When Malaysia’s exports to China get a digital spike

One man’s meat is another man’s poison the proverb holds true for people’s responses to durian. You either loathe the pulpy-creamy, sweet and stinky fruit or love it so much you strike gold by exporting it.

In May, China decided to allow imports of Malaysian whole durians. Ever since, fruit traders in China and Malaysia have been blazing a trail in the multibillion yuan durian market.

The expansion of export portfolio beyond frozen pulp and puree is what drives Leron Yee Poh Soon, the Malaysian co-founder of durian seller DKing, and his colleagues these days. They sleep just three hours a day during the harvest season.

Every day, they pick up fruits across the 66.7ha orchard located in Raub, a township within two hours’ drive to Kuala Lumpur, categorising them based on stringent selection tips, and transporting them to ports and processing plants.

Soon has jumped on the durian export bandwagon in right earnest. He picks up only premium-quality fruits known as A-level Musang King for export to China. Every fruit is tied to the tree with a cord so it does not fall and split open prematurely.

But, for a relatively small businessman like Soon, rivalling Thailand’s dominance in the durian export market is no mean feat. His approach is to team up with Alibaba Group, the Chinese e-commerce platform, which has pledged to facilitate cross-border trade for small and medium-sized enterprises (SMEs) through a variety of digital vehicles.

“Obviously Tmall and Hema Fresh [both are Alibaba’s e-commerce platforms] provide very good platforms for us to reach the farthest parts of China,” said Soon. He has inked a deal to supply one container-load of whole durians to Hema. “This is one of the fastest, most secure and stable way to be in this massive market.”

While cross-border e-commerce is old hat for Alibaba, the world’s largest online site by transaction volume, the real game-changer empowering Malaysian merchants is an initiative called electronic World Trade Platform (eWTP).

Three years after the concept was first proposed by Alibaba founder Jack Ma, eWTP sank its very first root in Malaysia, where a string of commercial facilities, from e-commerce infrastructure, logistics, financial technology to cloud computing, are being upgraded, or even revolutionised, thanks to latest technology.

Soon’s durian business, for example, stands to benefit from a much smoother customs procedure under the auspices of the eWTP.

“Alibaba representatives in Malaysia guide, assist and consult us on the entire export procedure, from meeting product requirements to . . . getting the documents prepared . . . so that we manage to hit the target at the right point at the right time,” he said.

Behind the streamlined procedures are government authorities who are looking to promote the use of digital technologies to simplify administrative processes and spur economic growth.

Malaysia Digital Economy Corp is convinced great synergy can be unleashed between eWTP and a like-minded local initiative called Digital Free Trade Zone, whose primary goals are to establish Malaysia as a regional e-commerce hub and drive exports of products or produce of Malaysian SMEs via e-commerce.

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“We have similar objectives to provide opportunities for facilitating SME exports,” said Malaysia Digital Economy Corp chief operating officer Ng Wan Peng, citing a number of joint initiatives from streamlined customs services to e-commerce training to dedicated personnel.

For instance, SMEs need to key in information only once via Alibaba’s platforms so that they are automatically linked to the system of Malaysian Customs. Such one-stop online input can shorten the entire application process from days to just minutes, she said.

But they have bigger ambitions. The wealth of data generated from the systems can help merchants better predict figures for production, marketing and sales, Ng said, so that “if we spot a switch in consumer behaviour, the merchants can plan ahead . . . and get better prepared”.

Apart from e-commerce, Alibaba is harnessing its data and computing prowess to give a digital leg-up to Malaysia’s troublesome traffic. With a hearty injection of intelligence, Alibaba Cloud and Sena Traffic Systems, a local traffic system controller, have joined forces to build a smart traffic management system in Kuala Lumpur.

The solution will constantly learn and adapt to changing traffic environments, making the traffic management system a smart learning platform and no longer just an analytics tool, said Kenny Tan, general manager of Alibaba Cloud in Malaysia.

“A six-month trial run has suggested that cloud-empowered technologies can digitally transform the traffic management infrastructure and have the potential to reduce travel time by 12 per cent,” he said.

While traffic is the easiest area to kick-start the digital makeover, benefits are not confined just to shorter commutes. Passengers also benefit from a smoother payment experience, whether they take a taxi ride or drive through highway toll stations.

Using an Alipay-like e-wallet known as Touch n Go, riders can simply scan the taxi drivers’ QR code, verify the amount to be paid, and input their PIN to complete the transaction. There is no need to install a terminal or additional hardware in cars.

Behind the service is TNG Digital, a joint venture between Malaysia-based Touch n Go and Alibaba’s financial arm Ant Financial Services Group. The start-up, which has accumulated some five million users in the country, adopts two technologies – RFID or PayDirect (adding physical cards to the e-wallets) – to have toll fares deducted directly from e-wallets.

“We leverage the local market insights of respective partners, including technology capabilities, market experience, and brands to introduce a world-class mobile platform for payments and other financial services which will directly supplement Malaysia’s efforts in accelerating the creation of a robust and secure digital payment infrastructure,” said Greta Gunawan, country business partner of Ant Financial in Malaysia.

Ant has a philosophy of “providing their know-how and best practices to local partners so that the locals can decide what works best in the country they are working in”, said TNG Digital chief financial officer Wilson Soon.

“While Malaysia’s Digital Free Trade Zone initiative is a hub to eWTP, eWTP is a channel for DFTZ to link up with the rest of the world,” said Ng. “It is a win-win situation.”

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