PETALING JAYA: Local companies, especially small and medium enterprises (SMEs), have quickly adapted to technology adoption as a strategy to combat Covid-19 since its onset early last year, but further investments must be channelled into the right priorities to achieve the desired outcomes.
This was one of the insights revealed at the panel discussion for the third virtual event under the EEA 2021 Webinar Series, which was titled “Digitalisation Opportunities: The Future for Export Markets”.
Focused on how businesses can leverage technology to elevate their export strategies, the session saw Standard Chartered Bank Malaysia managing director and business banking head Raj Tatavarty, Fusionex Group managing director Jacob Isaac and Malaysia External Trade Development Corp (Matrade) transformation and digital trade division digital trade section deputy director Idzham Abdul Hamid weighing in on the topic.
Star Media Group Bhd digital and print chief operating officer Kang Yew Jin, (pic below) acting as moderator for the panel discussion, pointed out that companies should view the pandemic and the country’s border closure as an opportunity to double their efforts to expand market share overseas, instead of being content with the domestic market.
Pre-pandemic, the average growth of digital adoption among SMEs hovered around 9% to 10%, but that has increased to more than 20% during the pandemic in 2020 alone, with business-to-consumer companies catching up with the business-to-business players in digital transformation in the same period, revealed Standard Chartered Bank Malaysia managing director and business banking head Raj Tatavarty.
“Training and digital literacy are important for businesses’ successful digital transformation. SMEs have been resilient and are quick to adapt to the adoption of digitalisation in their front-end processes, such as setting up websites.
“However, there are two aspects to digitalisation and it’s equally important for SMEs to enhance their back-end processes in terms of inventory management, data analytics and more, ” he pointed out.
Matrade’s Idzham (pic below) concurs with his view. He added that based on Matrade’s initiatives to help Malaysian companies develop and expand export markets in recent months, SMEs have utilised technology to improve business efficiency, enhance customer experience and access new platforms for e-commerce, virtual trade shows, B2B meetings and webinars among others.
For Fusionex Group managing director Jacob Isaac, businesses that have just embarked on digital transformation will evolve further in the future as their purpose for using technology will change with time.
Building on improvements in operations, he likened such progress to Fusionex Group’s own transformation over the years, noting that technology can take the driver’s seat via actionable forward-looking predictive and prescriptive analytics, which can help grow revenue.
Providing context with an overview of the local economy and global growth, Standard Chartered Bank Singapore Asia economist Jonathan Koh said that while there are expectations for strong global growth this year, the bank is maintaining a cautious outlook given the uneven nature of economic recovery across different countries.
He advised businesses to pay attention to their supply chains, as many economies are potentially bringing their supply chains or manufacturing lines back to their own countries, thus further impacting global trade.
Another area he noted is the geopolitical risk to economic recovery, where tensions between the United States and China could have economic implications via sanctions, for example.
When it comes to export performance, Koh said that the two factors supporting exports growth in Malaysia are the rebound in commodity prices and the increased semiconductor demand in the electronics sector.
Expanding to a larger perspective, Standard Chartered Bank Singapore ASA FX research head Divya Devesh (pic below) said that Asia’s export performance is likely to remain extremely robust, which should be supportive of regional currencies.
“We expect that given the strong fundamentals of the Malaysian ringgit, it will appreciate this year with a target USD-MYR at 4.10 by end-June and 4.00 by end-December, as higher commodity prices are supporting the country’s exports and the ringgit, ” he said, adding that the bank estimates the ringgit to be the most undervalued currency in Asia.
He advised, “Exporters should maintain higher than average hedge ratios on their foreign currency receivables, using the forecasted USD-MYR increase as an opportunity to hedge.”
EEA 2021 is organised by Star Media Group in partnership with Standard Chartered, with Matrade as patron. It is audited by BDO.
Those keen to apply can visit exportawards.com.my, contact Victor at firstname.lastname@example.org or call 03-7967 1388 (ext. 1657, Events Department).