PETALING JAYA: Malaysia should not shut the door on e-commerce platforms like Temu and Pinduoduo but must ensure they play by the same rules as local businesses while strengthening the competitiveness of Malaysian SMEs, say economists.
Universiti Teknologi Mara economist Dr Mohamad Idham Md Razak said stronger regulation is more practical than an outright ban, as such platforms provide consumers and businesses with greater choice and access to competitively priced products.
“However, they should operate within a clear and level regulatory framework.
“The priority should be to ensure that all platforms, whether domestic or international, comply with Malaysian requirements on taxation, consumer protection, product safety, data protection and fair business practices.
“This would allow Malaysia to preserve the benefits of digital commerce while ensuring that local businesses compete on a more equitable basis,” he said when contacted.
He added that the 10% Low Value Goods Tax (LVGT) and the upcoming E-Commerce Bill can strengthen the regulatory framework, but their effectiveness will ultimately depend on enforcement and implementation.
“The objective should not simply be to impose additional costs on online platforms but to ensure that imported goods and locally produced goods operate under reasonably comparable rules.
“The government should also monitor whether the measures are achieving their intended purpose without unnecessarily increasing costs for consumers or creating excessive compliance burdens for legitimate businesses,” he said.
On the impact of very cheap imports on Malaysian businesses, Idham said the bigger long-term concern was whether local manufacturers and SMEs would still have the ability to invest, expand their capacity and develop their own products.
“If domestic firms compete primarily on price against extremely low-cost imports, margins can become thinner and investment in technology, skills, branding and innovation may be delayed.
“Over time, this could affect the development of local capabilities,” he said.
However, he said competition could also encourage Malaysian businesses to become more efficient and innovative.
He said these platforms were not entirely negative for SMEs, as some businesses may use them to source packaging, equipment, components, machinery, accessories or other inputs at lower costs, which can improve their businesses.
For SMEs and manufacturers to remain competitive, government support can be targeted towards technology adoption, automation, digitalisation, skills development, R&D, access to financing and market expansion.
“The goal should be to help SMEs compete successfully, rather than simply protect them from competition,” he said.
Echoing a similar view, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said an outright ban would not be the right approach as competition gave consumers more choices.
“It is about how the government manages the competition. Obviously, businesses would need to scale up and be able to compete with outside players,” he said.
He said government intervention should focus on capacity building and training to help local businesses scale up more quickly.
At the same time, foreign platforms should be required to observe the same rules and regulations as local businesses, including obligations relating to taxation, product safety, consumer protection, seller identification, refunds and prohibited goods, he said.
“This would also mean strict enforcement by the relevant authorities such as Customs Department, Domestic Trade and Consumer Affairs Ministry, MyCC and the tax authorities.”
