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  • Malaysia's SME Statistics, and E-Commerce Readiness

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    NavindranPalasendaram
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    - There are over 1 million SMEs in Malaysia, accounting for 99.2% of total businesses. - SMEs in the services sector, which includes wholesale and retail trade, make up 90.1% of all SMEs. Close to 50% of service sector SMEs are in wholesale and retail trade. - However, only 28% of SMEs are currently involved in e-commerce, with 70% not having a website. The main barriers to e-commerce adoption are poor internet infrastructure, high costs, and security concerns.

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    Statistics of Malaysian Internet Users

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    Malaysia's SME Statistics, And E-commerce Readiness

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    - There are over 1 million SMEs in Malaysia, accounting for 99.2% of total businesses. - SMEs in the services sector, which includes wholesale and retail trade, make up 90.1% of all SMEs. Close to 50% of service sector SMEs are in wholesale and retail trade. - However, only 28% of SMEs are currently involved in e-commerce, with 70% not having a website. The main barriers to e-commerce adoption are poor internet infrastructure, high costs, and security concerns.

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    © All Rights Reserved
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    45 views6 pages

    Malaysia's SME Statistics, and E-Commerce Readiness

    Uploaded by

    NavindranPalasendaram
    - There are over 1 million SMEs in Malaysia, accounting for 99.2% of total businesses. - SMEs in the services sector, which includes wholesale and retail trade, make up 90.1% of all SMEs. Close to 50% of service sector SMEs are in wholesale and retail trade. - However, only 28% of SMEs are currently involved in e-commerce, with 70% not having a website. The main barriers to e-commerce adoption are poor internet infrastructure, high costs, and security concerns.

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    © All Rights Reserved
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    of 6

    Malaysia's SME statistics, and ecommerce readiness

    Posted by : CK Wong

    Monday, 23 December 2013

    SMEsthatarealreadydoingonlinebusinesscourtesyofwebShaper

    HowmanySMEsarethereinMalaysia?
    AccordingtoCensusReportonSMEs2011,therewasatotalof645,136SMEsoperating
    theirbusinessesinMalaysia,representing97.3%oftotalbusinessestablishments.

    AmorerecentreportquotingWayneLim,GroupCEOofMalaysiaSME,thatthetotal
    numberofSMEsinMalaysiaisestimatedtogrowto1millionin2012,accountingforup
    to99.2%oftotalbusinessestablishments.

    IfwerefertonumberofregisteredcompaniesandbusinesspublishedbySSM(Companies
    CommissionofMalaysia),therewereslightlymorethan1millioncompaniesandcloseto5
    millionbusinesses(SoleProprietorship&Partnership)registeredbytheendof2012.

    Youcanimaginethatmostofthe1millioncompaniesaresmallormediumenterprises
    whilemajorityof5millionbusinessesaremicroenterprises.Wearenotsurehowmanyof
    thosearedormantthough.

    Next,whatisthedefinitionofSMEinMalaysia?

    Readalso:InfographicofSMEandecommerceinMalaysia

    NewSMEDefinition
    Startingfrom1January2014,newSMEdefinitioninMalaysiawillrequirehighersales
    turnovertobeclassifiedassmallormediumenterprises,ascomparedtotheexisting
    definition.

    Forexample,ifyouareinservicessector,youneedtohaveonlyRM1millionannualsales
    turnovertoqualifyasmediumenterpriseaccordingtotheSMEdefinitionupto31
    December2013.HoweverwithnewSMEdefinitioninplace,RM3millionannualsales
    turnoverisrequiredtobeclassifiedasmediumenterprise.

    YoucanrefertothetablebelowonthenewdefinitionofSME(youcanalsodownloadthe
    fullguidelinehere):

    Sinceourfocushereisecommerceorretail,whatkindofenterprisefallsunderServices
    sector?

    Readalso:HowthisSMEuse3.5%rebatetomakemillionringgitsales
    viabanktransfer?

    SMEsinWholesale&Retail

    ByreferringtoSMECorporationMalaysia,Servicesectorconsistsofsubsectorssuchas
    telecommunications,privateeducation,healthcare,finance,insurance,professional&
    businessservices,wholesale&retailtrade,restaurants&accommodation.

    Ifyourefertothetablebelow,90.1%oftheSMEsareclassifiedinServicessector.

    Ournextquestionis,howmanyofthe580,985SMEsinServicessectorarewholesalers
    andretailers?

    WhileSMEAnnualReport2012/13doesnotprovidesuchbreakdown,wecanrefertoSME
    Cencus2011whichshowsthatcloseto50%oftheServicesectorsareclassifiedas
    "WholesaleandRetailTrade&RepairofMotorVehiclesandMotorcycles".

    Onanotherhand,surveyconductedbyACCCIM(TheAssociatedChineseChambersof
    Commerce&IndustryofMalaysia)indicatedthat25%ofthetotalSMEsfallsunder
    "Wholesale&Trading".

    OtherfactsyouneedtoknowaboutSMEinMalaysia
    Asexpected,mostoftheSMEestablishmentsarebasedinSelangor(19.5%)andKuala
    Lumpur(13.1%),followedbyJohor(10.7%),Perak(9.3%)andSarawak(6.8%).

    HowaboutGDPcontributionbySMEs?

    TheshareofSMEGDPtooverallGDPwas32.7%in2012andthegovernmentwantsto
    raiseitto41%byyear2020.

    AlthoughtheGDPcontributionbySMEsisimprovingyearoveryear,butisitgoodenough?
    WayneLim,GroupCEOofMalaysiaSMEhasbeenquotedasbelow:

    SMEbusinessesformaverylargepartofMalaysia'seconomy.But
    theircontributiontoGDPisstillslightlylackingcomparedwith(their
    counterparts)indevelopedcountries.

    ThatisoneofthereasonswhySMEdevelopmentprogramshavebeenintroducedtogrow
    localSMEs,withthefocusonareaslikeInnovation&TechnologyAdoption,HumanCapital
    Development,AccesstoFinancing,MarketAccess,andInfrastructure.

    ThemostnotableprogramonICTisnonotherthanGetMalaysianBusinessOnline
    (GMBO)grantworthRM1,000forSMEs.However,MalaysianCommunicationsand
    MultimediaCommission(MCMC)onlyexpectstoreach14,000approvedapplicationsby
    theendof2013,36,000shortofthegrant'starget.

    YoucanreadmoreonSMEDevelopmentProgramsin2013.
    Note:AllchartsabovearederivedfromSMEAnnualReport2012/13.

    SMEecommercereadiness
    AccordingtoarecentSMEsurvey,70%ofSMEsinMalaysiastilldonothaveawebsite.

    ACCCIM'ssurveyalsoshowsthatSMEsherearestillbondofusingconventionalmethod
    ofdoingbusinesshere,withonly28%ofthe965surveyrespondentsstatedthattheyare
    involvedinecommerce.While24%ofthemare"inplanning",therestof48%arenot
    involvedinecommerceyet.

    ACCCIMrevealsthatthemainobstaclesfacedbylocalSMEsonecommerceadoptionis
    poorInternetbandwidth(30%),followedbyexpensivecostinvolved(25%)andconcernson
    epaymentsecurity(20%).

    Fromthesurveyconcludedabove,itseemsthatimprovementsneedtobeexecutedand
    supportedbythegovernment,onlinemarketplaceplayers,andserviceproviders
    (infrastructure,webstore,payment,fulfillment).

    ItwillbegreatifSMEDevelopmentProgramsaredesignedaftergettingfeedbackfromthe
    SMEs(likesurveyabove),sothatSME'sneedsarereallybeingunderstood.

    Bythen,moreSMEsinMalaysiawillbereadyforInternetandecommerce.

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