by NUR HAZIQAH A MALEK / pic by BERNAMA
Fifty percent of Malaysian consumers today prefer the convenience and affordability of online shopping.
Domestic Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi (picture) said this should come as no surprise as e-commerce has been a significant factor in affordable goods and services.
This creates the economy and consequently enabling more enthusiastic players in the market.
However, he said there is still work to be done to ensure complete adoption of e-commerce in the country.
“The Communications and Multimedia Ministry as well as other related ministries and agencies are looking into improving the infrastructure so that in due time, the entire population would have the opportunity to dabble in e-commerce.
“There are still rural areas without internet facilities. So this is among the basic challenges that we are investigating,” he said at the launch of Market Review on Service Sector in Malaysia for Wholesale and Retail for Selected Products Under The Competition Act 2010 on Wednesday.
He added that as most of the basic needs to enable the e-commerce economy are already in place, his ministry need to look at how to enhance its potential.
“We cannot wait until it is too late because while the whole world is becoming one big village due to connectivity, there is evidently a gap.”
However, with e-commerce disrupting traditional arrangements, the market review report addressed the challenges faced by retailers.
Most retailers complained of e-commerce platforms gaining more traction due to price differences.
“Generally, the price of some products sold online is much lower than the ones sold in physical stores, especially in cases where manufacturers themselves have used the e-commerce platforms to
reach the mass market.
“From the survey conducted, it was found that the majority of the micro and small companies solely depend on brick and mortar stores to conduct their business with less than 7% using online channels for distribution,” the report reads.
Other issues reported in the review regarding competition include high cost of operation which affects retailers, back margin and trading to suppliers and difficulty in finding local labour for all retailers, wholesalers and distributors.
The market review also suggested some preliminary recommendations, including the facilitation of structural reforms to ensure efficiency and resiliency, fostering a competitive environment towards industry’s best practices, and establishing progressive policies and regulations with long term positive impact.
The Malaysian Competition Commission (MyCC) CEO Iskandar Ismail said the recommendations highlighted are significant to reduce unnecessary regulatory burden and bureaucracy.
“This is done in order to encourage the creation and growth of the business sector in Malaysia, particularly in the wholesale and retail trade industry,” he said.
Over 90% of the consumer complaints in review for the report were related to food and beverages, followed by clothing, which received about 4% in 2019.
“Often the complaints are regarding the price shift, but rarely do we think that the possibility of the price hike is due to the cartels, which is where we need to watch out,” Iskandar said.
The market review which is available at https://mycc.gov.my is set to be a vital reference for policy makers in accordance with the government’s attempt to tackle market-driven and regulatory-driven issues in the service sector.
The study began in July 2019 and has gone through extensive analysis, multiple dialogue sessions and meetings with key stakeholders in the sectors including relevant ministries, government agencies, industry and consumer associations and industry players.