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Malaysia’s Pikom: e-commerce is the future

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

The Chairman of Pikom stated that 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 their retail strategy. The capabilities and digitalisation of local brands need to be supported.

He added that 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 Pikom believes local small and medium enterprises (SMEs) must build a strong brand presence through online channels.

Pikom has said that the government must 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 omnichannel rollout.

With support from the government, SMEs can fulfil their aspirations to penetrate regional markets. In the popular e-marketplaces, undoubtedly the bulk of products listed are those that are shipped from overseas. That’s because several local SMEs are not as well versed with the right marketing mix for their product, as compared to their overseas competitors, Pikom’s Chairman added.

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.

The Chairman 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 with the ability to interact with sellers and purchase products instantly.

It was noted that currently, local SMEs may not have the necessary expertise, initiatives need to be developed and rolled out 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.

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,” the Chairman said.

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.

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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