An average of 88% of Malaysian small and medium-sized enterprises (SMEs) are adopting digital economy platforms, such as e-commerce, mobile-commerce and social-commerce platforms.
This is according to a recent FedEx-commissioned study titled “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, which ranked Malaysian SMEs fourth among nine surveyed Asia Pacific countries in digital platform implementation. Among the list of Asia Pacific countries include Singapore, the Philippines, Hong Kong and China.
Compared to the other Asia Pacific markets, Malaysia has an overall higher adoption rate of e-commerce (90%), mobile-commerce (87%) and social-commerce (86%). Also, 61% of Malaysian SMEs expressed confidence that the digital economy will help reduce barriers to finding global customers beyond Asia Pacific.
According to the study, social commerce in particular is increasingly influential because it helps Malaysian SMEs overcome a variety of challenges, such as finding new customers (46%) and suppliers (44%) in other markets, custom procedures (43%) and customer service support (42%).
Meanwhile, Malaysia was ranked third in adopting Industry 4.0 technologies, with 69% of Malaysian SMEs incorporating related technologies, such as mobile payments (90%), automation software (84%) and big data/analytics (77%) in particular, into their operations. Additionally, 78% of respondents agree that Industry 4.0 technologies have enhanced efficiencies in the supply chain and distribution channels while helping reduce challenges brought by cross-border payments.
On a broader level, the survey revealed that 95% of Asia Pacific SMEs have made use of digital platforms such as e-commerce (82%), mobile-commerce (72%) or social-commerce (74%) in their business operations. Approximately 82% and 67% of SMEs in Hong Kong and Singapore respectively, are adopting these digital platforms, the study said. Also, the top social media platform used in Asia Pacific markets including Malaysia is Facebook, with the exception of China (WeChat) and Taiwan (LINE).
S. C. Chong, managing director, FedEx Express Malaysia said SMEs form the backbone of Malaysia’s economy. Hence, it is “encouraging” to see that SMEs have taken the initiative to grow their business through the adoption of new technologies, infrastructure-building and expansion into international markets.
“It is critical for SMEs to take advantage of technological advancements as a catalyst to enter into new markets, improve customer service support and experience, and provide a more efficient end-to-end customer journey,” Chong added.
Meanwhile, Ong Chee Tat, national deputy president, SME Association of Malaysia said during the recent panel discussion of the survey results that while technology may have lessen the gap between SMEs and larger industry players, SMEs still face various challenges in the adoption of the latest trends or tools in technology.
“Most SMEs may find that they lack sufficient finances, knowledge or workforce talent to adopt these new technologies. As such, we at SME Association of Malaysia are cognisant of the barriers to technology adoption and continues to guide, empower and support SMEs by providing strategic advice or counsel and initiating networking platforms to facilitate knowledge exchange,” Ong added.
Also weighing in on the conversation was Richard Tan, co-founder, Lelong.my, who said that by educating SMEs and raising their awareness about the advent of the digital economy, he is confident that there will be a rise in brick and mortar SMEs having an online presence to augment, as well as be complementary to their business.