Photo - Dato' Yasmin Mahmood, CEO, MDEC at the Malaysian Retail Chain Association Conference 2017
National ICT agency Malaysia Digital Economy Corporation (MDEC) has intensified its call to perceive digital disruption positively - as a path to new growth - during a major gathering of the country's retail sector.
Digital innovation is sweeping across the retail landscape at a rapid rate, MDEC chief executive officer Dato' Yasmin Mahmood said to Malaysian Retail Chain Association (MRCA) members and supporters during the association's recent 2017 conference in Kuala Lumpur.
"In this digital disruption era: Like it or not, it is time to sink or swim for many retailers as they need to think of a digital transformation programme or risk being left behind," said Yasmin. "We live in a hyper connected world where artificial intelligence, robotics, data analytics and the Internet of Things (IoT) are all connected to the Internet." [See - Deep Dive into Malaysia's Digital Economy with MDEC CEO Dato' Yasmin Mahmood Part 1]
"The fact that the majority of companies in Malaysia are small medium enterprises (SME), with many focusing on the retail sector, it is very important that we future proof the retail industry," she added.
[See - Malaysia's battle plan for digital disruption: part 1 of an exclusive with MDEC's Dato' Yasmin and Disrupting the disrupters in Malaysia: part 2 of an exclusive with MDEC CEO Dato' Yasmin ]
Photo: MDEC CEO Dato Yasmin (seated - in blue jacket) with Malaysian Retail Chain Association (MRCA) members and supporters.
A sense of urgency
Citing how the Internet is all empowering, Yasmin said that the digital transformation [referred to as DX by research firm IDC] that is disrupting traditional businesses, including retailers, is forcing some to close down or shrink their business models.
"I am glad that MRCA has given all retailers a sense of urgency that digital innovation is an opportunity but also a threat if you don't embrace it," warned Yasmin. But retailers need to embrace this change early before they are disrupted.
"The world we live in now is a disruptive one, with constant innovation across all fields. We may be familiar with things like data analytics, Internet Of Things and latest technologies, but what is often not obvious is physical innovation; things like biotechnology, material sciences, quantum physics," she said. "All this innovation is made even faster and more furious due to the power of the Internet in a hyper-connected world.
"Disruption represents a world of opportunity, and also a world of threat," Yasmin said. "While Malaysian SMEs have made progress in increasing their online presence raising it from 7 percent in 2014 up to 26 percent in 2016, it is not enough."
Increasing eCommerce contribution to Malaysia's GDP
She said the Malaysian government "is serious about increasing eCommerce's contribution to the national GDP and has launched initiatives like the national eCommerce roadmap. One of the key thrusts of the initiative is to increase the number of Malaysian SMEs acting as online sellers."
Yasmin outlined that taking a business online is a journey. "One needs different kinds of capabilities and understanding. At the lowest level is getting market access through social commerce, going into Facebook, Instagram and building basic websites."
Then, SMEs will need to go to marketplaces by making their online presence more sophisticated by putting place payment gateways and back-end logistics, she said.
Finally, the final step is participating in international markets places going into real omnichannel marketplaces, Yasmin added.
However, there are many other layers and eCommerce can be therefore be quite challenging to navigate as most SMEs don't know where to start, she admitted.
How DFTZ adds opportunity to retailers
Yasmin said it was to address such major complexities that inspired the Digital Free Trade Zone (DFTZ), which was launched in March by Prime Minister Dato' Seri Najib Tun Razak together with Alibaba chairman Jack Ma, was started as a way to help not just large companies transform but also help SMEs too.
[See - Computerworld Malaysia's "Deep Dive with Jack Ma on Malaysia and the Digital Silk Road"]