DIGITAL ECONOMY: MALAYSIA’S NEW ERA OF

SUPPORTING BUSINESSES Nik Izuddin Nik Mohd Yusof Head of GBS & Industry Development

Investment & Industry Development (IID)

31st January 2018

One of the RISING technologically developed countries among industrializing

nations in the ASEAN region, strategically located in the heart of Southeast Asia

and its modern infrastructure is designed to serve the Business Community The Economist

Malaysia is a Federal Constitutional

Monarchy

13 states and 3 federal territories

Total landmass of 330,803 square kilometers (127,720 sq mi)

MALAYSIA MALAYSIA

- Capital - Kuala Lumpur (2,793 sq km)

- Population - 31 Million (Growth 1.5% pa)

- Multilingual & Diversify Culture - English, Malay, Mandarin, Tamil,

& More Japanese, Korean, Arabic,

Tagalog & More

3

CONTINUOUSLY STRIVE FOR EXCELLENCE

3 rd Global Offshoring Destination

(A.T. Kearney Global Services Location Index™ 2017)

4 th

Protecting Investors (World Bank Doing Business 2017 Report)

5 th Most Attractive Market For Infrastructure Investment

(Global Infrastructure Investment Index 2016)

1 st

Best Country to Invest In (US News & Wharton University 2017)

3 rd Commitment To Cybersecurity

(Global Cybersecurity Index 2017)

1 st

Most Attractive Manufacturing Market For Future Relocations (Cushman & Wakefield Manufacturing Risk Index 2017)

MALAYSIA: Home to

Technologically

Innovative Firms in

Dynamic Business

Environment

> 4,000 Foreign & Local High Tech Companies in Malaysia

> RM304 Bil New Investment Generated

> 160,000 Jobs Created *as at 2016

THRIVING DIGITAL ECOSYSTEM

6

AGGRESSIVE SUPPORT FROM MALAYSIAN GOVERNMENT

WHY DIGITAL? ALL ABOUT NEW SOURCE OF GROWTH

Source: Accenture Strategy

22%

25%

Global Digital Economy Growth

17%

20%

Malaysia Digital Economy Growth

Source: Bernama

2015 2020

2015 2020

2.5%

3%

MALAYSIA’S UNIQUE VALUE PROPOSITION

MALAYSIA – ACCELERATING GROWTH IN DIGITAL AGE

What Can We Offer? What Have We Achieved?

Penetration Rate 2011 Penetration Rate 2016

Broadband 62.3% 77.9%

Mobile subscriptions 127.7%* 141.6%*

Smartphones 22.2% 64%

Social network 41.1% 67.7%

Sources: Malaysian Communications and Multimedia Commission; PwC Entertainment and Media Outlook 2016-2020; Malaysian Digital Association; We Are Social

>18 million users 60% more friends than global average

80 minutes per day 2x global average

>3.5 million users Ranked 4th in Asia Pacific, behind ID, IN & the PH

>160,000 Uber drivers by end of 2016 Achieved within 2 years

6th in Asia – Asian Digital Transformation Index 2016by EIU and Telstra

Cloud Readiness Index 2016 by Asia Cloud Computing Association 6th in Asia –

Huawei Global Connectivity Index 2017 5th in Asia –

Networked Readiness Index 2016 by WEF, INSEAD and Cornell University 6th in Asia –

*Penetration rate exceeds 100% due to multiple subscriptions

ICT Development Index 2016 by International Telecommunication Union (ITU)

6th in Asia –

5th in Asia – Bloomberg Innovation Index 2017

3rd in Asia – Taylor Wessing Global Intellectual Property Index 2016

MALAYSIA GATEWAY TO ASEAN

7th largest economy in the world

GDP up to USD2.5 trillion with average 6% growth

Over 625 million consumers from 10 countries

ASEAN market

FOREIGN COMPANIES SET UP REGIONAL HUB IN MALAYSIA TO SERVE ASEAN MARKET

FOREIGN COMPANIES PARTNERING WITH MALAYSIANS

FOR ASEAN EXPANSION

Group’s financial hub ROC for industrial

gas plants COE for aircraft engine

maintenance, repair &

overhaul

Business Service Centre

IT, finance & other

support services

Manufacturing,

sales & regional

support

functions

COE for

engineering &

construction

COE for

accounting

Innovation &

Management

hub to expand

on Merchant

services,

eMobility &

‘connected-of-

things’ offerings

Principal Hub for

Aerospace, Automation

Control & Solutions and

Performance Materials &

Technologies strategic

business units

JAPAN & MALAYSIA

INDIA & MALAYSIA

AUSTRALIA & MALAYSIA

JAPAN & MALAYSIA

JAPAN & MALAYSIA

JAPAN & MALAYSIA

AUSTRALIA & MALAYSIA

Driving Investment

Building Local Tech

Champions

Catalysing Digital

Innovation Ecosystems

Propagating Digital

Inclusivity

Attract foreign direct investments

into the country through the MSC

Malaysia status offering as well as

its robust and progressive

technology ecosystem

MSC MALAYSIA STATUS COMPANY

Knowledge Worker Unrestricted employment of foreign

knowledge worker

Infrastructure Provide world-class physical

infrastructure

IP Protection Intellectual property protection and

cyberlaws

Telco Tariff Globally competitive telecommunication

tariffs

One-Stop Agency MDEC as the one-stop agency

Identify and accelerate Malaysian

tech champions by ‘future-

proofing’ their businesses through

the development and adoption of

disruptive technologies

GAIN

SNAPSHOT OF MALAYSIAN COMPANIES STAMPING THEIR MARK GLOBALLY

Future-proofing the economy, by

building a strong digital

innovation ecosystem, as

technology change the

rules of business

MDEC DRIVE eCOMMERCE

Internet Users 158 million Digital Buyers 87 million eCommerce CAGR 37.6% from $7b (2013) - $34.5b (2018)

Source: F&S High Growth & Consolidation

Expected in Southeast Asia’s eCommerce

Market

ASEAN OPPORTUNITY

MALAYSIA OPPORTUNITY

MALAYSIA AT AN INFLECTION POINT

Growth of Malaysia’s eCommerce Market – Double by 2020

Future-proofing the economy, by

building a strong digital

innovation ecosystem, as

technology change the

rules of business

MDEC DRIVE CYBERSECURITY

MDEC CYBERSECURITY STRATEGIC

PROGRAM

Developing Critical Talent

Promoting Cybersecurity Practices

Cybersecurity as Catalyst

Move-up Solution Value

Future-proofing the economy, by

building a strong digital

innovation ecosystem, as

technology change the

rules of business

MDEC PROMOTE DIGITAL TRANSFORMATION

MICHELIN CASE STUDY

From Selling Tyres to

Selling Outcomes

Embraced digital to

create new sources of growth by launching

Michelin Solutions and

building a holistic mobility solutions. They partnered with digital companies (i.e. BDA)

and have grown from a small pilot to

800 employees and 500,000 trucks serviced.

Source: World Economic

Forum report (Jan 2016)

IoT

Future-proofing the economy, by

building a strong digital

innovation ecosystem, as

technology change the

rules of business

MDEC DRIVE DATA ECONOMY

DATA ECONOMY Creating Value from Data

Combination of Big Data Analytics

Example 1 Example 2

Future-proofing the economy, by

building a strong digital

innovation ecosystem, as

technology change the

rules of business

ASEAN DATA ANALYTICS EXCHANGE

Future-proofing the economy, by

building a strong digital

innovation ecosystem, as

technology change the

rules of business

MALAYSIA DIGITAL HUB

Future-proofing the economy, by

building a strong digital

innovation ecosystem, as

technology change the

rules of business

MYDIGITAL MAKER MOVEMENT

Future-proofing the economy, by

building a strong digital

innovation ecosystem, as

technology change the

rules of business

Towards 100% Industry Alignment:

Digital tech career centres to profile/match potential job-seekers to industry

Agile approval process for new/revised curriculum

Industry attachment/training for educators and career centres personnels

PREMIER DIGITAL TECH UNIVERSITY

Future-proofing the economy, by

building a strong digital

innovation ecosystem, as

technology change the

rules of business

DIGITAL FREE TRADE ZONE

1,972 SMEs ONBOARDED ONTO DFTZ AS OF NOV 2017

Top 5 Popular Malaysian Products

1. Food & Beverage

2. Agriculture

3. Beauty & Personal Care

4. Furniture

5. Health & Medical

Unique Malaysian products to be promoted jointly with Alibaba

1. Batik & Songket

2. Traditional health supplements, eg. Gamat

3. Wau Kite

4. Mangosteen

5. Pepper, Nutmeg Oil, etc.

Malaysian Pavillion on Alibaba.com

Buyer Traffic

SMEs ONBOARDED WITH ALIBABA.COM

• Location: Terengganu

• Products: Traditional musical

instruments (Gamelan,

Caklempong) Guitars,

Percussions

• Achieved sales of USD$ 30,000

to USA after two months

PBH MUSIC ART SOUND AND

LIGHTING SDN BHD

YAN MING RESOURCES

SDN. BHD.

• Location: Selangor

• Products: Raw clean birds’ nest

and instant drink (bottle) birds’

nest from Malaysia.

• Achieved savings of RM100k via

the VIP exchange rate on

Alibaba.com

• Location: Sabah

• Secured an order to supply 2

containers of fresh coconuts to

Poland via DFTZ worth

USD$14,000

AFIQ TRADING CO

RM 0 ONLINE SALES(BEFORE)

RM122,300 ONLINES SALES (AFTER)

RM2.4M ONLINE SALES(BEFORE)

RM10m RM57,600 ONLINES SALES (AFTER) ONLINES SALES (AFTER)

RM 0 ONLINE SALES(BEFORE)

Groom and transform the

Rakyat (Malaysians) into a

tech-savvy workforce that will

support the growth of a

digital economy

eRezeki

Groom and transform the

Rakyat (Malaysians) into a

tech-savvy workforce that will

support the growth of a

digital economy

eUsahawan

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INSIGHT ON FURTHER IMPACT IN SABAH AS AT DEC 2016/2017 – OUTREACH & TRAINING DRIVEN

26,004 TOTAL OUREACH

2017

4,765 TOTAL REGISTERED

2017

14,492 TOTAL OUREACH

2016 4,017 TOTAL REGISTERED

2016

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SUCCESS STORIES IN SABAH AS AT DEC 2016/2017 – IMPACT THE NATION

RM 800 Per month

SALES BEFORE

RM 18,291 Per month

SALES AFTER

Service (Printing & Souvenirs service)

SAKINAHTUL NABILAH , 33

Kota Kinabalu, Sabah

RM 300 Per month

SALES BEFORE

RM 2,976 Per month

SALES AFTER

Service (Repair computer service)

MUHAMMAD

ZULKARNAIN, 27

Sandakan, Sabah

RM 2,000 Per month

SALES BEFORE

RM 6,166 Per month

SALES AFTER

Health & Beauty (Healthy drink)

• Single mom with 5 children after been left by her husband.

• Started her business in 2014 from home by placing her product in retail shops and

restaurants. • She joins eUsahawan in August 2016 and

started to applied the technique learn specifically via Facebook and Instagram and her sales increase rapidly.

• Now she has regular customers that always supporting her business.

HUSMINA TAIB, 36

Sandakan, Sabah

• Wheelchair-bound. Has guillain-

barré syndrome, a rapid-onset

muscle weakness caused by

damage to the peripheral

nervous system.

• He runs his own business full-time

with his brother.

• Prior to eUsahawan, ran business

from home.

• He has since registered his

business and opened his own

store. Already opening a 2nd

store in Sandakan

• An accident in 2014 affected right

hand. Previously involved in

kitchenware supply business but

switched after accident.

• Before eU: Operated from home.

No staff and no consistent order.

• After eU: Opened new business

premises in Feb 2017. 2 staff and 5

dropship agents. Consistent

souvenir order.

• Now has customers in Johor &

Sarawak. She has also become an

eU facilitator.

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SUCCESS STORIES IN SABAH AS AT DEC 2016/2017 – IMPACT THE NATION

RM 800 Per month

SALES BEFORE

RM 5,271 Per month

SALES AFTER

Service (Printing service)

• Single from 5 sibling. • He operated his business in 2014 by

opening a printing service centre together with his friend.

• Before eUsahawan, he’s having difficulties to close the deal with

customer. • After eUsahawan, he’s more open to

talk about his business and his sales also increase simultaneously.

MOHD SAHRIL AZHAM, 28

Kota Kinabalu, Sabah

RM 10,000 Per month

SALES BEFORE

RM 21,000 Per month

SALES AFTER

Food & Beverages (Foodtruck)

RM 0 Per month

SALES BEFORE

RM 3,414 Per month

SALES AFTER

Service (T-Shirt Printing and sport equipment)

• Married and operated his business in 2017 by selling coffee drink in food-truck.

• Also use Facebook Page but since he lack of knowledge in online

marketing, he did not receive any feedback from social media medium.

• Post-eUsahawan, expanded his social media marketing which helped to increase his sales and market reach.

• Have feedback whereby his business is well known by customer in Kota

Kinabalu area.

LIEW YIN CHONG, 29 Kota Kinabalu, Sabah

MAILSON MAHAP, 42 Kota Kinabalu, Sabah

• Married with 1 children and began his

business in 2014 by selling printed T-shirt and supplying sport equipments.

• Already having 6 years of experience in business but never use online medium to promote his business.

• After eUsahawan, he expanded his social media marketing which helped to increase his sales and market

reach.

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THANK YOU

Nik Izuddin Nik Mohd Yusof Head of GBS & Industry Development

Investment & Industry Development (IID)