The technology (tech) sector, especially the e-commerce, eGames and animation industries, has seen impressive improvements in earnings and market access this year, bolstered by ample support from the government and established players amid a burgeoning digital culture.
Lead government agencies, associations as well as private entities have worked hand-in-hand since the start of the decade, and it was no different this year, to chart the path ahead and lay the foundations for the years to come.
PIKOM, the National ICT (Information and Communications Technology) Association of Malaysia which has rebranded itself as the National Tech Association of Malaysia, expects the Malaysian economy to turn around by mid-2020 as the government’s newly introduced initiatives and programmes begin to bear fruit.
Chairman Ganesh Kumar Bangah said the government was also directing its attention to the fourth industrial revolution (Industry 4.0) via its ICT framework – the Industry 4.0 policy Industry4WRD, robotics, analytics and artificial intelligence (AI) as enablers of the country’s future economy.
In April, speaking at an event organised by the World Bank Group in Washington, DC, Finance Minister Lim Guan Eng emphasised the importance of the Malaysian digital economy, noting it had grown nine per cent on average annually in value-added terms between 2010 to 2016, outpacing the country’s overall gross domestic product (GDP) growth.
According to the Department of Statistics Malaysia, the digital economy contributed 18.5 per cent to the national economy in 2018, translating into RM267.7 billion in revenue. The e-commerce sector, which contributed RM115.5 billion or eight per cent last year, is expected to be the key driver of the digital economy by next year, according to the Malaysia Digital Economy Corporation (MDEC).
E-Commerce
This year has certainly seen many records being broken in the e-commerce sector.
PIKOM’s E-commerce Malaysia chapter, which drove the #MYCYBERSALE series for the third year, hit a record-breaking RM500 million in sales, generated from 1,500 merchants, during the annual sales event in September. #MYCYBERSALE today is the largest revenue and income contributor to the association.
According to MDEC e-commerce director Song Hock Koon, the GDP contribution from the domestic e-commerce sub-sector is still relatively small compared to China or the United States; however, the future of e-commerce is bright as online retail sales in Malaysia are expected to grow 23 per cent a year until 2021.
Popularity of the Singles’ Day online sale event (11.11) this year was reported to be at an all-time high. Information aggregator platform iPrice Group’s analysis showed Malaysian consumer spending jumped 13 per cent on Nov 11 this year from the average spending of 2018 and 2017,
As for the 12.12 sale, cashback platform ShopBack Malaysia said Malaysia’s top three e-commerce players Lazada, Shopee, and Taobao – its merchant partners – experienced more than 800 per cent traffic growth within the first hour of the one-day online shopping craze compared to the same hour on an average day in December this year prior to the event.
ShopBack was also reported as saying that it expected to give out around RM500,000 worth of cashback to its users this year, double the amount registered during the one-day sale festival in 2018.
Meanwhile, Chinese e-commerce giant Alibaba Group said as a multicultural society with a keen interest in embracing the digital economy, Malaysia was well-positioned to help local enterprises to tap into some of the largest markets across the globe.
Its global initiatives vice president, Brian Wong, said on its part, Alibaba would continue to support Malaysian businesses and help them achieve their fullest potential during this transformative period.
Alibaba also supported the DESA project, a programme extending the reach and opportunities in the digital economy to rural communities around Malaysia.
The DESA Project – a digital economy programme – is a significant catalyst to Malaysia’s e-commerce as it enables the rural-based entrepreneur supply chain. With the support of Alibaba, Lazada, and MDEC, rural-based businesses, which include sellers of food and agriculture products, are now able to participate and benefit from the digital economy.
The project was inspired by Taobao Villages in China, where products from rural villagers banded together to learn how to sell their produce on Taobao marketplace.
The pilot project in Bentong, Pahang, will help rural producers of organic rice, raw ginger, ginger powder, soy sauce and Sempalit groundnuts to market their wares to online consumers across Malaysia and new markets around the world.
Animation
During the year, Malaysia’s animation industry became a sector to watch, taking the lion’s share of the Malaysian box office receipts among local movies.
The recent “Ejen Ali: The Movie” earned its stripes with a box office haul surpassing RM25 million in Malaysia, Singapore, and Brunei, within the first three weeks of screening.
Co-produced by Primeworks Studios and WAU Animation, the movie will make inroads to Indonesia on Jan 1 and will be available at CGV, Flix cinemas, Kota Cinema and Cinemax, said WAU Animation chief executive officer Usamah Zaid Yasin.
Earlier this year, two other computer-animated films also did very well at the local box office – “Upin & Ipin: Keris Siamang Tunggal” which collected RM26.2 million and “BoBoiBoy The Movie 2”, which raked in RM29.6 million. This dynamic duo left other Malaysian movies in the dust, grabbing more than half of the overall local film ticket collection in the first 11 months of this year.
MDEC, in its South East Asia Animation Report 2018, said the region’s animation industry was forecast to be US$404.8 billion in 2023.
Based on the study by MDEC, the country’s creative content industry, which includes film and game developers, generated RM7.4 billion in 2017, while in 2018, the animation export product value alone totalled RM146 million.
The industry has also created thousands of job opportunities. The report, released this year, said there were 100 animation companies in Malaysia while the whole national creative digital group totalled 350 companies. The country’s creative content works have been exported to 120 nations.
MDEC creative content and technologies vice president, Hasnul Hadi Samsudin, said Malaysia should not ignore the global animation market as the country could truly and collectively be a force to be reckoned with in the realm of creative content technology.
With the increasing number of outsourcing projects awarded to the region, coupled with a few notable, original local intellectual properties, Hasnul Hadi said, Southeast Asia’s creative industry looked promising and could definitely be a strong contributor to the member countries’ respective economy.
EGames
On the eGames sphere, the lead government agency in technology, MDEC, in its Southeast Asia Game Industry Initiative report, said Malaysia, Thailand and Vietnam had game companies that were able to generate between US$5 million and US$10 million revenue per year.
Meanwhile, the Communications and Multimedia Ministry has partnered with Sony Interactive Entertainment Worldwide Studios (SIE WWS) to establish the global games powerhouse’s very first Southeast Asia studio in Malaysia next year.
Its minister, Gobind Singh Deo, said the partnership was a strong recognition of Malaysia as the heart of the games industry in this region.
With this establishment, Malaysia will be working closely with SIE WWS to create more opportunities for the local and regional games industry, uplift the talent pool in Malaysia and establish a partnership with local partners.
Sony Interactive Entertainment Worldwide Studios Malaysia Sdn Bhd (SIE WWS Malaysia) will provide art and animation services as part of the SIE WWS activities, developing global exclusive titles for PlayStation platforms.
In terms of exports, Gobind said the MSC Malaysia Annual and Quarterly Industry Report reported that games exports grew by a compound annual growth rate of 118 per cent to RM681 million between 2014 and 2018.
The domestic landscape features 53 game studios, many of which are developing local games and creating intellectual properties while also nurturing talent for both local and international projects.
“There is no doubt that this industry is now a critical driver for our digital economy. More than that, it is the ‘next big thing’ that many of our youths have a keen interest in, in terms of career choices,” he said in the LEVEL UP KL 2019 closing remarks.
During the year, MDEC had organised LEVEL UP KL BIZ and the LEVEL UP KL PLAY from Nov 9 and 10, the biggest game festival in Malaysia, with the mandate to spearhead the digital economy in Malaysia of which the goal is to create a platform for gamers, public, game developers, corporate and eSports to leverage on the biggest entertainment market as key economic growth driver for the region.
All in all, be it ICT, e-commerce, eGames or animation, the years ahead would only see the Malaysian tech landscape becoming better, with fortified support from all quarters, including the lead government agencies, related associations and the general public.