New ‘Online Market’ not to compete with big players, says minister
ONLINE Market, the new e-commerce shopping platform that is being developed by the Ministry of Entrepreneur Development and Cooperatives (MEDAC), is not meant to compete with other existing big players in the market, such as Lazada, Shopee and 11Street.
MEDAC Minister Datuk Seri Wan Junaidi Tuanku Jaafar (picture) said the new sales channel launched last month is expected to provide Malaysians with a more convenient experience.
He said it is not to challenge the bigger players, but will operate on a smaller scale that could bring more people — particularly smaller businesses — together onto one platform.
“If we look at SME Corp itself, there are about 600 million members.
“If everyone is connected and has the opportunity to buy and sell among themselves, that is a huge potential market to be covered,” he told reporters at the launch of the 2020 Asia Economic and Entrepreneurship Summit in Kuala Lumpur yesterday.
Wan Junaidi said his ministry plans to help these businesses connect and gain access among each other.
“There are more than 900,000 entrepreneurs across the country, but the challenge has been selling the products and finding buyers. So, this platform is aimed at bridging the gap and giving access to businesses.
“I have tasked SME Corp to study the platform now, and it is being evaluated,” Wan Junaidi said.
He also said there is no set time frame for the project’s initiation just yet.
SME Association of Malaysia president Datuk Michael Kang said small and medium enterprises (SMEs) in Malaysia are in need of such platform as the major players within the industry are currently from other countries.
He said the government and associations should come up with local aspects which include micro sectors as well.
“The platform should cover an overall industry, the ministry, informal sectors, as well as corporations. I do hope this can be rolled out quickly, so the funds and assistance given to SMEs can be used for this too,” he told The Malaysian Reserve (TMR) recently.
According to Kang, government funding should benefit SMEs, particularly due to the impact of the Covid-19 pandemic this year.
“The pandemic has caused a major slowdown and right now, SMEs are slowly picking up. The new norm is for people to shop online, but as some of the bigger platforms have certain conditions, our SMEs might not be able to get on board and they get left behind,” he said.
Kang said this is why the platform is a good idea as it will also help generate the “Buy Malaysian Product” campaign, while other local programmes can be held on it.
“The government can use the platform to look for products, and this way, start building supply chains,” he said.
Sunway University Business School economist Prof Dr Yeah Kim Leng said “Online Market” does have the potential, especially in niche products and services, if it is produced by cooperatives at competitive prices.
“For the new entrants in the already crowded online shopping space, they will have to focus on niche or underserved markets, such as fresh farm produce, aquaculture and herbal products. Although there are online fresh food deliveries that were started by entrepreneurs in selected localities during the Covid-19 Movement Control Order, they remain small and fragmented,” he told TMR.
Yeah added that the current shopping space is a highly competitive one as the big players not only have established customer bases, but deep pockets to undertake continuous improvements, innovation and integration with other services.
“Going head-to-head with well-established online shopping platforms will be tough, costly and risky.
“The government, however, can provide the required seed funding to catalyse the development of a niche platform that serves the cooperatives’ distinctive products and services, while matching the needs of local and international consumers and buyers,” he said.
For the platform to succeed, Yeah said it will require sustained entrepreneurial focus, commitment and funding.
“Hence, exploring collaboration with existing players, including the Alibaba global SME e-commerce platform, could be less costly for the government,” he said.
He added that it is definitely “a worthwhile pursuit” which is in line with the need to accelerate the country’s digitalisation drive across all sectors of the economy.
“It is a worthwhile pursuit that the government could lend the requisite support, and not assume ownership, as such undertaking is best left to the entrepreneur or technology company that has the appetite, passion, and technical and business capabilities to sustain the platform as an ongoing commercial venture,” Yeah said.
The 2020 Asia Economic and Entrepreneur Summit held yesterday brought together business and industry leaders, as well as various organisations, aiming to discuss and share on the future of Asia in this new era.
Wan Junaidi said more partnerships should be formed between the government, entrepreneurs and cooperatives to unlock investments and more opportunities in Malaysia.
“The pandemic has also shown how successful public-private partnerships can be for the country in terms of maintaining public health, for example the development of the MySejahtera app by an internationally renowned Malaysian firm called KPISoft Sdn Bhd, in collaboration with the government.
“The government must also encourage partnerships among entrepreneurs and cooperatives themselves as it is not possible for every firm to be in partnership with the government,” he said.
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