YB LIM GUAN ENG
MINISTER OF FINANCE MALAYSIA
Launch of 1 Utama’s 1PAY E-wallet & ONESHOP E-Commerce Platform
13 SEPTEMBER 2019
1 UTAMA, BANDAR UTAMA
Yang Berbahagia Tan Sri Dato’ Teo Chiang Kok
Director of 1 Utama Shopping Centre;
Yang Berbahagia Dato’ Ng Wan Peng
Malaysia Digital Economy Corporation Chief Operating Officer;
Mr Ganesh Kumar Bangah
National ICT Association of Malaysia Chairman;
Members of the media;
Ladies and gentlemen.
Good afternoon and Salam Harapan
Thank you for inviting me to the launch here this morning. I would like to commend 1 Utama for being the first Malaysian shopping centre to launch their very own E-wallet and online shopping platform. The new 1PAY and ONESHOP services are in line with our nation’s 10-year plan of migrating Malaysia into e-payments and becoming a cashless society, with the support of a strong domestic retail industry.
THE MALAYSIAN RETAIL INDUSTRY LANDSCAPE
The outlook for shopping centres and the retail industry as a whole is favourable for this year, thanks to expectations-beating GDP growth. And the records show the sector has been growing sustainably this year. Data from the Department of Statistics show sales value of wholesale and retail trade for July 2019 rose 5.7% to RM112.5 billion from RM106.5 billion a year ago.
The overall 5.7% growth was driven by expansion of retail sales, which grew by 7.1% in July 2019 to RM46.2 billion from RM43.4 billion a year ago. Meanwhile, retail sales for the January-July 2019 period increased by 7.9% to RM308.5 billion, from RM285.8 billion during the same period a year ago.
Meanwhile, the Malaysian Shopping Malls Association forecasts a 4.5% growth for the retail industry for the whole of 2019.
Amid this growth, the retail sector is not about e-commerce versus physical stores anymore. It is now about having a combination of both online and offline retail solutions, and it may even involve online-to-offline strategy to deliver Malaysians with the best shopping experience.
EMBRACING IR 4.0 AND DIGITALISATION IN PAYMENTS SYSTEM
The Industrial Revolution 4.0 (IR 4.0) is creating massive digital shifts globally at unprecedented speed and we need to ensure that Malaysia continues to be able to compete with these developments. Either we adapt to changes brought upon by IR 4.0 or else risk being unprepared and be left behind. Given that the International Data Corporation (IDC) predicts that by 2022, over 21% of Malaysia's GDP will be digitalised against the current level of 18%, this a matter that Malaysian businesses need to prepare for today.
With Malaysia Digital Economy Corporation (MDEC) leading the country’s digital economy, the national E-Commerce sector gross value-added grew by 14.3% to RM85.8 billion in 2017 from RM75 billion in 2016, with E-Commerce of non-ICT industries being the main contributor at RM68.9 billion
Digitization, competition and innovation have led Malaysia to significantly transform payment systems over the years. According to Bank Negara Malaysia’s Financial Sector Blueprint for 2011 to 2020, we can gain about 1% cost savings to Malaysia’s GDP annually by switching fully from paper-based payments to epayments processes. This is at a time where mobile payment transaction volume had increased twenty-fold to over 34 million transactions in 2018 from just below 2 million transactions in 2017; and e-payment transactions have almost tripled to 125 transactions per capita in 2018. With the high penetration of online and mobile banking, electronic cards, and E-wallets, Malaysia is on track to achieve greater economic efficiency through cashless transaction.
Increasing the adoption of e-payments and e-commerce would allow consumers to experience fast, smoother, and cheaper cost of transactions. Corporates and businesses are able to enjoy greater convenience and higher operational efficiency from faster payment processes and receipts of funds. There are also significant opportunities for brand recognition and revenue generation for companies who are able to penetrate the digital market. For the economy as a whole, it is able to be more inclusive, broad-based and sustainable to also include the under-served segment. The transition to a cashless economy is also hoped to reduce the possibility for corruption and tax avoidance.
In 2018, e-commerce sales figures was valued at USD2.4 billion in Malaysia. Under the stewardship and guidance of the Malaysia Digital Economy Corporation (MDEC), Malaysia’s digital industry has attracted investments surpassing RM320 billion in 2018 and growing the domestic ICT industry to be worth over RM40 billion. We must fully leverage on our infrastructures such as the Digital Free Trade Zone (DFTZ), which is the world’s first such zone outside China, to boost cross-border trade and position Malaysia as a transhipment hub for e-commerce logistics in further growing the industry.
The DFTZ functions as a one-stop service centre that includes an efulfilment hub to help with exporting, a satellite service hub that offers services relevant to cross-border trade like financing, as well as an eService platform to smooth cross-border cargo clearance. Participants of DFTZ enjoy MSC status, where they would get a 10- year corporate income tax holiday under pioneer status, and a 5-year investment tax allowance. So far, approximately 5,000 SMEs are on board and we would like more to come in to enrich Malaysia’s ecommerce ecosystem.
In order for our digital ecosystem to flourish, all stakeholders need to work together. Public private partnership (PPP) between the public sector and private sector is crucial in developing innovative products and services, and continue educating consumers about the corresponding benefits.
To encourage this initiative, the Government has introduced several measures under Budget 2019 to catalyse the domestic digitalisation process among businesses. This includes providing up to RM27,000 income tax incentives, and financing of RM3 billion via the Industry Digitalisation Transformation Fund managed by Bank Pembangunan Malaysia Berhad to accelerate adoption of new IR 4.0 technology including artificial intelligence, automation, and big data by Malaysian companies.
On this note, I am encouraged that 1 Utama is paving the way for the shift towards e-payments in the retail industry with their newest e-wallet and e-commerce platform. We hope to see more retailers embracing this shift so that more Malaysians can enjoy an easier, secure and reliable payment method besides cash transactions.