Small town, big ambition: Perak-based Malaysian tech companies compete with global giants


  • Technology
  • Monday, 29 Jun 2020

SEA Game Mall's founder Wong Ong Hua with staff in Setiawan, Perak. — Stanley Chan/SEA Game Mall

There is an assumption that tech companies should be based out of tech hubs.

In the 1990’s the Multimedia Super Corridor (MSC) was a literal corridor between Kuala Lumpur and Negeri Sembilan, with a focus on the aptly named Cyberjaya.

With services proliferating online, however, companies are increasingly free to operate outside of the hubs, some getting their start in small towns instead.

Based in Sitiawan in Perak, a seaside town more than 200km away from Kuala Lumpur, is SEA Gamer Mall, a platform which offers digital gaming services from reload codes to activation keys.

Its chief operating officer Tommy Chieng explained that he and company founder Wong Ong Hua both grew up in Sitiawan.

“The main reason to be based in Sitiawan is that Wong is from here and dislikes city life. When he started the company, he ran the business out of a room in his home,” he said.

Once Chieng joined the company in 2010, it expanded beyond Malaysia and Singapore to the rest of South-East Asia (SEA) and the United States, localising offerings and revamping its platform to make it easier for users to make purchases.

Its platform and 24-hour live customer support are available in 10 languages, and offers payment options such as e-banking and e-wallets in local currencies, as well as PayPal which is accepted internationally.

Winning customers’ trust was also essential, prompting the company to enhance its security by working with a third-party vendor with machine learning capabilities to control fraud and account abuse, as well as offering bounties to whitehat hackers to hunt for bugs.

The company is also now seeing an increased interest from Europe and the Middle East, and despite expanding beyond SEA, Chieng said the company is sticking to its name as the brand is well known among gamers.

Its effort netted it RM386mil in revenue in 2019, which is projected to hit RM500mil this year, especially as the Covid-19 pandemic caused a spike in people playing games and purchasing in-game items.

Asked if continuing to operate out of Sitiawan was a challenge, Chieng said hiring and keeping talent was a concern, with staff previously leaving within six to nine months.

“We always try to learn and improve on how to attract local Sitiawan talents. Whichever role that we cannot hire in Sitiawan, we will try to fill the gap by hiring for our KL office, which was set up after we received our MSC status in 2014,” he said.

“The attitude is different. I noticed young people in big cities tend to have more expectations and demands in terms of salary, benefits and career progression,” he said.

“Small town young people are more contented. Because of that some don’t have the curiosity to explore and learn new things.”

'I noticed young people in big cities tend to have more expectations and demands in terms of salary, benefits, and career progression. Small town young people are more contented. Because of that, some don't have the curiousity to explore and learn new things,' says Tommy Chieng. — Stanley Chan/SEA Game Mall'I noticed young people in big cities tend to have more expectations and demands in terms of salary, benefits, and career progression. Small town young people are more contented. Because of that, some don't have the curiousity to explore and learn new things,' says Tommy Chieng. — Stanley Chan/SEA Game Mall

Staff retention has been improving since the company rolled out its 3F initiative: Fitness, food and family.

The company pays for gym and swimming pool memberships, and booking badminton courts. It also did away with complimentary snack food in the office to create a healthy environment.

Chieng said since 50% of its staff work in shifts, especially the customer service department which runs 24/7, the company rewards them with extra cash to go out with their family.

Ipoh life

Radica Software founder and CEO Thomas Yip also emphasised the importance of a good company culture, cohesive team and quality of life.

The company – which provides computer-aided design (CAD) software for engineering firms – is based out of Perak’s capital, Ipoh.

“We just believe that we have a better quality of life being based in Ipoh,” he said, pointing out that his staff doesn’t have to slog through traffic and the cost of living is more affordable.

'We just believe that we have a better quality of life being based in Ipoh,' says Radica Software founder and CEO Thomas Yip. — RONNIE CHIN/The Star'We just believe that we have a better quality of life being based in Ipoh,' says Radica Software founder and CEO Thomas Yip. — RONNIE CHIN/The Star

He also believes challenges and opportunities are the same no matter where one is based.

“In the industry that we operate in, digital tools allow us to bring people from very far away closer together,” he said.

The company has been using remote meetings with customers before the pandemic and lockdown, and its staff continues to work from home.

“Perhaps the only challenge is to convince people to break away from the stereotypical assumption that companies based outside Klang Valley are less likely to do better. We do not think there’s any difference in where we are based, especially when our customer base is global in nature,” he said.

Radica Software counts among its clients tech giants like Apple, Amazon, Siemens and Schneider Electric, as well as the United States space agency Nasa (National Aeronautics and Space Administration) and Elon Musk’s aerospace company Space X.

Radica Software's office is still headquartered in Ipoh, even though the company's clientele includes many MNCs and international firms. — Radica SoftwareRadica Software's office is still headquartered in Ipoh, even though the company's clientele includes many MNCs and international firms. — Radica Software

“We are extremely excited to be the first company in the world to have a fully Cloud-based electrical CAD software, Electra Cloud,” he said.

“Being on the Cloud allows us to innovate in ways that are normally very difficult using desktop software, including integration with other CAD vendors, sharing data, and automating processes, including custom workflows and approvals.”

As it operates in a niche market, the majority of its customers are from overseas.

But the company is still pushing to enter new markets and become more prominent in Malaysia, where it counts Petronas as a client.

“We do feel the need for localisation. Mainly because we want our users to be able to benefit from our software to the best they can and we believe that localisation in terms of language plays a part too,” he said, revealing that its services are available in English, Swedish, French, and Japanese, while supporting various global standards for schematics.

Asked if being based in Ipoh put Radica out of sight and out of mind from local tech bodies like the Malaysia Digital Economy Corporation (MDEC), Yip said it wasn’t an issue apart from taking a long drive for meetings in Klang Valley.

“On the contrary. My experiences with these organisations are excellent. They are extremely helpful and go out of their way to help local companies,” he said.

Radica Sofware participated in MDEC’s Global Acceleration and Innovation Network (GAIN) Immersion programme in the US tech hub, Silicon Valley, to expose itself to global entrepreneurship practices, international markets and industry players.

Devising a plan

Like Radica Software and SEA Gamer Mall, SNS Network was also a participant in the GAIN programme.

The company, founded in 1999, was primarily an importer of tech products such as networking hardware, computers and peripherals.

It then decided to get into the hardware game with its subsidiary brand JOI after being approached by Microsoft and Intel, separately, back in 2014.

Its chief operating officer Ko Yun Hung said the company saw an opportunity in the Malaysian market, as foreign companies were not offering devices affordable by local standards.

He pointed out that while an MNC (multinational company) could produce products cheaper due to scale, the operating and marketing costs made some shy away from thinner margins in the budget market.

“At that time, we were one of the first trying to create a local brand of hardware. Because of that we weren’t sure about the quality control requirements and local expectations. We didn’t even know which government department to approach,” he said.

Since it’s a fast-paced industry, he was also worried that if it took the company too long to get approval from bodies such as the Standard and Industrial Research Institute of Malaysia or Malaysian Communications and Multimedia Commission, the devices would become outdated by the time they hit the market.

“When we started, we had no idea what to apply from where. Thanks to guidance from tech agencies, we figured out how to get approvals quickly,” he said, adding that government assistance was essential when the company moved into producing its own devices.

SNS Network's subsidiary JOI launched its own line of notebooks in 2018, which was attended by (from left) Microsoft Asia named lead Cagatay Copuroglu, SNS Network sales and marketing director Kelvin Pah Wai Onn and COO Ko Yun Hung, as well as Intel Asia retail sales director Cekiel Danielson. — SNS NetworkSNS Network's subsidiary JOI launched its own line of notebooks in 2018, which was attended by (from left) Microsoft Asia named lead Cagatay Copuroglu, SNS Network sales and marketing director Kelvin Pah Wai Onn and COO Ko Yun Hung, as well as Intel Asia retail sales director Cekiel Danielson. — SNS Network

Being based out of Ipoh also helped keep SNS Network’s overheads lower, with staff preferring the better quality of life over higher wages offered in the capital.

Ko, an Ipoh native, said initially he faced discrimination from potential partners when revealing that the company wasn’t based in the Klang Valley. But over time the company was able to prove itself with a consistent track record.

Now JOI’s most popular products include its computers and 2-in-1 devices like tablets with detachable keyboards.

Ko said these devices were often bought by first-time users like students and those starting work.

“Big companies might not be motivated to chase smaller revenues, but it’s worth it for me,” he said.

“Every parent wants to get a computer for their child, but for a person in the B40 category, ‘affordable’ can still be a month’s pay,” he said.

'Every parent wants to get a computer for their child, but for a person in the B40 category, 'Every parent wants to get a computer for their child, but for a person in the B40 category, "affordable" can still be a month's pay,' says SNS Network chief operating officer Ko Yun Hung. — RONNIE CHIN/The Star

The business of education

Ko looked at the long game, improving IT adoption and literacy, which saw customers coming back for more products.

SNS Network’s focus on education also covered schools from kindergartens to colleges.

Ko said while schools were moving towards smart classrooms and adopting tech solutions, not many knew what they actually needed.

“Sad story is we see some schools do a fundraiser, but at the end of the day they’re not certain what to buy, and don’t know how to use them,” he said, explaining that the company had to act more as a consultant rather than just a vendor, to ensure schools spent wisely.

He recommended schools to build up slowly, upgrading their systems part by part, as they learned which solutions best suited teaching.

“Regardless of budget, they should start the journey and see where to go next or what to improve. We just give a ‘package value meal’, and tell them to go 'makan saja'. And guide them over time,” he said.

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