MALAYSIA External Trade Development Corp (Matrade) is encouraging the adoption of e-commerce among SMEs to widen their market across borders.
Matrade deputy CEO II of exporters development Sharimahton Mat Saleh says companies should tap onto Matrade’s extensive range of trade and export facilitation initiatives to go abroad.
“In line with the increasing importance of going digital, we would like to see more companies participate in our eTRADE programme.
“This monetary assistance amounting to RM5,000 comes in the form of an e-voucher and/or reimbursement that SMEs can use to defray listing and training assistance fees in an e-marketplace,” she says, adding that eTRADE is only applicable for cross border e-commerce.
The eTRADE incentive was established in 2014, ahead of the Digital Free Trade Zone (DFTZ) launch.
Even then, Matrade saw the need for companies to get on board the e-commerce train.
“Typically, companies have to grow large and build up capacity, before tackling the export market.
“However, with eTRADE, we have many first-time exporters through e-commerce and they have proven to be successful,” says Sharimahton.
For example, a traditional musical instrument maker in Terengganu exported its instruments to the US and Europe, and business picked up significantly with e-commerce.
There is also a homegrown Sarawak business that has successfully exported its ‘gula apong’ (nipah palm sugar) to Japan via the eTRADE programme – a commendable effort given Japan’s stringent regulations for imported goods.
The eTRADE voucher is recognised across a total of 16 e-marketplaces including Aladdin Street, Buy Malaysia, AVANA/Facebook and Dagang Halal.
“The eTRADE eMarketplaces have training courses that allow SMEs to learn how to optimise their product listing, build an attractive microsite, as well as take good photographs of their products.
“With digital, impression really matters – it is what you put out there and how you describe your product that make buyers click on it,” says Sharimahton.
Total eTRADE applications approved as of July 5, was 2,368, with the top sectors being prepared food, beverages, furniture, building and construction materials, as well as pharmaceutical, toiletries and cosmetics.
“E-commerce adoption among Malaysian SMEs is expected to grow 50% by 2020 from 32% in 2016, driven by the sector’s interest in online business.
“Among factors that can drive exports of SMEs through e-commerce are improved productivity, building of capabilities, larger customer base, and lower operating costs,” she adds.
To qualify for the eTRADE assistance, SMEs have to be incorporated under the Registrar of Company, Registrar of Business or Limited Liability Partnership, have a minimum 60% Malaysian ownership.
The companies should also export Made in Malaysia products or services or Malaysian brands.
To apply for the eTRADE programme or any of Matrade’s initiatives, grants, or services, SMEs can sign up to be a Matrade member, free of charge.
Additionally, SMEs will be able to use Matrade’s export readiness assessment tool which is available online at the Matrade Portal to measure their strengths and position, as well as identify areas of improvement.
Matrade also offers seminars and training to assist beginners who are keen on exporting their products or services.
For the first half of 2018, Malaysia’s total exports grew by 7% to RM482.64bil in comparison to the same corresponding period last year.
In 2017, SMEs constituted 98.5% of Malaysia’s export community, contributing 17.3% in exports or RM167.4bil, and posting a SME export growth of 7.9%.
In the same year, SMEs contributed RM435.1bil or 37.1% of the nation’s gross domestic product (GDP).
Mid-tier companies with annual revenues of RM50mil to RM500mil only made up 1% of the export community, but contributed to 30% of GDP.
Sharimahton highlights that many SMEs that follow Matrade’s programmes have grown in size, eventually joining the ranks of mid-tier companies.
“Some of these mid-tier companies are becoming anchors by way of enabling some SMEs to export through them.
“There is a lot of value-adding and spin-off effects that happen when companies export,” she says.
These mid-tier companies have also formed an association where engagements are held to understand certain export markets or provide tips and assistance to SMEs as mentors.
According to the World Trade Organisation, Malaysia ranked the 25th largest exporter in the world.
“SMEs still need a lot of help. With our structure and leverage on the connectivity of our 46 overseas offices, we believe that the importance of Matrade as the national trade promotion agency should be continued,” says Sharimahton.