Malaysia open doors for SMEs to China’s booming e-commerce market
It may be a best selling brand in its category in Malaysia but chances are that Annie Choong, e-commerce international business manager for Boh Plantations Sdn Bhd has never experienced what just hit her in China during the just concluded second annual Malaysia Week held on Alibaba Group’s various online platforms.
First launched in 2018, Alibaba, in collaboration with the Ministry of International Trade and Industry (MITI) and government agencies including Malaysia Digital Economy Corporation (MDEC) and Malaysian External Trade Development Corporation (MATRADE) launched Malaysia Week to promote Malaysian goods. This year it expanded that effort by enlisting the support of China’s top key opinion leaders via its Taobao Livestreaming platform.
A sort of e-commerce meets live-streaming, the platform exploded onto China’s hot e-commerce market in 2016 with a 2018 Deloitte report forecasting the Chinese live-streaming market to be worth US$4.4 billion (RM18.38 billion) in 2018, with viewer numbers topping 456 million.
Malaysian merchants taking part in the Malaysia Week just got a taste of this power, including Choong, who is Boh Plantations e-commerce international business manager. Call it the online version of whiplash. For, in a mere 3 seconds or 3000 milliseconds, 3,000 units of Boh Tea packs were sold. Choong and Boh Tea will never know how much more they could have sold because they only brought 3,000 packs to China. “All our stock for the week is gone, in seconds,” rued Choong.
Yet Boh Tea’s caution is understandable as the brand has tried to penetrate China, the old fashion brick & mortar way, to push its The Tarik, but failed to make any inroads. “We tried for many years through the offline way but it didn’t give us the desired results,” she says adding, “In Malaysia we are 90 years old but in China we’re a startup.”
Boh Tea switched to an online strategy last year but clearly the buzz created around the just concluded one week Malaysia Week campaign has worked wonders for sales.
And that is exactly the impact both Alibaba and the Malaysian government are hoping Malaysian companies experience in their China sales push, especially our small and medium enterprises (SMEs) which have been nervous about the government opening up the Malaysian market to Chinese SMEs through the Digital Free Trade Zone (DFTZ) initiative that went live in Nov 2017. DFTZ itself is the first part of the execution of Alibaba’s eWTP (World Trade Platform) which is Jack Ma’s vision to bring the world closer together through e-Commerce.
With e-commerce thriving in China, tapping into its massive 1.3 billion e-commerce market provides Malaysian SMEs an unparalleled growth opportunity. That is the undisputed fact that came across at the just concluded Malaysia Week on Sept 22 in Shanghai, China.
At the closing event, Darrell Leiking, the Minister of International Trade and Industry, highlighted that, “Malaysia Week aims to promote Malaysian brands and products to achieve sustainable export via the Alibaba ecosystem.” Darrell points out that Malaysia Week has helped in positioning the country as a top of mind destination by showcasing more than 100 Malaysian brands ranging across more than 800 products to not only China market, but also to global markets.
Meanwhile, the chief operating officer of MDEC, Ng Wan Peng, drew similarities between the eWTP and Malaysia’s DFTZ saying that the vision of both is to help companies export using digital technology. “Alibaba has done a lot to help Malaysian SMEs improve their competency and know how to win business online. This partnership will enrich the ecosystem further,” she predicts.
Eric Jing, board member and partner of Alibaba Group and chairman of Ant Financial, also expressed his confidence. “The Alibaba Group is proud to partner with the Malaysian government and host the second edition of Malaysia Week. Since the announcement of eWTP, we have made significant progress and continue to support Malaysia’s efforts on many fronts.” He highlights the deep cooperation with the Malaysian government that has helped them create an enabling ecosystem that, “not only allows Malaysian merchants to grow their business right now, but also reap long term benefits that await them in future.”
In China, the influence of key opinion leaders or KOLs livestreaming on e-commerce platforms has become a trusted medium of promoting quality products. KOLs thorough product assessment and endorsement are viewed as immensely credible. Additionally, it has become a platform for prospective customers to request and obtain information in real-time from merchants.
Taobao Livestreaming was launched in 2016 and garnered total gross merchandise value of CNY100 billion (Chinese Yuan) [RM58.9 billion] in 2018. During Malaysia Week 2019, other than the 3,000 packs of BOH Tea ‘Teh Tarik’ sold in three seconds, other Malaysian products sold via Taobao Livestreaming were birds’ nest, baby products, durian fruit, durian products, coffee, biscuits and sweets. 80,000 bottles of bird’s nest were sold in just five minutes and, in a separate session, over CNY 5 million (RM2.9 million) in Gross Merchandise Value (GMV) of bird’s nest were sold in just 10 mins. In addition, 30,000 packs of wafer biscuits and 20,000 packs of durian pie biscuits were sold in minutes. Some of the best-selling products during the campaign include Zen’s Bird’s Nest, Old Town White Coffee, Julie’s Biscuits and durians.
The Malaysian sales achieved are testament to the power of the KOL livestreaming and promoting.
While Alibaba did not disclose the sales numbers for last year’s Malaysia week, the senior director of globalization office at Alibaba Group, Sami Wahad, said this 2019 figures definitely exceeds 2018 as well as the targets set for 2019. A number of Merchants faced unexpected demand during Malaysia Week with only limited stocks available for orders in China.
Among the 100 unique Malaysian brands and 800 products showcased during the week were BOH Tea; Japlo and Playsafe under Takaso Rubber Products Sdn Bhd and Exofruits Industry Sdn Bhd.
On penetrating the Chinese market as a foreign company, Takaso’s e-commerce manager, Mark Tee Ka Foo, shared: “The Chinese consumer is very hard to please. So we try our best and push ourselves to be better and [produce] almost perfect products for the Chinese market.”
This means extensive research and development for products in Malaysia and China. As a matter of fact, Tee believes: “Products that can be sold well in China, can be sold well anywhere.”
That’s got to be music to the ears of the Malaysian government which is urging its SMEs to be bolder and take on new markets, globally.