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Exclusive: Maintaining Malaysia’s digital transformation trajectory - Part 1

Ganesh Kumar Bangah, Chairman of The National ICT Association of Malaysia (PIKOM) | May 30, 2018
PIKOM Chairman Ganesh Kumar Bangah shares insights on the state of play of Malaysia's digital economy.

PIKOM has entered into collaborations with five associations, namely : Malaysia Retail Chain Association (MRCA), Malaysia Wholesalers Association (PPM), Malaysia Digital Chamber of Commerce (MDCC), Malaysian Association of Tour and Travel Agents (MATTA) and SME Association of Malaysia to support the National E-Commerce Strategic Roadmap's objective of doubling the number of e-commerce SMEs from the present 180,000 to 350,000 by 2020. In the past, small- and medium-sized enterprises (SMEs) that had great products found it very difficult to do cross-border trade. In order to export, they had to deal with foreign exchange, the Customs Officers of all the involved countries, and so on: we needed a breakthrough to overcome such complexities.

The Digital Free Trade Zone (DFTZ) is actually a significant regional win for Malaysia in providing both a physical and digital answer to local companies trying to tap overseas markets. According to some estimates, by 2025, Malaysia will handle and move up to US$65 billion worth of goods around the ASEAN region.

In addition, the logistics sector is embracing opportunities presented by the digital economy to bring into being a digitalised architecture to the supply chain, which is encouraging trade and greater economic growth. Cross border logistics is already the new DNA of Malaysia's supply chain: increasing utilisation of digital applications will win more efficiencies as we noted during the activation of the first phase of the DFTZ.

Likewise, PIKOM supports the common national vision to position Malaysia as the regional e-fulfilment hub for ASEAN consumers. We understand that Cainiao and MAHB [Malaysia Airports Holdings Berhad] will develop a 24-hectare e-fulfilment hub in Phase 2 of DFTZ, which is slated to be operational by 2020. 

When Jack Ma came to launch the DFTZ  in November last year, he commended the team at MDEC led by Datuk Yasmin Mahmood for their quick and efficient facilitation of Alibaba's investment in Malaysia. As a Malaysian internet entrepreneur, I was so proud as this was the first time i had seen a leader of a global internet giant praising a Malaysian agency for their efficiency. 

Let's remember economist Jomo Kwame Sundaram said the new government recognises the importance of foreign direct investments (FDIs) and technology transfers from abroad. "The new government clearly favours productive industrial investments, especially with Prime Minister Dr Mahathir Mohamad's commitment to accelerate Malaysian technological progress," he said in a recent letter to the Financial Times.

While these FDI  initiatives are needed to catalyze and grow the Malaysian internet industry, we should not forget the local players. As we welcome internet giants like Alibaba, we need to support the local industry to ensure that they are able to participate and compete in the e-commerce growth that the region will be seeing over the next few years. We need to give them the right strategy, knowledge and capital to succeed in this competitive sector. The only way for us to do this is for the private sector to partner with the government in supporting our local industry. 


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