For illustration purpose only.

By NURUL JANNAH KAMARUDDIN

KUALA LUMPUR, Oct 2 -- E-commerce industry players want extra incentives in the Budget 2020 to help the government achieve growth of 20.8 per cent to RM170 billion next year.

The industry's value-added and contribution to Malaysia’s gross domestic product continuously improved over a seven-year period to RM85.8 billion in 2017 from RM37.7 billion in 2010, with an average annual growth rate of 12.5 per cent.

Shopback Malaysia country general manager, Eddy Han said the cashback platform hopes policymakers can provide a one-year tax exemption for small and medium enterprises (SMEs) that start online operations for the first time, to help them sustain their business by investing in training, marketing and talent.

"Extra incentives, for example, a tax relief of three years can also be considered for SMEs that sell locally produced products," he told Bernama.

He said it was also crucial to provide incentives for last-mile delivery riders, such as road tax relief, petrol subsidies and free motor maintenance, as the e-commerce industry had created an abundance of last-mile delivery jobs, especially within the logistics as well as food and beverage segment.

At the same time, the convenience brought on by the doorstep delivery service has also encouraged many to try out online shopping.

"However, due to the heavy usage of delivery vehicles, a higher maintenance cost for petrol and regular servicing as such is incurred. It can thus be challenging for riders to have a sustainable income,” he added.

Han also sees the importance of introducing special green incentives for logistics service providers who adopt eco-friendly packaging solutions, as well as e-commerce business owners, opting to engage these companies.

"The public have raised concerns of overpackaging waste in view of the progressive growth of e-commerce in the country. Materials such as bubble wraps, plastics and wrapping tapes could take hundreds of years to break down and produce toxic fumes if incinerated.

“The green incentives will help ease the operating costs brought on by green packaging and encourage logistics service providers, as well as e-commerce business owners, to adopt green solutions,” he said. 

Shopee, a leading e-commerce platform in Southeast Asia and Taiwan, has proposed to the government to allocate funding for players like it, with existing educational programmes to scale up the transfer of knowledge on e-commerce.

Regional managing director Ian Ho said in return, Shopee pledged to put its manpower support behind these programmes. 

“Through these sessions, we will focus on knowledge transfer on merchandising, packaging, marketing, shipping, security, pre, during and post-sale services, customer services.

"This will help local companies put in place the best e-commerce practices. This move is imperative to safeguard the domestic economy because if the consumer adoption rate is faster than the SME’s adoption of e-commerce, buyers may look to purchase similar products from foreign merchants instead," he explained.

Shopee is also looking forward to the establishment of policies to encourage the development of e-commerce support industries, including a vibrant third-party logistics sector, which will further improve the efficiency of the final mile delivery and cut down the waiting time of consumers from around three to five days to the next two days after making a purchase.

Another pressing issue for the industry is the payment gateway following outdated technology and limited bandwidth which causes glitches.

"As an online shopping platform, this impacts the business greatly, especially during our big campaigns like the recently-concluded 9.9 Super Shopping Day. To put this in perspective, on Sept 9, at one point in time, a total of 187,606 items were sold in a single minute. 

"Facing this downtime is very disruptive and impacts the retailers adversely. Additionally, this creates a poor consumer purchasing experience, which then hinders the adoption of e-commerce not just for consumers, but also for retailers as it distorts the supply-demand flow for online trade," Ho said.

Hence, Shopee hope the government will also invest in enhancing and upgrading the Malaysian banking infrastructure, particularly the payments systems to support online transactions.

E-commerce marketplace player and newcomer to the industry, LamboPlace, said it looked forward to investments and programmes that can help accelerate the adoption of new technology, with continued efforts placed on artificial intelligence (AI), big data, automation, and robotics among Malaysian companies.

Chief executive officer Datuk Jason Yap said the introduction of the Industry Digitalisation Transformation Fund is a timely move as local businesses begin using data in their digital transformation efforts.

During Budget 2019, RM3 billion was allocated as funding under Bank Pembangunan Malaysia Bhd.

Yap also lauded the government’s decision to reduce fixed-line broadband prices and the National Fiberisation and Connectivity Plan to boost Internet connectivity in rural areas was also appreciated.

The government has allocated RM1 billion for the NFCP to develop broadband infrastructure across the country in Budget 2019.

"We look to further allocations in this area. Rural connectivity is essential as it brings forth previously unconnected areas. Through this, we can look to uplift more entrepreneurs and build talent from a larger pool, increase rural buyers’ access to cheaper online products and in turn improve their welfare.

"The 2019 Budget recognised the aforementioned areas of discussion, and placed Malaysia on the right path to achieving a stronger e-commerce ecosystem.We look forward to assisting and being a contributor to Malaysia’s transformation in becoming a fully digitised nation," Yap said.

Billplz, a payment gateway platform, meanwhile wants the government to drive the “exit’ landscape in the country.

"If there is no incentive to acquire a young technology company, I foresee more foreigners coming and acquiring successful companies," chief executive officer Nazroof Hakim said, adding, the government should establish a fund for acquisitions.

"Malaysia has a lot of startups, but there is not enough exit support in the country. So, the capitalism cycle comprising four-tiers from employees to C-level executives, which then becomes a business owner and lastly, an investor, is not so much happening.

"After an exit happens, they can become investors, advisers or mentors to the industry," he added.

Citing an example, Nazroof said JobStreet, founded in Malaysia was acquired by Australia's SEEK Ltd and now is Southeast Asia's largest online employment company servicing 11 million job seekers.

Budget 2020 will be tabled by Finance Minister Lim Guan Eng on Oct 11.

-- BERNAMA