A recent report noted that Malaysia’s digital exports are expected to increase to RM222 billion to the economy by 2030 from the current RM31 billion in the absence of digital trade barriers.
The engagement manager of a strategy and economic advisory business stated that works done by Malaysia on the digital economy have been very encouraging, especially in the setting up of the right organisation managing the sector.
It was also noted that the country has been very active in integrating small and medium enterprises into the digital economy and encouraging digital adoption under the Malaysia Digital Economy Corporation.
The other main aim is making sure that regulations that are being deliberated over are not rushed into to ensure that no detrimental effects are observed on digital trade.
It was pointed out that haphazard formulation of policy in the digital economy could be interpreted in many ways and it could send a signal of uncertainties to the investors.
The report was launched jointly by the a non-profit organization that promotes global trade through international trade research, a Malaysian libertarian think tank dedicated to promoting market-based solutions to public policy challenges, a non-profit business chamber with the aim of promoting the interests of its members based in Malaysia with business links to Australia, and a strategy and economic advisory business serving clients.
The report estimates the current and potential future economic values of digital trade to the Malaysian economy.
According to the report, digital trade enables Malaysian firms to reduce the cost of storing data, improves business practices, generates richer business insights and enters new markets, while facilitating more efficient management of global supply chains.
It reveals that digital trade could have a huge impact on the country’s domestic economy, with some of the biggest beneficiaries coming from outside the digital sector.
To maximise future returns from digital trade, digital trade barriers at home and abroad need to be reduced, added the report.
It outlines actions in four main areas that can help achieve this, namely ensuring open cross-border data flows, formulating innovation-oriented approaches to copyright and intermediary liability regulations, minimising border frictions, and encouraging digital adoption.
The e-commerce landscape in Malaysia
According to MDEC, half of current the population consists of digital buyers, which is why e-commerce is an important stepping block to ‘future proof’ existing businesses while opening up market access. However, the eCommerce ecosystem development in Malaysia is still at an early stage.
According to findings under the National E-Commerce Strategic Roadmap, Malaysia is at a turning point of e-commerce growth which must be sped up through government involvement. Issues that need to be resolved are lack of offerings, poor fulfilment experience, low adoption and awareness and lack of supporting ecosystem.
For Malaysia to move beyond the early stage, it needs strong support and focused government intervention to drive it forward to the growth stage.
Through efforts such as #MYCYBERSALE which started in 2014, we have achieved RM67 million Gross Merchandise Value (GMV) in 2014 and RM117 million in 2015. This was made possible by close cooperation with the nation’s eCommerce ecosystem players, thereby transforming Malaysia’s e-commerce landscape.
In addition to programmes like #MYCYBERSALE, #MYGlobalExport, and eTRADE, the National e-Commerce Strategic Roadmap was developed to double the eCommerce growth rate from 10.8% to 20.8% by the year 2020. This is done through specific government interventions along these Six Strategic Thrusts:
- Accelerate seller adoption of e-commerce
- Increase adoption of e-Procurement by businesses
- Lift non-tariff barriers
- Realign existing economic incentives
- Make strategic investments in selected e-commerce player(s)
- Promote national brands to boost cross-border e-commerce
Thus, it is evident that the Malaysian government is aware of its digital trade needs and has taken steps to plan for ensuring a better e-commerce ecosystem.