Prioritise local e-commerce players in giving Penjana incentives
KUALA LUMPUR, June 27 — The SME Association of Malaysia is urging the government to prioritise the disbursement of incentives under the National Economic Recovery Plan (Penjana) for local e-commerce enabler companies over foreign ones.
Its president Datuk Michael Kang Hua Keong said with the booming e-commerce market since the Movement Control Order was implemented, greater importance should be placed on local players to further drive the domestic e-commerce industry forward.
Earlier this month, Prime Minister Tan Sri Muhyiddin Yassin announced that the government would be collaborating with private companies to run a ‘Shop Malaysia Online’ campaign to encourage online shopping with promotional codes and various discount vouchers being provided through e-commerce platforms.
For this campaign that runs in August and September, the government is allocating RM70 million to be matched by e-commerce platforms.
“Although the government should be commended for this initiative, execution is vital as the scheme could, paradoxically, end up being a ‘double-edge sword’ that could also kill local e-commerce players due to the overwhelming strength of foreign ones,” Kang said.
He said local e-commerce enabler companies were not as strong as foreign e-commerce players operating in Malaysia due to the latter’s vast financial war chest, cross-border expertise and technologies.
However, he said, Malaysia also had a strong ecosystem of local enablers including a few companies that have been internationally recognised.
“Hence the ‘Shop Malaysia Online’ campaign is an opportunity for local players to catch up with these foreign e-commerce giants,” he added.
Meanwhile, Malaysian Cross-Border e-Commerce Association president Chin Chee Seong said the association did not endorse foreign e-commerce players being entitled to such incentives.
“It has come to the association’s knowledge that foreign e-commerce players have already been allocated the financial incentives prior to local industry players being engaged on this matter,” he said.
Chin said if foreign e-commerce platforms were entitled to the financial incentives, it would mean that Malaysian taxpayers were effectively funding their operations to penetrate Malaysia’s e-commerce industry even further at the expense of local players.
“By providing financial incentives to these foreign players, Malaysia is effectively subsidising foreign traders and their vast resources, including global e-commerce giants, to compete with our local small and medium enterprises.
“Should this materialise, Malaysia is shooting ourselves in the foot with this move being devastatingly counter-productive with what Penjana is trying to achieve,” he said.
Chin has recommended as the execution plan being finalised, local e-commerce industry players including associations be consulted for a pragmatic approach to ensure a “win-win” situation for both local players and Malaysian consumers.
He suggested for an approach that mirrored the success of #MYCYBERSALE, an annual national initiative managed by Malaysia’s National Tech Association in collaboration with the Malaysia Digital Economy Corporation (MDEC) which has already been successful for six years running.