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SMEs unlocking possibilities through E-commerce and new tech

21/05/2018 05:56 PM
By Joan Santani Santanasamy

KUALA LUMPUR, May 21 (Bernama) -- E-commerce has been a buzzword since the advent of the Internet, and with 77 per cent of the Malaysian population already accessing the Internet since 2016, the virtual market offers an obvious potential for small and medium enterprises (SMEs) to expand and grow their business.

This advantage has not been lost on several local SMEs to make leaps and gains in developing and launching their products through assistance from government agencies such as SME Corporation Malaysia (SME Corp. Malaysia), combined with ICT solutions.

Taking advantage of women’s propensity for fashion and comfort, Mestrae Sdn Bhd developed an interchangeable heel for shoes that raked in RM33,000 in sales following the completion of their product prototype.

The heel, which can be converted into flats of various shapes and colours, is targeted at urban working women.

“I personally experienced a lot of pain while wearing heels. The curiosity to find a solution was what led to developing the product,” said Mestrae executive director, Christine Pamela Chandrakasan.

Since entering the market in November 2016, Christine said their customer base had expanded from Malaysia to Singapore, the Philippines and Thailand in South-East Asia and even further to Australia, the United Kingdom, United States, as well as Switzerland.

Mestrae was able to access a wide client base, surpassing geographical boundaries largely from setting up a website and promoting their product on social networking sites such as Facebook and Instagram.

"Our initial effort was to set up an e-commerce website and carry out online promotions due to a limited marketing budget. We were pleasantly surprised when it went viral and sales started coming in by the volume through the website,” said Christine.

Coming from an engineering background, she said SME Corp. Malaysia assisted greatly through funding, entrepreneurial skills training and trade networking opportunities to grow the business.

Mestrae is currently catering to a large demand from the European and US markets. They are collaborating with online shopping platform Shopee and will soon be partnering Amazon to expand their e-commerce options.

For Lim Chee Hwa, who is the managing director of One Team Networks Sdn Bhd, receiving a grant from the government helped to turn his idea into a pioneering system to get rid of mosquitos.

Lim’s product is known as the AedesTech Mosquito Home System (A-MHS), which is a “lure & kill technology” to eliminate mosquitos in all its developmental stages, from egg to adult insect.

The product has since been exhibited at several roadshows and trade missions, both domestic and abroad. Lim attributes this to being a recipient of the Market Development Grant from the Malaysia External Trade Development Corporation (MATRADE).

"That is how we were able to introduce A-MHS to the world market. We also reached an important milestone in 2015 when we received a 'Concept to Commercialisation Gap Fund’ grant from PlaTCOM Ventures Sdn Bhd,” said Lim.

PlaTCOM Ventures, a wholly-owned subsidiary company of the National Innovation Agency of Malaysia (AIM), is the country’s national technology commercialisation platform formed in collaboration with SME Corp. Malaysia under one of the six High Impact Programmes (HIPs) in the SME Masterplan 2012-2020.

Lim also accredited the materialisation of his idea to the generous efforts of homegrown talents in the research and development (R&D) field in local universities.

Currently, Lim is collaborating with experts at the Institute for Medical Research, Universiti Kebangsaan Malaysia, Universiti Malaysia Terengganu, Universiti Putra Malaysia and University of Strathclyde, Glasgow, to explore R&D in different fields comprising entomology, chemistry, mathematical modelling and also the Internet of things (IoT) for mobile apps.

Another game changer is Eclimo Sdn Bhd, a pioneer of the nation’s first electric scooters which were commercialised in 2013.

One of the company’s earliest patrons is fast food chain Kentucky Fried Chicken (KFC) which, in a step towards embracing green technology, purchased Eclimo scooters for its delivery service.

"Eclimo stands for Eco, Life and Mobility. We founded the company based on our passion for the environment and also because we noticed a world trend that is showing more and more leaders pushing for green solutions in their policy-making,” said Eclimo managing director, Liew Chung Peng.

Despite the fact that electric vehicle (EV)-charging infrastructure is still in its infancy in the ASEAN region, Eclimo is confident there is a huge potential market for electric scooters. Liew estimates that by 2025, electric vehicles will take up 10 per cent of the region’s 11 million newly-registered vehicles annually.

As it is, Eclimo has bypassed a long-standing perceived loophole in the EV industry by successfully marketing its products without waiting for huge government expenditure in setting up EV-charging infrastructure.

"Unlike four-wheelers, our scooters can be easily charged through a power outlet,” said Liew. “This is how we were able to get our product into the market, despite the limited electric-charging infrastructure available in the country.”

Eclimo’s business was able to take off following recognition by the Malaysian Investment Development Authority (MIDA), which awarded it an R&D grant, along with pioneer status for its innovative product.

"We also obtained a commercialisation grant from the Ministry of Science, Technology and Innovation with aid from the Malaysian Technology Development Corporation (MTDC),” said Liew.

Incentives under these include tax exemptions which would give consumers the benefit of owning a locally-made EV at a lower price compared to a foreign import.

However, said Liew, the Eclimo scooter was not competitively priced as it had not attained sufficient demand to override the manufacturing costs.

The company is hoping to attract more government agencies, especially the police force and other law enforcement agencies, to consider investing in Eclimo’s electric scooters.

"We have since sold units to the Penang, Petaling Jaya and Melaka city councils among others. We believe there is an opportunity for us to capture the regional South-East Asian market once we have made further inroads into the domestic scene,” said Liew.

To ensure viability, Eclimo is also exploring the IoT to include a remote monitoring feature on its electric scooters.

"Electric vehicle maintenance is completely different from current fuel-based vehicles. Instead of having to pull apart pieces for replacement every now and then, we can measure the performance of an electric vehicle through various parameters such as voltage.

"Installing an IoT feature to aid with remote monitoring can help us overcome manpower and travel costs. This way, we can diagnose issues and provide solutions to our clients regardless of their location,” said Liew.

These stories are part of a larger fabric of the government’s initiative to create a support system for SMEs, enabling the growth of innovators who are able to compete in the international arena.

At the ASEAN Summit in Manila last November, the then prime minister proposed the establishment of the East Asia Vision Group III to monitor the impact of the revolution on the economies and outline measures to deal with the situation.

At home, the government also continues to support and encourage the early adoption of Industry 4.0 and automation by businesses.

Various tax incentives have been given, including extension of the 200 per cent Accelerated Capital Allowance (ACA) and Automation Equipment Allowance (AEA), which were previously introduced to encourage automation in the manufacturing industry.

Partner and Malaysia tax leader at Ernst & Young Tax Consultants Sdn Bhd, Amarjeet Singh, said Malaysia had a stable and mature manufacturing sector with good quality infrastructure and resources, and well- thought-out policies to help propel the country into the new era of Industry 4.0.

According to him, if the country were to successfully adapt to Industry 4.0, it would need to consider measures to further assist and encourage R&D spending, as well as enhance the capability of the workforce to innovate and apply advanced knowledge and technologies.


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