ELECTRONIC commerce is no longer just an option to consider for businesses, but rather a requirement for survival. The reach of information and communication technologies (ICT) making electronic commerce possible is causing unprecedented globalization of business and changing the landscape in which we do business, creating various obstacles and opportunities. The Malaysian Government, recognising the need for greater adoption of e-Commerce by the SME sector, as the driving force of the economy, has introduced various measures to accelerate the process.

The National ICT Month and the ‘MSC Malaysia Great ICT Sale’ held in conjunction, were among the measures introduced. In 2009 the first of the Great ICT Sales events was held between July to August in Kuala Lumpur, Penang and Johor Bahru. (Kuala Lumpur Convention Centre (July 20-21), Penang (Aug 7-9) and Johor Bahru (Aug 14-16) in 2009). The event is supported by the Ministry of Science, Technology and Innovation, Small and Medium Industries Development Corporation (Smidec), Malaysian Debt Ventures (MDV) as well as Telekom Malaysia (TM). The objectives of the campaign are to assist local SMEs in moving up the value chain by leveraging on ICT as a strategic differentiator, as well as to increase demand for local ICT products and services as part of the government’s initiatives to spur domestic consumption. It will provide MSC Malaysia status SME companies a platform to trade their products and services as well as offer non-ICT related SMEs the opportunity to leverage on locally-made digital solutions bundles for better productivity and efficiency.

Defining e-Commerce

One of the major obstacles to using electronic commerce is the lack of understanding of electronic commerce techniques and the technology needed to use it.

SMEs can gain a competitive edge by using the Internet to do market research on competitors, gather leads on new markets and to provide better customer support. They can also use an e-marketplace or use the internet to check market pricing for their product and service to compete better. Most of these activities fall under the broader definition of electronic commerce and could be termed as “e-business”.
This broad definition includes all forms of business related transactions between:
• B2C : business and consumers/customers.
• B2B : business to business, e.g., where one business deals with another.
• G2B : businesses to government, e.g. where businesses conduct transactions electronically with the government involving business licensing or other legal requirements or for sale of products or services.

SMEs and e-Commerce

Generally, SMEs are considered to be in a very good position to adopt and adapt to new technology as they are able to adapt faster than larger companies that can be slowed by bureaucracy, existing infrastructure and inflexibility of implementing changes in a larger, more diverse environment. E-commerce can offer SMEs more advantages to find new customers and suppliers, especially in markets previously thought to be out of reach international, regional and local.

With the swift globalization of markets worldwide, partially due to the widespread use of the internet, electronic commerce can give SMEs a better chance to compete in their markets. In some cases, it is or will soon become a competitive necessity for survival. The potential benefits of electronic commerce to level the playing field for SMEs, allowing them to compete better, are critical for them to understand and sort out.

Potential Gains and Benefits from e-Commerce

Electronic commerce will not benefit all economic sectors to the same degree or in the same ways. SMEs need to learn from past mistakes. They also need the chance to take full advantage of the potential of electronic commerce to help them grow and not lag behind in a business world which is, slowly but surely, being transformed by electronic commerce.

e-Commerce Applications

For Businesses, there are many processes where e-Commerce techniques might be applied for Businesses. It is important to consider the full business cycle to identify possibilities for an e-initiative to be developed. Their gains can come from two main sources:
- adding more value for customers, and
- reducing production and operational costs, hence increasing revenue
- Another benefit may be to reduce risks through diversification of customer base or product lines
Businesses may realise gains from using e-Commerce techniques in only one or many of these processes. It is important not to assume that e-Commerce need to embrace all processes. This is particularly because in many cases, SMEs will face constraints making it too costly to tackle several processes simultaneously.
Further, business processes such as “production” and “back-office,” included in the broad definition of electronic commerce, helps improve interactions with customers or suppliers, because these processes often involve frequent interactions with suppliers.

Malaysia’s Budget 2010

1. Measures to strengthen the ICT industry in the udget 2010 include:

• Expedite the implementation of High Speed Broadband (HSBB) at a total cost of RM 11.3 billion, of which RM2.4 billion is from the government and RM 8.9 billion is from Telekom Malaysia. By end of March 2010, selected areas in K.L and Selangor will benefit from the speed of 10 Mbps. These services will be extended to other selected areas nationwide between 2010 and 2012.

• Tax relief on broadband subscription fee up to RM 500 a year from 2010 to 2012.

• Civil servants can now apply for computer loans (up to ••maximum of RM 5,000) once in every 3 years.

2. Strengthening Small And Medium Enterprises

• Funds and grants totalling RM 8.8 billion will be coordinated by SME Corp.

• Allocation of RM 350 million, of which RM 200 million is for SME soft loans, RM 100 million for capacity enhancement, and the balance for branding and promotion. The interest rate on soft loans offered by SME Corp will be similar to rates offered by development finance institutions.

• Financial institutions to approve micro financing at an average of 6 days and disbursements at an average of 4 days.

3. Promoting Creative Industry

• RM 200 million Creative Industry Fund to finance activities such as film and drama productions, music, animation, advertisements and local content development.

4. Safeguarding Welfare of Students

• Offer of a netbook package, including free broadband service, to university students for RM 50 per month for 2 years.