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E-commerce industry players want extra incentives in Budget 2020 to help the government achieve growth of 20.8 per cent to RM170 billion next year. -- Screen capture photo
E-commerce industry players want extra incentives in Budget 2020 to help the government achieve growth of 20.8 per cent to RM170 billion next year. -- Screen capture photo

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

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

Shopback Malaysia country general manager Eddy Han said the cashback platform hoped that policymakers could 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 businesses 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-made products,” he said, adding that 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, he said, the convenience made possible by doorstep delivery service had also encouraged many to try out online shopping.

“However, due to the heavy usage of delivery vehicles, they incur a higher maintenance cost for petrol and regular servicing.

“It can be challenging for riders to have a sustainable income,” he added.

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

“The public has raised concern over packaging 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 can help ease the operating costs brought on by green packaging, while encouraging logistics service providers and e-commerce business owners to adopt green solutions,” he said.

Shopee, a leading e-commerce platform in Southeast Asia and Taiwan, has proposed that funding be set aside to scale up the transfer of knowledge on the e-commerce sector.

Regional managing director Ian Ho said, in return, Shopee pledged to place its manpower in support of the programmes.

“Through these sessions, we will focus on knowledge transfer on merchandising, packaging, marketing, shipping, security, pre-, during and post-sale services, as well as 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 formation of policies to encourage the development of e-commerce support industries, including a vibrant third-party logistics sector, to further improve the efficiency of the final mile delivery and cut down the waiting time of consumers.

Another pressing issue for the industry is the payment gateway, following outdated technology and limited bandwidth that cause glitches during transaction.

“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.

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

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

Its chief executive officer, Datuk Jason Yap, said the introduction of the Industry Digitalisation Transformation Fund was a timely move as local businesses had begun using data in their digital transformation efforts.

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

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

The government allocated RM1 billion for 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 uplift more entrepreneurs and build talent from a larger pool, increase rural buyers’ access to cheaper online products and in turn improve their welfare.

“We look forward to assisting and being a contributor to Malaysia’s transformation in becoming a fully digitised nation,” Yap said.

Meanwhile, payment gateway platform Billplz’s chief executive officer Nazroof Hakim said the government should establish a fund to drive the “exit” business landscape in the country.

“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.

“I foresee more foreigners coming and acquiring successful companies if there is no incentive to acquire a young technology company,” Nazroof said.

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

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