With Malaysia’s strong trade infrastructure, stellar perception by international buyers and a supportive government, more SMEs here can and should be going online to find export markets.
The COVID-19 pandemic has had a disproportionate impact on Small and Medium Enterprises (SMEs). Domestic markets have offered little respite, with offline channels essentially forced to close for months now. Just as consumers have turned to e-commerce to replace their usual offline shopping needs, international buyers are looking online too.
Many Malaysian businesses are in pole position to export to overseas wholesale buyers online. But after having helped businesses here for more than 16 years, we know there are many more SMEs here that can be considering going online more seriously and be successful in doing so.
This confidence is drawn from our insights as the world’s largest B2B platform to match wholesalers with over 18 million active buyers from over 190 countries and territories. International buyers we speak to regularly cite Malaysia’s multilingual and multicultural attributes as good qualities for cross-border engagement, and its advantageous geography, time zone and robust trade infrastructure. There really is a literal world of opportunity out there that Malaysian SMEs here should be acting on.
Opportunities online in the new normal
We have hundreds of millions of products in over 40 categories, so there really is something for everyone. But one clear opportunity for B2B SMEs is in furniture, especially since Malaysia is ranked among the top 10 largest exporters of furniture globally, exporting 80 percent of its production.
This aligns nicely with one of the fastest-growing product categories on our platform so far this year, with demand for furniture and lamps particularly high as more people spend time at home due to movement restrictions. In fact, one of our local sellers dealing in furniture and timber received an average of 35 inquiries a month in the first quarter. Having been exporting online for 15 years, they were well-placed to fulfil the spike in demand for furniture during the pandemic. Today, 90 per cent of their revenue is from online exports.
Another area of opportunity for Malaysian SMEs is in manufacturing-related products such as packaging and printing, rubber and textiles. This should come as no surprise given that more people are shopping online and with increased hygiene expectations – driving demand for personal protective equipment and individually packed F&B items.
Diversifying through online trade
Perhaps more importantly, the majority of B2B SMEs in Malaysia are trading companies, who are well-placed to quickly adjust the mix of products to address real-time demand.
We have already seen real success stories on our platform. Take Wembs Marketing (Malaysia) Sdn Bhd as an example. It is a seasoned exporter and has been doing so for 25 years. Wembs recognised the demand they could be fulfilling online and pivoted their focus to masks and hand sanitisers during the pandemic. Because they were able to conduct their business remotely via an online presence, Wembs was able to secure close to RM400,000 from bulk orders placed by new customers from as far away as Russia and the Middle East.
Happy Grass, a local food and beverage producer on our platform, was also able to penetrate new markets such as Canada, New Zealand, the United States and Australia for the first time since its humble beginnings in 1932. Apart from a 70 per cent increase in overall revenue via e-commerce, the company has doubled revenue from online sources to more than RM1 million in its third year online, and continued growing sales even during the height of the pandemic.
The digital future is now the reality
Despite the clear rewards, many businesses are hesitant to digitalise and go online for the first time. They may not know where to invest their money, how to identify buyers for their products or the best ways to leverage existing e-commerce infrastructure that makes it easier for them successfully to sell and export online.
With the digital future now a firm reality, SMEs must overcome this fear and be willing to take that first step and adapt to their buyers and customers, or else be left behind as the pandemic’s impact continues to evolve. This is critical because global buyers are younger and more Internet-savvy than ever before, with 49 per cent of the active global wholesale buyers on our platform aged 34 years or younger. These digital natives have a clear preference for digital channels for not only their shopping and business needs but also for communication and entertainment.
HERS Manufacturing, an F&B trading company which started as a fruit juice manufacturer, exemplifies how going online can help a new exporter. The company credited its online presence for helping it to survive the Movement Control Order period, when domestic sales were almost at a standstill. Leveraging what it has learnt on our platform, HERS was able to close RM700,000 worth of export orders from Saudi Arabia, Japan, Africa and the United States, and even source for other products to sell despite supply chain disruptions.
Help is out there
The pandemic has accelerated the move online. But a mindset change is required for SMEs to benefit fully, especially with the strong support from the Malaysian government, which is determined to help local businesses and products shine on the global stage.
While an online channel helps to grow and diversify sales, working with an online business matching platform provides so much more. The proven technologies and readymade solutions on offer nowadays means SMEs can go digital without the outlay required to build infrastructure and expertise from scratch. Perhaps more importantly, we have helped countless of SMEs find success online, and we want to help even more businesses here to do so through courses and counsel by our experienced entrepreneurs.
The road to recovery is long but standing still is simply not an option. In today’s fast-changing digital reality, hastened by COVID, the world and its opportunities are still at everyone’s fingertips. By diving head-first into digital, Malaysian businesses and exporters can enjoy a head-start into recovery and prosperity.
Stephen Kuo is Head of Asia Pacific at Alibaba.com.
Malaysia National News Agency
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