EP’s CEO spends 24 hours in Malaysia – we catch up with him on the big market appeal for foreign merchants and why sweet and savoury isn’t a bad combination
For merchants eyeing expansion into Southeast Asia, Malaysia hasn’t always been the first choice. Why should it be?
They might not be leading the region’s e-commerce race but Malaysia certainly has the right foundation to be a strong contender. In fact, experts have predicted the country is on the cusp of an e-commerce boom thanks to rises in internet users, consumer spending and acceptance of mobile payment methods. Financial inclusion rates and smartphone penetration are far greater there than in countries like India and Indonesia so the consumer behavior speaks for itself.
Why are Malaysians such an appealing consumer play for foreign merchants?
They spend more time online on average than almost any other country in the region and 50% of the population shops online at least once a month. They are very brand savvy – nearly half of their online purchases are from foreign retailers.
What challenges have you seen in Malaysia for merchants?
Where Malaysia has lagged behind is in payments development – cash is still very much king. To put this into perspective, Singapore saw cashless transactions at 61% in 2016 and Malaysia a mere 1%. But that huge gap has spurred recent efforts to overhaul the way Malaysian consumers are transacting in their bid to become a cashless society by 2020. The government wants to see an increase in the number of electronic payments per capita from 44 in 2010 to 200 in 2020.
Since the government launched this effort there has been a spike in credit card use. What has been the contributors behind that?
This has come down to Malaysia’s improved economy and banking infrastructure, and an increase in retail and even public transport systems accepting cards at POS terminals. Credit cards are the most dominant card and that dominance looks to continue in the foreseeable future. Security has been a big issue in the past, but with the adoption of EMV standards by local financial institutions payments are more secure than ever before. At the start of this year there was an industry wide initiative to migrate from signature to PIN, so they are ahead of the US in that area.
What did you take away from your visit?
There is reaffirming optimistic economic outlook and an overall excitement about the big efforts being made to develop the country into a powerhouse in the region. It’s an exciting time for Malaysia and it appears it’s only going to get better from here.
And finally, we hear you couldn’t go past some traditional Malaysian dishes?
I have a whole new appreciation for the term fast food. In Malaysia, everything is served to you fast and you’re expected to eat fast and then be ready to eat the next dish, also fast. I tried some pretty strange sweet and savoury combinations, the thing is they worked. Rojak is a must-try: a plate of cut up fruit and other additions (mine was fried pieces of dough but sometimes it’s squid, I wasn’t game enough for that option!) and it’s covered in a bunch of brown sauce which I was told had shrimp paste in it. It was amazing. I should also add I would eat roti every day if I had the opportunity.