Review DFTZ & other eCommerce policies, urged by Malaysian industry leaders

We compile the comments by industry leaders into categories, from the most heated cross-border & DFTZ, SME & policies, startup & talents, local vs foreign to payment & logistics.

With the forming of the new government in Malaysia, there is a new hope among local businesses for a more conducive environment with better infrastructure and policies.

We ask industry leaders who are involved directly and indirectly in e-commerce and retail, on their feedback and suggestions for the new cabinet.

Here we compile the comments into categories, from the most heated cross-border & DFTZ, SME & policies, startup & talents, local vs foreign to payment & logistics.

We hope the opinions here will be reviewed and considered by the relevant ministries in the new cabinet, to avoid the same pitfall of the previous government by ruling without listening to the people (local business in this case).

Let's hope for a better Malaysia!

Cross-border & DFTZ

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• Dato’ Liew Bin, Founder & CEO of Bagman, VP of MRCA:
• I hope for the new government to seek opinions and suggestions from the industry leaders before making any important decision like DFTZ. Without proper study and research, projects like DFTZ will tarnish the benefits of SMEs in Malaysia.

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• Liew Chew Keat, Founder of CARI:
• Our new government should study again the purpose and objective of setting up DFTZ by the previous government, with the number of jobs created by DFTZ will be outnumbered by the number of jobs eliminated from local SMI and SME.
  
  Even though globalization is unavoidable but are local SMI and SME equipped with sufficient knowledge, resources and experiences today to face huge competitions from China?
  
  The decision of setting up DFTZ with Alibaba shouldn't be made over a 15-minutes talk (as reported by the media) without any detailed study and research.

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• Ian Chua, Co-Founder & CEO of Hermo:
• I hope for DFTZ to be reviewed in order to benefit local e-tailers and SMEs. By expediting the speed of delivery, consumers get to receive foreign products in a speedy manner. This places local e-tailers in direct competition with big international players like Alibaba - which we stand no chance at all.

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• Ng Wei Kheng, Co-Founder & MD of Dasher:
• We have yet to see any implementation or policies of DFTZ that help the local SMEs, with China businesses benefiting the most via the Alibaba’s infrastructure, putting local businesses under great pressure. 
  
  Foreign imports used to enjoy an unfair competitive edge without GST (below RM500) so is the new government going to impose any tax to them post-GST and protect local businesses? Also, any policies to help local e-commerce brands and traders to grow and compete internationally will be greatly welcomed.

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• Sharon Goh, Founder of IT Comp:
• With the number of products flowing in from China to Malaysia far greater than the other way around, it does represent the cross-border initiative we are told earlier. Should the government explore and study countries with greater export opportunities for local products?
  
  Also in order to meet the cross-border trade for the SMEs, charges imposed to obtain permits or licensing (e.g. Halal, Jakim, GMP etc.) should be reduced and application process needs to be more efficient.

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• Sunny Ooi, Founder & CEO of ClickAsia:
• The national digital transformation blueprint by MDEC has laid out several great plans such as DFTZ and Internet City, but the execution needs to be revisited to ensure a larger inclusion of Malaysian companies with an agreed percentage / quota for foreign companies which has specific technologies transfer capabilities only. Above all, these projects should be conducted via open tenders instead of direct awards manner.

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• Chan Kok Long, Executive Director & Co-Founder of iPay88:
• There are a lot of uncertainties, for example, DFTZ and mega projects with China companies. However, everything should be able to sort out after 6 months and our country will start to see economic growth at a very fast pace.

Read also: What is the volume of China's direct imports to Malaysia via e-commerce?

SME & Policies

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• Ian Ho, Regional MD of Shopee:
• Like it or not, eCommerce is coming to Malaysian. The government probably needs to play a more active role in the SME education on how they should create an omni-channel solution for their business.

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• Jimmy How, Founder & CEO of Involve Asia:
• Hopefully, there will be more grants and make it easily accessible for Malaysian SMEs to conduct business and invest in their R&D.

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• Tham Keng Yew, Founder & CEO of Supplybunny:
• Government-driven incentives in adopting technology that can improve retail efficiency or profitability. Refer to Singapore's STB or IE.
  
  The growth of SMEs is essential to the growth of the nation. Hopefully, taxation & policies will be reviewed so that SMEs are allowed certain liberties during younger, non-profitable periods. The success of such should create larger, more profitable companies that will help in contributing a higher tax income for our nation.

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• Ang Kiang Nam, Founder of SOKANO:
• I hope that ridiculous subsidy policy (by eCommerce platforms) can be stopped so that both online and offline can grow healthily. I also hope for the new government to play a more proactive role by taking action against merchants who sell counterfeit products online. This is for the consumers to regain their confidence in online purchases in which will bolster the eCommerce market.

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• Tang Siew Wai, Country Head of Carousell Malaysia:
• I hope for the new cabinet to simplify the regulatory framework for SMEs and other businesses so that the cost of doing business can be reduced.

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• Wong Mei Inn, CBT Country Head of eBay Malaysia:
• In the recent few years, we have been working closely with MATRADE and MDEC, and we are excited if there is more encouragement and programs to drive the traditional SME, local manufacturers and start-ups to explore doing export and expand their businesses online.

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• CK Wong, Founder of Silver Mouse:
• Tax policies for payments to Google, Facebook and similar overseas entity should be studied thoroughly. There was a mess last year (and still is now!) with Withholding Tax on digital advertising not being addressed clearly and publicly.
  
  Local businesses are the ones who contribute tax the to the country and they shouldn't be burdened with all the uncertainties and potential threats.

Start-up & Talents

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• Sunny Ooi, Founder & CEO of ClickAsia:
• Most eCommerce startups require substantial investment, especially during the first 5 years.  Most local companies cannot match up to the industry giants which are mainly FDI or oversea VC funded.
  
  We look forward to our banking institution or specific government-linked investment companies to step in and be more proactive in an organised effort to support such initiative.  Besides funding, a specific tax incentive can also be considered like MDEC’s MSC companies programme to cater for eCommerce industry.

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• Yeoh Chen Chow, Co-Founder of Fave:
• Our wish is for the new Malaysian government to continue supporting the startup community in Malaysia through progressive policies and creating a conducive environment that will lead to new regional champions emerging from Malaysia.

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• Ian Ho, Regional MD of Shopee:
• Talent Development - To attract the brightest Malaysian talents. Keep the ones who are good from leaving the country, and attract the good ones who are already working abroad to return home. Good talents are scarce and hard to find right now.

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• Jimmy How, Founder & CEO of Involve Asia:
• On one side, make it easier to hire foreign talents. On the other side, offer higher quality and more accessible training for local talents and fresh graduates, especially in computer science, for example, programmes that encourage local graduates to understand big data, machine learning, blockchain, etc.

Local vs Foreign 

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• KH Lim, MD of Senheng:
• Foreign workers should not be allowed to work in retail, and retailers should offer better salary for local workers. This indirectly pushes retail operators to invest in technology and tools to reduce manpower. This is the reason why retail technology is outdated and non-productive now.
  
  With this in place, we will be able to achieve better productivity and competitive advantages over the region. There will be less outflow of currency every month, and we will be able to boost domestic spending within the local workers.

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• Wei Kwok Seing, Co-Founder of Lelong.my:
• This is a positive change and we hope for the new government to create fair and business-friendly policies for local SMI and retail industries. Local internet businesses must be given the same ground in order to compete with foreign entities in a fair way.

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• Sunny Ooi, Founder & CEO of ClickAsia:
• A vehicle to attract Foreign Direct Investment (FDI) that will facilitate technology transfer and investment via joint venture with local companies and NOT 100% acquisition. We firmly believe that only via this method, it will be able to position Malaysian companies with opportunities to lead in the eCommerce transformation within the SEA countries. We believe that there are good local talents, just need to be equipped with technology and know-how transfer from more advanced countries. 

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• Tham Keng Yew, Founder & CEO of Supplybunny:
• Embracing foreign talent - Merit oriented and legal means to allow employment of foreign talent - creating a two-fold effect for a talented workforce and osmosis of knowledge. 

Payment & Logistics

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• Nazroof Hakim, Founder & CEO of Billplz:
• E-money must be the dominant payment method for the New Malaysia. It is the fastest way to distribute cash subsidies, at the lowest cost possible with the highest level of transparency and accountability. Due to the sensitive nature of payments, the system should be strictly developed and managed by Malaysians.

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• Eng Sheng Guan, Co-Founder & CEO of MOLPay:
• We look forward to a regulatory framework for digital bank in order for non-bank players to have a better financial inclusion so that they can provide a variety of financial products more efficiently.

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• Ian Ho, Regional MD of Shopee:
• I hope for the logistics infrastructure to be improved within the country via Pos Malaysia and other 3PL providers to reduce the delivery time of products. Hopefully, we can improve an average time of 3 days delivery time to next day delivery or same day delivery at some point.

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• Dr Teo Bee Yap, Founder & Executive Director of Skynet:
• Tax incentive should be provided to the last mile delivery companies in order to facilitate the growth of eCommerce.