FedEx research shows more Malaysian SMEs adopting new technologies

• An average of 88% of Malaysian SMEs are adopting digital economy platforms
• 69% of Malaysian SMEs have incorporated Industry 4.0 technologies into their operations

A RECENT FedEx-commissioned study on trends being adopted by small and medium-size enterprises (SMEs) in Asia Pacific (Apac) has revealed a high adoption of new technologies among Malaysian SMEs, ranking fourth among nine surveyed APAC countries in digital platform implementation and third in adopting Industry 4.0 technologies.

Entitled “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, the research revealed that an average of 88% of Malaysian SMEs are adopting digital economy platforms such as e-commerce, mobile-commerce and social-commerce platforms. 

Also, 61% of Malaysian SMEs are optimistic that these platforms will help contribute to increased revenue growth in the next 12 months. 

The study also found that 69% of Malaysian SMEs have incorporated Industry 4.0 technologies into their operations such as mobile payments, automation software and big data / analytics in particular.

 “SMEs form the backbone of Malaysia’s economy so it is encouraging to see that SMEs have taken the initiative to grow their business through the adoption of new technologies, infrastructure-building, and expansion into international markets,” said FedEx Express Malaysia managing director S. C. Chong, at a briefing session on the research results. 

“It is critical for SMEs to take advantage of technological advancements as a catalyst to enter into new markets, improve customer service support and experience, and provide a more efficient end-to-end customer journey.”

Digital economy

In Asia Pacific, the digital economy is becoming an increasingly important driver of SME growth. 

The survey revealed that 95% of Apac SMEs have made use of digital platforms such as e-commerce (82%), mobile-commerce (72%) or social-commerce (74%) in their business operations.

The top social media platform used in Apac markets including Malaysia is Facebook, with the exception of China (WeChat) and Taiwan (LINE).

In comparison, Malaysia has an overall higher adoption rate of e-commerce (90%), mobile-commerce (87%) and social-commerce (86%) compared to other markets in Asia Pacific.  Also, 61% of Malaysian SMEs expressed confidence that the digital economy will help reduce barriers to finding global customers beyond APAC. 

This finding is strongly supported by Malaysia having 146% mobile penetration, 22 million internet users, 18 million active social media users, and seven million online shoppers, leading to Malaysia ranking 31st among the most tech-ready countries around the world. 

“By educating SMEs and raising their awareness about the advent of the digital economy, I am confident that there will be a rise in brick-and-mortar SMEs having an online presence to augment as well as be complementary to their business.

“At Lelong.my, our integrated online platform which comes with services such as e-payment solutions and digital storefronts, has allowed us to extend our reach to capture the younger generation of increasingly digital savvy customers and merchants. As an online retail platform, we continuously evolve and transform ourselves to ensure that we fully understand the consumer journey and experiences to make it a seamless, pleasant one,” said Lelong.my co-founder Richard Tan.

Industry 4.0

The research also shows a significantly high adoption rate of mobile payments among Malaysian SMEs at 90% (higher than the Apac SME average of 73%), with automation software and big data / analytics among the top Industry 4.0 technologies being used by SMEs at 84% and 77% respectively.

In addition, 78% of respondents agree that Industry 4.0 technologies have enhanced efficiencies in the supply chain and distribution channels while helping reduce challenges brought by cross-border payments.

“SMEs and Industry 4.0 are key components towards the growth of our nation as we work towards achieving a high-income economy. While technology may have lessen the gap between SMEs and larger industry players, SMEs still face various challenges in the adoption of the latest trends or tools in technology.

“Most SMEs may find that they lack sufficient finances, knowledge or workforce talent to adopt these new technologies. As such, we at SME Association of Malaysia are cognisant of the barriers to technology adoption and continues to guide, empower and support SMEs by providing strategic advice or counsel and initiating networking platforms to facilitate knowledge exchange,” said SME Association of Malaysia national deputy president Ong Chee Tat.

The independent study, entitled “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, was conducted by Harris Interactive on behalf of FedEx Express to offer insights into import and export opportunities and challenges facing SMEs. 

The results are based on interviews with 4,543 senior executives of SMEs held online and by telephone in nine markets in Asia Pacific between March and April 2018. 

The markets included in the research were: Mainland China, Hong Kong, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Vietnam. 

Interviews were split equally by market with a representative mix of company sizes: micro (1-9 full-time employees), small (10-49 full-time employees) and medium (50-249 full-time employees).  The sample size was approximately 500 respondents per market.

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