Malaysia, 30 March 2021 – Malaysian small businesses made greater use of digital technologies in response to Covid-19, with 40% increasing their focus on online sales in the past 12 months. This finding comes from a new regional small business survey by global professional accounting organisation CPA Australia.
E-commerce wasn’t the only digital technology used by small business during Covid-19. Social media was also an important tool for the sector, with over 60% using it to promote their business and 55% using it to communicate with customers.
“The strong connection between technology usage and business growth and the quick returns many Malaysian businesses experience when investing in technology is no doubt helping to drive this uptake. 42% reported positive returns from their technology investment last year,” said Jimmy Lai, president of CPA Australia’s Malaysia Division.
Jimmy Lai, president of CPA Australia’s Malaysia Division.
While most Malaysian small businesses offer customers new digital and mobile payment options, 61.5% still receive 50% or more of their sales in cash, above the regional average of 46.4%.
“Small businesses may be offering limited digital and mobile payment options due to a lack of understanding about what’s available or scepticism towards these solutions. This echoes findings from CPA Australia’s 2020 Report on Business FinTech Usage Survey, that showed 31% of businesses with fewer than 50 employees identified a lack of fintech understanding among the board or senior management as a challenge to fintech adoption.
“More can be done to assure business that digital and mobile payment options can provide better customer reach, which should contribute to recovery this year,” Lai added.
Difficult financing conditions look likely to remain a concern for many Malaysian small businesses this year, with nearly 50% expecting they will face problems accessing finance. These difficulties, plus an uncertain outlook are also expected to impact the solvency of many businesses, with 32% anticipating it will be difficult to repay debts in 2021.
Covid-19 is likely to continue creating challenges for Malaysia’s small businesses. Developments such as the spike in infections at the start of the year are balanced by the vaccine roll-out and easing of restrictions. This suggest a more positive picture for 2021, which is supported by the survey results. About 70% of respondents expect their revenue to grow this year, up from 56% last year. Exporting will make an important contribution to growth, with 45% expecting revenue from overseas to grow this year.
Despite the uncertainty many businesses face, over a quarter of Malaysia’s small businesses expect to innovate this year. This is a higher result than for small businesses in Australia, Hong Kong, New Zealand, Singapore and Taiwan.
“With many small businesses having a strong focus on innovation, e-commerce, good staff and improving business strategy, we are likely to see them recover quickly from Covid-19, especially in the second half of the year. Such a focus also sets them up for long-term growth.
“However, uncertainty in the economic outlook will remain an impediment to small business recovery. The government should therefore continue to play its enhanced role in supporting this fundamental sector of Malaysia’s economy in the near term,” concluded Lai.
-Digital News Asia
