BusinessToday speaks to Eileen Yap, General Manager, Singapore and Malaysia at RS Components on the boom of Malaysia’s e-commerce segment and how technology can further elevate the progress made
- Covid-19 has given a boost to the e-commerce sector, what are some of the changes you have seen and have businesses in the industry been able to keep up with the changes?
The pandemic has massively impacted consumers’ behaviour across the globe. If we take a look at Malaysia in particular, consumers have increased their online shopping habits and now expect all their favourite stores to have an eCommerce offering that will cater to their needs. We have seen in the past number of months that advancements in technology have resulted in increased accessibility to e-commerce platforms for both consumers and business owners located in remote areas of the country. So much so, that the number of e-commerce platforms users have gone up, from 11.9 million in 2019 to 13.1 million in 2020.
As a result, an increasing number of businesses are now either propelling their digital transformation journey or implementing one where they hadn’t originally planned to. By offering their services and/or products online, they are now able to reach a much wider audience and continue ‘business as usual’ — even in these unprecedented times!
If there is one positive impact from the pandemic – it has been the acceleration of digital transformation across various industries. For an established distributor like us, we have not only been able to provide customers with an array of products on our eCommerce platform, but also able to provide value-added services and eProcurement solutions that work to the advantage of our customers.
- What were your observations of Malaysia’s e-commerce sector prior to the virus outbreak?
Prior to the outbreak, Malaysian brick and mortar stores’ sales were beginning to struggle. Businesses were, therefore, already starting to see the potential in expanding their service offering online by developing omnichannel strategies that create a seamless shopping experience between online and offline stores. The pandemic propelled this e-commerce boom and emphasised the importance of building digital capabilities for business owners.
- How can technology play a role for businesses in the sector? What are some of their biggest concerns?
Businesses can face difficulty in accessing the right tech or investments that will assist in bringing their products and services to the era of digital-savvy online shoppers. By finding the right partner, businesses can utilise specific skills sets and technical capabilities of external parties to support them in their digital transformation journey as well as further develop their current e-commerce solution. Tech powers businesses with tools that allow them to provide customers with the optimum shopping experience, including quick access to a wide range of trusted products, as well as a smooth payment and transparent billing process.
In addition to being a one-stop shop for MRO and electronics products to manufacturers and engineers, we are a services and solutions provider. Our value-adding services make the experience seamless, especially for those customers who have complex or high-volume orders who require a simple procurement process. Additionally, our sourcing specialists, sales team and technical experts have the skill and knowledge required to save customers time and money. Our procurement and purchasing eSolutions will help customers better manage their supply chain and reduce unnecessary spending.
Businesses are also utilising the latest technologies such as AI or machine learning in order to support companies in achieving their overall business objectives, by giving them the means to manage their inventory more efficiently or retarget potential customers.
- With the rise of e-commerce, how well is Malaysia performing in the region?
Obviously, with the world reacting towards the pandemic and recovering from lockdown measures, businesses with an online presence and e-commerce capabilities are most likely to be more resilient under such circumstances. Retailers, manufacturers and distributors in Malaysia must include digital transformation in their strategy if they want to continue to be competitive and successful.
The ASEAN region is seising the opportunities presented by the restructuring of the global supply chain as well as the digitisation of the economy. With an expected annual revenue growth of 18 percent, Malaysia’s e-commerce industry is catching up on its neighbours.
With a tech-savvy population and the popularity of digital payments in Malaysia, we can expect e-commerce to continue growing. Businesses can be a part of this boom by giving their customers access to a wide range of products, using their knowledge of local culture and landscape to understand what customers are interested in, and offer a convenient shopping experience.
Even though our company carries more than 500,000 products for the customers’ needs, occasionally some specified products are unavailable at point of purchase due to customers’ requirements. In the event when these situations occur, our team will utilise our local suppliers and products knowledge to source for suitable and appropriate alternatives which help our customer fulfil their requirements. We believe in managing uncertainty through supply chain flexibility.
- What can the government do to develop the sector?
Support and guidance definitely go a long way. For example, by partnering with large e-commerce corporations and the Malaysia Digital Economy Corporation (MDEC), the Malaysian Government has recently launched the Shop Malaysia Online campaign. The campaign aims to motivate more consumers to use e-commerce and encourage existing e-commerce consumers to increase their spend with local online sellers.
In return, online sellers must be able to provide customers with not only a seamless website experience, but also an omnichannel experience so customers can communicate with sellers through different means convenient to them. The e-commerce platform availability in local language and local currency are also some ways to encourage a loyal customer base.
- How can the sector attract more foreign investment?
By supporting the e-commerce sector with the Shop Malaysia Campaign, the Malaysian Government is sending a clear message to foreign investors: Malaysia is not an underdog in the race to digitisation.
In line with Malaysia’s move towards a sophisticated technology industry, the government is encouraging projects involving advanced technology and a skilled set of workforce to dominate the manufacturing industry. We support our manufacturing customers by helping them source technologies like automation and sensing products to strengthen their production line and ensure the safety of employees. Modernising the manufacturing industry will give local businesses a competitive edge.
The ASEAN region has a massive potential to create a production and sourcing network that would lead to the establishment of a cross-border supply chain so that each country can contribute with its individual expertise. Malaysia has already been recognised in the region for its skills in technology production and manufacturing, and is rightfully beginning to be recognised for its expertise on an international level, which in turn will attract additional eyeballs on the country.
To attract more foreign investment, businesses can also take advantage of their niches, by showcasing them on a global stage. For example, Malaysia is well known for their beautiful textiles – Batik and Songket, and by further showcasing their unique specialities, foreign investors will follow.
Malaysia has strong exports of electrical and electronic equipment which hires most of its workforce and contributes to the nation’s economy. In particular, the E&E industry and the accompanying biomedical industry are seeing growth in recent times. Many companies are focused on advanced and lean manufacturing that drives automation in manufacturing facilities and logistics. With time and experience, R&D implementation will surely become an expertise for Malaysia in the near future.