Local SMEs top 4 in digital economy platform adoption

By KEVIN WONG / Pic By BLOOMBERG

Malaysia’s small and medium enterprises (SMEs) are among the top four leading countries in Asia Pacific (APAC) in the adoption of digital economy platforms.

FedEx Express’ “Global is the New Local” digital economy and Industry 4.0 survey showed that Malaysian SMEs have an 88% adoption rate behind Vietnam (95%), the Philippines (93%) and China (90%).

The survey puts Malaysia ahead of the more developed economies of Singapore (67%), South Korea (59%) and Japan (39%).

FedEx Express Malaysia MD SC Chong said based on the survey, Malaysia has managed to surpass South Korea and Japan due to the country’s high mobile penetration rate.

“We observed that Malaysia has a high mobile penetration rate of 146% — which is a very outstanding figure — and about 22 million Internet users, 18 million active social media users and another seven million e-commerce shoppers.

“Another reason why Malaysia has a better adoption rate than Japan and South Korea is probably due to the lack of interest in digital economy among their SMEs,” he said after announcing the survey findings in Kuala Lumpur yesterday.

He said many SMEs started their businesses online, especially in the mobile format, due to the widespread use of such devices by Malaysians.

He said many businesses have also started to use social media such as Facebook, Instagram and WhatsApp to reach their consumers.

The survey by the courier company showed that 82% of the local SMEs are exporting outside APAC.

Chong said SMEs are always looking to reach as many markets as possible.

“With today’s empowerment of e-commerce, regardless of the platforms, SMEs are able to conduct international business easier and faster.

“There is no reason for them (SMEs) to not go and explore other markets outside APAC. That is why there are significantly more SMEs exporting to countries and markets outside of this region,” he said.

Lelong.my founder and MD Richard Tan said the Internet and e-commerce platforms have made it possible for SMEs to operate big businesses which were never possible in the past.

“For Malaysia, for us to grow, is by selling our products overseas. And in the past, smaller companies did not have the budget to attend trade fairs, build networks and create potential deals.

“Today, with the Internet, there is a platform to make it possible for SMEs to operate a global business,” he said. Meanwhile, the study also showed a significant high adoption rate of mobile payments among Malaysian SMEs at 90%.

At the same time, automation software and big data analytics are among the top Industry 4.0 technologies being used by the industry at 84% and 77% respectively.

In addition, 78% of the respondents agreed that Industry 4.0 technologies have enhanced efficiencies in supply chain and distribution channels, while helping to reduce chal lenges brought upon by cross-border payments.

SME Association of Malaysia national deputy president Ong Chee Tat said SMEs and Industry 4.0 are key components towards the growth of the nation to achieve a high-income economy.

“While technology may have lessened the gap between SMEs and larger industry players, SMEs are still facing 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,” he said. He added that the association is 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.

The study was conducted by Harris Interactive on behalf of FedEx Express to offer insights into import and export opportunities and the challenges facing SMEs.

The results are based on interviews with 4,543 senior executives of SMEs through online and telephone in nine markets in APAC.