Aimi Zulhazmi thinks the government can win the contest to build the best Malaysian e-commerce platform by using the Malaysian Digital Economy Corp (MDEC).
Malaysia should cultivate regional mega-e-commerce platforms with strong support from domestic businesses in order to build a robust digital ecosystem that will draw employment and investment opportunities.
The e-commerce behemoths like Lazada, Shopee, Amazon, and Alibaba aid Malaysia’s digital economic growth, Associate Prof. Dr. Aimi Zulhazmi Abdul Rashid of the Universiti Kuala Lumpur Business School said that Malaysia can no longer rely solely on them.
Although the international players have distinctive supply chains that boost profit margins, he claimed that Malaysia’s economy would be in danger if it were solely dependent on them. “One major issue (if overly dependent) is if their financial difficulties will have a significant negative impact on the Malaysian supply chain that supports them.
For this reason, he told media, “it is crucial for Malaysia to develop our major e-commerce platforms, which would need a well-supported eco-system by the local companies, especially the micro, small, and medium enterprises (MSMEs)”.
Aimi Zulhazmi thinks the government can win the contest to build the best Malaysian e-commerce platform by using the Malaysian Digital Economy Corp (MDEC). With e-commerce platforms like Lazada, Shopee, and Alibaba supporting the marketing of goods and services, he claimed MSMEs have a high potential for digital benefits.
With more than 40 well-known e-wallets, including GrabPay, Touch n’ Go (TnG), Razer, and Boost, Malaysia’s e-commerce is developing.
He did add, though, that their overall adoption rate for digital technology could have been more positive. Approximately 77% of Malaysian SMEs are in the early stages of digitalization. Data from the World Bank show that prior to the digitalization pandemic, Malaysian businesses lagged behind those in the region.
A digital divide between companies and regions, high financing for digital costs, a lack of awareness of digitalization, a lack of digital talent, and infrastructure gaps are a few of the causes. The more Malaysian SMEs are prevented from benefiting from digital technologies, the longer we wait to address these roadblocks.
Additionally, Aimi Zulhazmi added, “many of our businesses will continue to lack integration into regional and international markets as well as wider and quicker access to market information and resources.”
According to Aimi Zulhazmi, Malaysia needs to develop its main e-commerce platforms in Malaysia to ensure that the country’s supply chain is not significantly impacted by the financial woes of foreign competitors. According to the Department of Statistics Malaysia (DoSM), the national economy’s share of the digital economy increased to 22.6% in 2020, up 3.4% from 2019.
The Covid-19 pandemic has accelerated Malaysia’s digital economy growth, pushing public and private sectors to adapt to new ecosystems.
MDEC has set a target for Malaysia’s digital economy to rise to 25.5% in economic contribution by 2025, with 14.2% from ICT and 8.4% from e-commerce.
Aimi Zulhazmi stated that the adoption of financial technology (fintech) has allowed financial service providers to explore new markets and give consumers in underserved or unserved areas access to services that were previously unavailable via mobile devices.
According to him, Malaysia saw a 26% increase in the number of fintech firms from 233 in 2021 to 294 in 2022. The future of our country’s growth, according to Aimi Zulhazmi, is in the digital economy, which has the potential to increase livelihoods, productivity, and innovation.
One way the digital economy can help the nation grow is by fostering inclusion by catering to underserved markets. “Second, they can make existing businesses and entrepreneurs more competitive by reducing costs and boosting efficiency.
Thirdly, they can promote innovation and scale economies, enabling the emergence of completely new kinds of entrepreneurship and business, the speaker added. The infrastructure, rules, skills, and public finance of the digital ecosystem can all be improved as a potential reform strategy.
The digital economy contributed 23% of Malaysia’s GDP last year, according to Ahmad Fahmi Fadzil, Minister of Communications and Digital, and he hopes it will rise to 25%.
The minister did note that gapless connectivity is one of Malaysia’s challenges in achieving the goal. He stated during a town hall meeting with MDEC, “In Malaysia, we face a problem where 3% of the populated areas still do not have any kind of connectivity, even though on average, our entire country has 97% connectivity in populated areas. The minister also brought up data security concerns.
Ahmad Fahmi believes that data is an important national treasure and asset. He expects more investments to be announced in the digital economy space, including venture capital and angel investors.
He also believes that the government needs more private sector involvement to ensure a conducive environment. This is important because data is an almost indestructible national treasure and asset.
He believes that the government should bring in proper investments to reduce Malaysia’s brain drain issue and retain local talents domestically. He believes that new companies that come in will serve a higher role than those who left, and that a specific policy should be put in place to bring in investments.
MDEC has implemented the DE Rantau programme, which allows both local and foreign workers to apply for a digital nomad pass.