News

Tourism industry needs to adopt digitalisation amid e-commerce boom

The pandemic aggravates the challenges and calls for faster digitalisation and technology transformation

by SHAFIQQUL ALIFF / Pic by MUHD AMIN NAHARUL

MALAYSIA’S e-commerce growth sees no sign of slowing down, accelerated by the pandemic and swift adoption among the users in the country.

Malaysia Productivity Corp DG Datuk Abdul Latif Abu Seman said challenges in digital adoption and technology onboarding are among the main barriers for productivity growth and business expansion at the sectoral and firm levels.

The pandemic aggravates the challenges and calls for faster digitalisation and technology transformation.

“In World Competitiveness Yearbook Report 2021, Malaysia was ranked 22nd for digital transformation among enterprises. This is an improvement from the 26th position in 2020,” he said in a statement yesterday.

“Malaysia progresses better this year, but still much has to be done in digital adoption, especially by micro, small and medium enterprises (MSMEs),” he added.

The government has launched the Digital Solution Providers Directory (DSPD) for the tourism industry recently to enable access to information on available digital solutions for tourism firms to engage.

Maximum usage of the directory by the tourism industry players is expected to escalate digital adoption in the industry to boost productivity growth.

Champion of Tourism Productivity Nexus Rohizam Md Yusoff expressed similar sentiment, saying that the industry needs a reset and the industry needs to build resilience to weather the future.

“We must adapt and adopt technology and digitalisation quickly for operation, delivery, communication, and marketing and promotion. The industry must go online. To do so, the DSPD for tourism will facilitate the players by providing the options for collaboration and engagement with relevant digital solution providers,” he said.

According to Deloitte’s newly-released report entitled “Technology-empowered Digital Trade in Asia Pacific”, Malaysia e-commerce ranks first among Regional Comprehensive Economic Partnership (RCEP) member states in terms of growth rate.

The total size of Malaysia’s e-commerce market stood at 61.4% or US$6.3 billion (RM26.65 billion) of the e-commerce market size in China and ranking among developing markets after Indonesia and Thailand for this year.

It stated that compared to mature markets such as China, South Korea, Singapore and Japan, Malaysia is classified as a developing market together with Indonesia, Vietnam, Thailand and the Philippines.

“The Asia Pacific (APAC) region is expected to enter a golden age for digital trade over the next three years, on the back of dynamic cross-border e-commerce activities, rapid shifts towards a digital lifestyle by consumers, ongoing development of digital infrastructure and strengthening of regional cooperation led by RCEP,” it stated.

The report also showed that Malaysia has the highest penetration rate for sales digitalisation for cross-border e-commerce, standing at 65.7%, however, the overall cross-border e-commerce in the country has been limited by factors such as cross-border logistics infrastructure and technical operations, impacting its development significantly.

It stated that cross-border consumption only accounts for 42% of the market size of the Internet economy in Malaysia, which is much lower compared to mature markets among RCEP members at present.

The payments and sales are the two trade functions with the highest level of digitalisation with the penetration rate of payments digitalisation is 55% and 53% for sales digitalisation as the mature markets adopt more digital technologies in payments, sales and logistics.

The report added that the rise of micro-multinational enterprises (mMNEs) has become the main drivers behind the transformation of digital trade in APAC.

According to Deloitte, the mMNEs provided diversified “locally-made products” and light customisation services for global buyers while contributing to over 85% of Asia Pacific’s cross-border e-commerce activities.

Deloitte China vice chair and technology, media and telecommunications industry leader Taylor Lam stated that the development of digital technologies and enhanced regional cooperation are accelerating the formation of digital trade in the APAC region.

“Digital trade is presented with brand-new development opportunities. In addition, the RCEP will promote regional cooperation, and facilitate regional digital trade,” he stated

Meanwhile, Deloitte global lead client service partner, Gary Wu said digital technologies enable global sellers to participate in global trade without any entry barriers.

“The continuous improvement of digital infrastructure will effectively resolve the two major constraints affecting cross-border trade, logistics and payments. To add, blockchain technology is also creating a new space of imagination for digital trade,” he said.

Head of WorldFirst Frankie Fan said SMEs play a crucial role in the economic recovery in the region.

“With the support of cross-border online sales and payment infrastructures, and the RCEP starting to take effect next year, regional SMEs will increasingly gain a foothold in the cross-border trade,” he added.

Dayang Norazhar

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