DESA: Helping rural Malaysian farmers reap the rewards of e-commerce
By Dzof Azmi December 12, 2019
- Non-profit platform aims to help underserved communities reach out
- Malaysian e-commerce growth rate in 2019 expected to exceed 20%
THE DESA project, a new initiative to help rural SMEs find a market for their goods through e-commerce, was launched in conjunction with e-Commerce Day 2019 and organised as part of the National e-Commerce Strategic Roadmap (NESR) intended to accelerate Malaysia's e-Commerce sector.
Describing DESA as "a non-profit platform that provides services, assistance and opportunities to underserved communities," MDEC chief executive officer Surina Shukri, also noted that it had managed to garner the support of significant companies such as Alibaba and Lazada as well as successfully helping an Orang Asli village near Bentong get their agricultural products to a global marketplace.
"e-Commerce Day has always been about getting Malaysians on board the country's digital agenda," noted Surina, while citing data from the Department of Statistics Malaysia that showed that the digital economy contributed 18.5% towards the national economy in 2018 (RM267.7 billion in revenue), of which e-commerce contributed 8% (RM115.5 billion).
"e-commerce is mission critical to the Malaysian economy."
The seeds of DESA were planted when Anna Teo, KC Ooi, Ames Tan, and Sean Lee were impressed by what they saw in the village of Bai Niu, famous for its hickory nuts.
They were invited as part of a Netpreneur training session organised by Internet giant Alibaba, facilitated by MDEC. They found out that the village generates an average of RMB50 million a year (nearly US$30 million or RM30 million) from its exports of nuts, and was identified by Alibaba to be one of its Taobao villages.
"We were inspired by how the people living in this village can export so much," said Teo, noting that they also noticed the luxurious touches in the homes of the villagers. "You can see they are not normal village people."
The success of Bai Niu was the result of the infrastructure set up by Alibaba and the China government to encourage the villagers sell their produce online. "This inspired me - why can't we do (this) in Malaysia?"asked Teo.
When they returned to Malaysia, the group sought out a test site to prove the idea could be replicated. They eventually settled on a group of Orang Asli settlements around the town of Bentong, and set to work helping the locals package, market and sell their produce such as organic rice, and ginger on the Internet.
Although there was initial reluctance on the part of the villagers, eventually the products were sold on the Desaku LazMall Flagship Store in Lazada, and on the back of a successful 11.11 campaign, was sold out within 24 hours.
Teo said that this opened the eyes of the locals as to what was possible, and they then responded positively. "The (next) time we went back, they had cleared their land and were asking, 'how much do we need to produce now?'"
Alibaba Group vice president of Global Initiatives Brian Wong, commended what DESA had managed to do in six months. "It exceeded my expectations in terms of the speed and the quality at which they executed this."
This was the first such effort for Alibaba to extend its Taobao Village network outside China. "What we have to offer... is a marketplace of over 750 billion active consumers on Alibaba, of which 400 million of those are middle class Chinese consumers looking for foreign products."
"Once you can get this model figured out, then you can scale it."
e-Commerce in Malaysia to grow by more than 20%
Surina affirmed that MDEC's role in programmes like DESA is to champion them as successes for others to emulate.
Stressing the need to "accelerate efforts to transform the e-commerce sector," Surina shared that the end goal is to boost the e-commerce industry towards an annual growth rate of more than 20%, aiming to contribute as much as US$41 million (RM170 billion) to the GDP next year.
"By 2020, e-commerce will mature into a key driver for our digital economy," she said. "The DFTZ and its related end-to-end fulfillment capabilities will be one of the accelerators for the e-commerce sector.
"e-Commerce, especially cross-border e-commerce, will play an important role in establishing Malaysia as the heart of digital Asean."