within a year after partnering with local e-commerce enablers,” says Danny.

Meanwhile, there is Government support such as the SME and Micro SME e-Commerce Campaign and Shop Malaysia Online campaign, with RM300 million funding under the Permai Assistance Package.

However government support must come with a caveat, Pikom emphasises. “While this is a promising start, due care must be undertaken to ensure that the majority of funding should be channelled to SMEs, and not foreign players that should be able to fund their own initiatives.”

As such, Pikom states that the issue is not e-commerce, as Ameer seems to believe but rather the emphasis to help local SMEs sell online.

To help develop the local e-commerce merchants, at Pikom’s end, the association has been organising the #MYCYBERSALE, an annual national initiative in collaboration with the Malaysia Digital Economy Corporation (MDEC) which has been successful for six years running., The number of merchants coming on board has grown from 283 to 1,510 over the six-year period.

“#MYCYBERSALE has been very successful in catalysing the growth of the national e-commerce industry contributing RM392 million in Gross Merchandise Value (GMV) during the 7-day sales in 2019,” Danny points out.

Pikom is calling for high level dialogues between the government with local SMEs and e-commerce players to further nurture growth for the Malaysian e-commerce sector and ensure that this fast-growing industry will benefit local retailers.

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