Healthy E-commerce Surge to Lower Costs of Living
To be attributed to Hoseok Kim, CEO of 11street
The announcement of Budget 2017 by Prime Minister Datuk Seri Najib Tun Razak today has come amidst a time where Malaysians, especially those in the Bottom 40% (B40) and Middle 40% (M40), are trying to cope with rising costs of living. On that note, with our fair market understanding, 11street as one of the largest online marketplaces in Malaysia welcomes the five principles to grow the country’s Gross Domestic Product to anywhere between 4% to 5% in the coming year.
With a revitalised allocation of RM100 billion towards the eUsahawan and eRezeki programmes under the purview of Malaysian Digital Economy Corporation (MDEC), the country is introduced to a new agenda – the Startup and SME Promotion Year. Supported by the newly-announced Digital Connectivity initiative, 2017 is poised to be the Year of Internet Economy, especially as a premise to help Small and Medium-sized Enterprises (SME) play a larger role in growing the country’s Gross Domestic Product.
In fact, many SMEs have ascended to the role as we start to see a trend of them transitioning from a brick-and-mortar business module to one that is omni-channel in nature; specifically, a strategy to put their businesses online in a nod towards e-commerce. This motion will continue and to be further fueled by several initiatives under the Malaysian Digital Economy Corporation (MDEC), which were also outlined as part of the country’s Internet Economy agenda – a move we see that will possibly help to tackle issues of increasing prices, especially for domestic products.
In addition, through focused interventions, such as the National e-Commerce Strategic Roadmap Overview that aims to accelerate the adoption of e-commerce by brick-and-mortar sellers, SMEs can potentially double its growth beyond 11%[i]. From a micro standpoint, SMEs who want to embark on an e-commerce journey ought to equip themselves with in-depth knowledge of online selling either through research or signing up for an e-commerce certification programme.
Furthermore, over the years, e-commerce has matured from the purchase of big ticket items to smaller ones such as household products and even groceries. Despite the increased subsidy of almost RM10 billion, Malaysians ought to still be resourceful and find other means to help stretch their ringgits. As such, with today’s Budget 2017 announcement focused on Public Happiness, 11street believes that the budget proposal will enable Malaysians to lower their overall costs of living through e-commerce, for very logical reasons.
The first is the variety of products consumers can conveniently purchase online, therefore minimising external cost factors such as petrol, toll and parking. Secondly, with e-commerce becoming more popular among technologically-savvy consumers, SMEs and individual sellers can buy in bulk and resell them at significantly lower prices. In the long run, these two factors will form the backbone of smart consumerism and eventually change the landscape to one where online shopping is the de facto cost saving.
In conclusion, 11street lauds the government’s resolution to evolve e-commerce in Malaysia as this will facilitate better household budget managements among consumers. To support the government’s initiatives for Budget 2017, 11street has recently introduced Fresh, Chilled and Frozen product category to offer items such as vegetables, fish and dairies at affordable price to ease the burden of rising cost of living.