Marketing

Guide to Future Success for Malaysian SMEs

Small and medium-sized enterprises (SMEs) play a key role in fueling growth in South East Asian markets. Their significance in bolstering the economy through job creation, stimulating consumer spending, and introducing innovative products and services should not be underestimated. 

Malaysia stands out with an impressive 97.4% of total establishments that can be classified under the SME category. These businesses have not only demonstrated resilience but have also contributed to economic strength, even in the face of pandemic challenges. 

But what can enforce SMEs’ position and future effectiveness?

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Malaysia stands out with an impressive 97.4% of total establishments that can be classified under the SME category.

Post-Pandemic Challenges

The decrease was more pronounced compared to the national GDP and the GDP of non-SMEs as a whole. This can be linked to the pandemic’s influence on different economic sectors.

As the world emerges from the pandemic, SMEs in Malaysia continue to struggle with uncertainties.These challenges include inflation, supply chain disruptions, and labour shortages. The issues are still persisting through the year of 2023, making it difficult for small businesses to plan for the future.

According to William Ng, chairman of the Small and Medium Enterprises Association Malaysia (Samenta), some SMEs have opted to decline orders to avoid incurring losses for failing to deliver. Besides that, SMEs are facing various headwinds such as the war in Ukraine, lockdowns in China and rising global inflation. At the same time SME’s in Malaysia are also experiencing challenges of local sources, such as a 25% rise in minimum wage, the increase in electricity tariffs, mandatory flexible working arrangements as well as reduced working hours.



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There is a 7.3% decline in Malaysian SME’s GDP in 2020.

Source: The Edge Malaysia, 2021.

The Digitalisation Challenge of Malaysian SMEs

While embracing a digital mindset has become a norm, Malaysian SMEs have been somewhat slow in adopting digital transformation. The World Bank’s 24th Malaysia Economic Monitor highlighted that Malaysian SMEs lag behind their global counterparts in terms of productivity measures and technology adoption. Even before the pandemic, World Bank data revealed that Malaysian businesses were behind their ASEAN peers, such as Thailand, Philippines, Vietnam, and Singapore, in terms of digitisation efforts. Limited budget is one of the main reasons for adoption of the latest technologies. Critical elements of digital transformation, including legacy system upgrades, cloud migration, automation, integration, and data flow, demand investment in tools and technologies.

As most of these investments are not guaranteeing short-term return, for many SMEs it is perceived as daunting costs. Additionally, SME Corp’s data indicated that 60% of business owners were unaware of available financing options. Furthermore, only 15% of Malaysians have the advanced ICT skills required for digital transformation. Challenges related to cultural change management, talent acquisition, and resource allocation also multiply the hurdles SMEs face on their digital journey.

While Malaysian businesses experience delay with technology adoption, SMEs’ business trends worldwide are all based on digitalisation.

Bridging the Digital Divide

Accelerating digital innovation requires a shift in mindset. It includes recognising that digital transformation entails structural changes involving people, processes, and knowledge rather than mere surface adjustments. This is where the support of Solution Integrators (SI) or channel partners, backed by the right IT distributors and solutions aggregators, can deliver significant value ensuring a seamless end-to-end adoption process. 

However, several elements in this journey require consideration:

1. Evolving Cloud Environment

The wideness of the cloud landscape can be overwhelming, with frequent updates and new features. A cloud-centric Centre of Excellence (CoE) offered by SIs can help SMEs assess the most relevant features for their needs and guide them in configuring and optimising their cloud environments.

Did you know?

As of 2022, there are approximately 4 billion daily email users!

2. Pre-configured Solutions

With Malaysia’s public cloud market surpassing USD 643 million, cloud computing is a cornerstone of digital transformation. However, 77% of SMEs remain at the basic stage of this transformation. And this is where pre-built solutions can offer a quick entrance to the market and delivery of consistent results. Whether it’s advanced security practices, data protection, or backup solutions, pre-configured offerings from SIs can enhance businesses’ cloud journeys while mitigating risks.

3. Ease of Deployment

The deployment process involves multiple checkpoints with vendors and is increasing in complexity. Dashboards that manage cloud consumption, subscriptions, and generate automated reports via a unified management console can streamline integration, saving time and resources. This allows SMEs to focus on delivering unique customer value and excellence.

4. No Marketing Automation without Digitalisation

Digitalisation is an unavoidable prerequisite for the successful adoption of Marketing Automation that helps to scale up business activities. To get the most out of automation in digital marketing, organisations need to integrate automation into every part of their operations, and that requires a shift in the business owners mindset, as we already mentioned above.

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39% – is the spread of digitalisation of marketing and advertising processes among Malaysian SMEs.

Source: Research by PayPal, 2022

Embarking on business transformation is a monumental task, but the barriers to entry for digitalisation have never been lower. Malaysian SMEs are facing a life-changing opportunity to embrace a digital future and enhance their agility. The crucial first step involves identifying and collaborating with IT partners supported by the right distributors and solution producers. This strategic collaboration has the potential to open doors for SMEs, empowering them to evolve into tomorrow’s enterprises, prepared to succeed within an ever-growing digital landscape.

What's next for you?

South East Asian market is a source of multiple business opportunities. If you are developing your business in SEA and interested in generating new business contacts, talk to our team of expert marketers in South East Asia who can support you with lead generation activities and market knowledge. 

If you are the leader of digitalisation in your company, we are welcome to explore opportunities of “Lead Gen and CRM by Constant Contact”, which has a special support in onboarding teams for SEA enterprises.

struggle to success
How these SEA Companies Succeeded via Digitalisation.
Visual stories representing challenges and successes of these SEA startups. Gain insights to localised solutions tailored to the South East Asian Market.
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