eCommerce is becoming the standard form of Commerce, according to Malaysia Digital Economy Corporation (MDEC) CEO Datuk Yasmin Mahmood. “eCommerce will be THE Commerce,” she said in a live interview. “There will no longer be eCommerce because Commerce will all be ‘e’. That’s what Malaysia’s Digital Free-Trade Zone (DFTZ) is really about: leveraging on how we see global trade is being redefined, and responding to the situation.”
Yasmin was speaking to Juliette Saly, the host of Bloomberg Markets Asia, in a live broadcast here recently, in response to a question on whether she saw Malaysia as competing with the lights of Shenzhen and Silicon Valley.
“We have a very big population of Small- and Medium-Sized Enterprises (SMEs) in Malaysia. Our vision is to make them natively digital, because once you are natively digital, you should be natively global.”
The MDEC CEO said that one of the major outcomes that MDEC has for the DFTZ would be increasing the number of participating SMEs. “We already have 2,000 SMEs who are onboard, and they are now selling across the Alibaba platform. Alibaba is our catalytic partner, and they have a very similar vision called the Electronic World Trade Platform (EWTP),” she said, adding that MDEC’s goal was to grow the number to hit 10,000 SMEs.
Growth in GDP contribution
When asked about the evolution of Malaysia’s digital economy – which is predicted by the World Bank to contribute 20% to the country’s Gross Domestic Product (GDP) by 2020 – Yasmin said that the current contribution of 18.2% was a good indicator of how close Malaysia is to achieving the target. “Malaysia has always had a very strong focus on the digital footprint, and how the digital revolution can drive the economic agenda for the country.”
She added that a lot of it was driven from across the board, both from domestic companies investing, as well as from Foreign Direct Investment (FDI). “In fact, last year, our FDI rose by 19% – one of the highest that we’ve had in a long while.” This is in line with the revelation in earlier interviews that workforce and talent analytics platform CXS International and Singapore-based Venture Capital firm Vickers Venture Partners have established offices in Kuala Lumpur.
The vibrant local startup ecosystem
Yasmin said: “A lot of it is based on the back of a couple of initiatives and policies that we have taken over the last few years. One of them is the vibrancy of the startup ecosystem – and as we know, the startup ecosystem is crucial towards driving the innovation economy. These are the people that will push the envelope on innovation, and we have had a pretty vibrant and very robust start-up ecosystem that has developed over the last couple of years.”
The MDEC CEO said that she thinks there are some natural ingredients in Malaysia that are making startups from Malaysia as well as all over the world to come and ideate, incubate, and grow their businesses in Malaysia. “Firstly, we have a natural testbed that represents many countries in ASEAN and in emerging countries. So, we’ve got a decent consumer base of 32 million people – and they are highly connected, with an active Internet user base of close to 80%,” she said.
She added that not only were Malaysian consumers very familiar with all cultures – Western, Eastern, and Middle Eastern – but that the presence of vertical industries (such as oil and gas, manufacturing, and plantations) in Malaysia made it an ideal testbed.
Yasmin continued by saying that the second component that attracts startups to Malaysia is the people, because Malaysians are very entrepreneurial. “In fact, some of the early startups – JobStreet, iProperty – they’re all Malaysian-based startups. And on top of it, with such business-friendly government policies and tax exemptions that we have here, a startup can come into Malaysia with 100% foreign equity and be able to start up a business.”
She said that to set up a company in Malaysia takes approximately two weeks, and that there were tax exemptions available. “There is also a policy that we introduced last year – the Malaysian Tech Entrepreneur Programme – which allows for a technopreneur to come in on a 5+5 Resident’s Pass. And if you are a bright young mind who wants to come in and ideate your business plan and your ideas in Malaysia and just incubate it, we also give a one-year Professional Visit Pass, before you go on to the Resident’s Pass.”
When questioned on the topic of cybersecurity – on how companies that are affected can win back trust, and whether the current issues facing the online world would see the need for stricter regulations in cybersecurity – Yasmin said: “I think the world is catching up on this. You know, it’s a world of data – and the Internet has also evolved from a platform of just information sharing into a platform of building trust.”
“So how do you build trust – not only for being a data repository, but also for conducting data transactions? That is why we see new technologies that are coming into play – the blockchain technology and so on. I think that the whole world is catching up towards addressing how data is being handled. It’s a very critical layer,” she concluded.
Click here to view a recording of the live interview