The document discusses Malaysia's readiness for e-commerce and the digital economy. It finds that while most Malaysian companies have basic IT capabilities like computers and internet access, fewer than half have adopted more advanced e-commerce capabilities as of 1999-2003, such as using email, developing digital customer/supplier databases, or online ordering. The document advocates increasing Malaysian companies' IT strategies, networks, and e-commerce skills to better compete globally in the digital economy.

1. THE 2001 APEC CUSTOMS-BUSINESS DIALOGUE (ACBD)
13 – 14 AUGUST 2001, SHANGHAI, CHINA
Information Technology in Global Trade
- “Knowing You & Me, Know Where We Are!”
Presentation by:
Suhaimi Nordin
Head of Borderless Marketing
Multimedia Development Corporation

2. AGENDA
 ICT: Technology Adoption And Progression
 Global Trends And Development
- Implications for Malaysia
 ICT, E-Business And E-commerce
- Addressing Strategic Issues for Malaysia
 Is Malaysia e-Ready?, and what are the challenges?
 Public & Private Sector Initiatives
 Growing Market for E-Commerce in Malaysia
 Closing Remarks
2

3. TECHNOLOGY ADOPTION RATE
Television Electricity
(1926) (1873)
100
Radio
(1905) Telephone
Percentage of ownership
(1876)
80
VCR
(1952) Automobile
(1886)
60
PC
40 (1975)
20
Internet
(1975)
0 20 40 60 80 100 120
Years since introduction
3
Source: Network Services Executive Summit, USA

4. PROGRESSION OF TECHNOLOGY
’50s ’60s ’70s ’80s ’90s 2000 2010
Television
Cable
Black and Expanded
white programming
Color
Premium
services Internet, online,
and broadband
networks
Mainframe
Nintendo
IBM® PC
IHPC
Mini Multimedia PC
Computing
4

5. ICT ENVIRONMENT
Explosion of Transactions Information Appliances
More users, more devices, B2B e-markets
PC + Television =
Deep Computing
Web TV or Interactive TV
Intelligent Commerce
Explosion of Data Television + Internet =
Web Content, Intercasting
Business Intelligence, e-CRM
Palmtop PC + Wallet =
Rich Media
Wallet PC
New uses, new markets
Interoperability Telephone + Internet =
Flexibility, open standards Web Phone
Pervasive Access
Anytime, anywhere Internet + PC =
Next Generation Internet Internet PC or NC
Very high bandwidth, Low cost Internet + Kiosks =
Integrated voice, video, data Internet Kiosks 5

6. INTERNET ADOPTION RATE
COMPLEXITY Stages of Internet Adoption by Government and Business VALUE
TO IMPLEMENT
Publish Interact Transact Integrate Transform
Websites Use of e-mail Ability to Integration of Websites used
provides to interact handle on-line website with to transform
information with Internet transactions legacy the business
only users systems
E-Business / E-Commerce is being recognised as not just
involving the use of the Internet for e-mail and web brochures but
the use of ICTs throughout all business processes to create real,
sustainable competitive advantage. 6

7. AGENDA
 ICT: Technology Adoption And Progression
 Global Trends And Development
- Implications for Malaysia
 ICT, E-Business And E-commerce
- Addressing Strategic Issues for Malaysia
 Is Malaysia e-Ready?, and what are the challenges?
 Public & Private Sector Initiatives
 Growing Market for E-Commerce in Malaysia
 Closing Remarks
7

8. IMPLICATIONS: HOLLOWING OUT
OF MALAYSIAN BUSINESSES
Physical Economy Digital Economy Multiple Sources
„Marketplace‟ „Marketspace‟
Product Multi Products
Customisation
INFOmediaries:
e.g. Malaysian Portals, Search Engines, Communities
intermediaries Gateways, Call/Service Centers
$$$
Information Fulfillment
e.g. Malaysian Foreign/Malaysian
Consumers Consumers 8

9. IMPLICATIONS IN GLOBAL CONTEXT
1. First-mover enjoys
entrenched position as „lock-in‟
increases switching costs
2. There will winners and United Kingdom
Canada Ireland
losers in Knowledge Age Germany
United States
of America Japan
3. Government India
interventionist policies Malaysia
are needed to correct for Singapore
market imperfections
Australia
4. Capital will gravitate towards a few
„hubs‟ which have developed a critical New Zealand
mass of users and producers
E-Business may be used to circumvent non-tariff barriers and gain
access to the protected service sectors of emerging economies. 9

10. THE CULTURAL ORIGINS OF THE INTERNET DO
NOT FAVOUR DEVELOPING COUNTRIES
Digital Divide Affecting Developing Economies
 North America,
 80% of the world‟s web sites are in
with less than 5%
English, which is spoken by less than
of the world‟s
10% of the world‟s population
population, has
more computers
than the rest of the
world combined
 Only 2.4% of all
people in the world have  Southeast Asia has 8.6% of the
access to the Internet world‟s population, but only 1.8% of
the world‟s Internet users
10
Source: United Nations Development Program (UNDP)

11. THE RACE IS ON …..
• Countries around the
globe are racing to
prepare themselves for
electronic commerce and
Canada
United Kingdom
Ireland Germany
the emerging knowledge
economy.
United States Japan
of America
India • One of the defining
Singapore characteristics of the
Australia knowledge economy is
New Zealand that it is truly global.
Markets are no longer
defined by, or limited to,
national boundaries
11

12. WORLD COMPETITIVENESS SCOREBOARD
COUNTRY 2001 2000 COUNTRY 2001 2000
US 1 1 New Zealand 21 18
Singapore 2 2 Estonia 22 -
Finland 3 4 Spain 23 23
Luxembourg 4 6 Chile 24 25
Netherlands 5 3 France 25 22
Hong Kong 6 12 Japan 26 24
Ireland 7 5 Hungary 27 26
Sweden 8 14 South Korea 28 28
Canada 9 8 Malaysia 29 27
Switzerland 10 7 Greece 30 34
Australia 11 10 Brazil 31 31
Germany 12 11 Italy 32 32
Iceland 13 9 China 33 30
Austria 14 15 Portugal 34 29
Denmark 15 13 Czech Rep. 35 40
Israel 16 21 Mexico 36 33
Belgium 17 19 Slovak Rep. 37 -
Taiwan 18 20 Thailand 38 35
UK 19 16 Slovenia 39 36
Norway 20 17 Philippines 40 37
12
Source: World Economic Forum

13. AGENDA
 ICT: Technology Adoption And Progression
 Global Trends And Development
- Implications for Malaysia
 ICT, E-Business And E-commerce
- Addressing Strategic Issues for Malaysia
 Is Malaysia e-Ready?, and what are the challenges?
 Public & Private Sector Initiatives
 Growing Market for E-Commerce in Malaysia
 Closing Remarks
13

14. ICT, E-BUSINESS & E-COMMERCE
There are many definitions for E-commerce.
Examples:
“The electronic exchange of information goods,
services and payments”
but underneath the surface E-commerce is also:
…the digitization of information
...Internetworking of human ingenuity creating
a new socio-economic transformation
…propelled by BRAINS instead of BRAWN
…driven off by both technology push and
business pull
…the foundation of a new economic order
Nations need to identify clusters for industrial
development and reposition themselves to be at
the centre of the virtual marketspace… 14

15. NATIONAL E-COMMERCE COUNCIL
CHAIRMAN OF NECC
Chief Secretary
Government of Malaysia
Secretariat
MDC
Sub-Committee on Sub-Committee on
Electronic Infrastructure Trade
(MECM) (MITI)
Inter-Agency Task Force on E-Commerce (IATFEC)
15

16. NATIONAL E-COMMERCE
STRATEGIC DIRECTIONS PLAN
The broad aim of the study is:
• To understand and assess the full
potentials of e-commerce and anticipate
their various ramifications
• Recommend options for national
strategy
• Recommend programmes for developing
local capability to exploit e-commerce
for national competitiveness
Key objective:
To create an environment conducive for global
Electronic Commerce business in Malaysia. 16

17. FIVE (5) REQUIREMENTS FOR
EFFECTIVE PARTICIPATION
PRECONDITIONS FOR PARTICIPATION IN GLOBAL E-COMMERCE
GOOD BANDWIDTH
FULFILMENT SYSTEMS AND LOGISTICS
EFFICIENT AND TRUSTED PAYMENT SYSTEMS
STABLE AND SUPPORTIVE INSTITUTIONAL ENVIRONMENT
USER FRIENDLY, AFFORDABLE ACCESS DEVICES & INTERFACES
17

18. THE EIGHT PILLARS FOR
COMPETITIVENESS
QUALITY TRUSTED
IP MARKET BRAND PRODUCTS SERVICE
INNOVATION CONTENT PROTECTION DISTRIBUTION ACCESS IDENTITY & SERVICES INTERFACES
The EIGHT PILLARS FOR COMPETITIVENESS represent the core
requirements for firms to participate competitively in
Electronic Trade and the Supply Side of E-commerce
18

19. THE IDEAL ENVIRONMENT
MALAYSIAN E-COMMERCE
B Q T
I D M R U R
A U
I P I A A L S
N C S R N I &
N T I
O P T K D T
E N
O N R R E Y S
E D T
V T O I T I
P R E
A E T B D S R
R V
T N E U A E O I E F
I T C T C N D C R A
O T I C T U E V C
N I O E I C S I E
S C S
O N S T T
N S Y E
S
GOOD BANDWIDTH
EFFICIENT AND TRUSTED PAYMENT SYSTEMS
FULFILMENT SYSTEMS AND LOGISTICS
USER FRIENDLY, AFFORDABLE ACCESS DEVICES & INTERFACES
STABLE AND SUPPORTIVE INSTITUTIONAL ENVIRONMENT
19

20. AGENDA
 ICT: Technology Adoption And Progression
 Global Trends And Development
- Implications for Malaysia
 ICT, E-Business And E-commerce
- Addressing Strategic Issues for Malaysia
 Is Malaysia e-Ready?, and what are the challenges?
 Public & Private Sector Initiatives
 Growing Market for E-Commerce in Malaysia
 Closing Remarks
20

21. ICT READINESS
Readiness is the degree to which a
community is prepared to participate in
the Digital Economy.
Its is gauged by assessing a community‟s
relative advancement in the areas that are
most critical for ICT adoption and the
most important applications of ICTs.
21

22. WHY ICT READINESS ASSESSMENT?
Understanding our EC Readiness will provide
deeper perspectives on the following strategies:
• Organising our country for success in the New
Economy
• Planning for E-Business initiatives
• Aligning governance models for optimum leverage
of the Internet
• Promoting E-Business leadership
• Linking Internet and business strategies
• Helping identify opportunities for competitive
advantage
• Identifying best practices
22

23. ICT CAPABILITIES OF SMEs IN
MALAYSIA (1999 – 2003)
The level of ICT Readiness in terms of capabilities of 811 SMEs surveyed
Capabilities Possessed
1999 2000 2003
% % %
A strategy for e-commerce 16 45 66
Computers 90 90 92
Access to the Internet 55 77 82
Have electronic mail 49 76 80
Company web site 17 55 69
Web site advertising of products/services 15 50 68
Internet based order taking 7 43 67
Internet based order payment 2 32 62
Customer service via the Internet 17 47 70
Internal computer network 31 56 75
External computer network linking 9 38 68
key business partners
Computerized database of customers 49 69 78
Computerized database of suppliers 43 66 77
Computerized inventory of products 39 63 75
811 811 811
BASE: All Firms
23
Source: MSCTC

24. E-COMMERCE CAPABILITIES BY
INDUSTRY FOR SMEs (1999)
Manufacturing and Services sector are the most ready SME sectors in
terms of EC capabilities and awareness.
TOTAL TYPE OF INDUSTRY
% Construction Manufacturing Service Agriculture
% % % %
A strategy for e-commerce 16 7 22 21 8
Computers 90 85 92 93 75
Access to the Internet 55 35 62 68 38
Have electronic mail 49 24 54 66 29
Company web site 17 4 23 25 4
Web site advertising of products/services 15 2 20 21 4
Internet based order taking 7 3 11 8 0
Internet based order payment 2 2 1 4 0
Customer service via the Internet 17 4 22 23 0
Internal computer network 31 18 31 45 4
External computer network linking 9 2 8 17 0
key business partners
Computerized database of customers 49 34 54 57 42
Computerized database of suppliers 43 30 52 47 38
Computerized inventory of products 39 21 53 44 25
BASE: All Firms 811 227 225 273 24
24
Source: MSCTC 1999

25. FINDINGS – ASSESSING READINESS
• Most of the company surveyed lack the full range of
capabilities that are prerequisites for participation in the
digital economy
• Most companies posses only the basic capabilities such as
the use of (stand-alone) computers and having access to the
Internet
• Less than 50% of the companies surveyed have moved to
capabilities such as using email, developing databases of
their customers, product inventory and supplier information.
• Less than 15% of companies are engaged in selling and
purchasing via the Internet
Despite all of the above, by the year 2003, most companies
reported that they will increase their level of readiness for E-
Commerce. More than 60% of companies plan to engage in
Internet selling and purchasing.
25

26. CONSTRAINTS FACED BY
COMPANIES
Common Primary Barriers:
• High set-up costs
• Lack of technical knowledge to implement E-Commerce
• Lack of critical mass
• Inadequate legislation protecting Intellectual Property
Rights
• Lack of standards of conducting trade nation-wide and
globally
• Lack of public trust on the Internet
• Current technologies do not address security and
privacy concerns
• Insufficient customers/suppliers have Internet access
26

27. NECSDP RECOMMENDATIONS
The Study identifies 5 recommendations and 22 sub-
recommendations:
• To build critical mass
• To build trust on the web
• To attract inbound consumers
• To transform organisation in Malaysia to be
E-Commerce ready
• To establish ground rules: Policy and
regulatory framework
27

28. E-Commerce Strategic Directions:
The Recommendations
(i) Build Critical Mass
(1) Internet Penetration
- To increase the number of online users and online hosts
(2) Access Devices Penetration
- To increase the number of access devices in Malaysia
(3) Network Access and Tariffs
- To create cost effective network access for businesses and
consumers entering e-commerce
(4) Telecommunications Infrastructure
- To create an efficient telecommunication infrastructure.
28

29. Growth of Internet Subscribers in Malaysia
(1995-2005)
(‘000 million) Projected growth
7,000
An Internet penetration of 20% of 6,005
6,000 population will spur the growth of 5,525
E-Commerce in Malaysia 4,837
5,000
4,225
4,000
3,111
3,000
1,852
2,000
892
1,000 442
90 210
25
0
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05
Year (1995 – 2000)
29
Source : MECRA (TMnet, Jaring, MaxisNet, TimeNet), PIKOM, MDC, MECM

30. ACCESS DIVIDE
Northern
5%
14%
Eastern Sabah
7%
Central
56%
Southern
11% 7%
Sarawak
Concentration of Internet
users in Malaysia.
30
Source: Ministry of Energy, Communications and Multimedia / TMnet / Jaring Dec.1999)

31. E-Commerce Strategic Directions:
The Recommendations (Cont’d)
(ii) Build Trust on the Web
(5) Electronic Payment System
- Promote the use of trusted payment systems and
applications for business merchants
(6) Logistics and Fulfillment Infrastructure
- Creating a trusted and competitive logistic and fulfillment
infrastructure for e-commerce products and services
(7) Protecting Privacy
- Establish protection for personal information
(8) Security
- Maintain integrity of electronic data and protection from
infringement
(9) Awareness and Education
- Encourage promotion and training of E-Commerce
31

32. E-Commerce Strategic Directions:
The Recommendations (Cont’d)
(iii) Attracting Inbound Consumers
(10) Content Development
- Build pool of local content that meets international
standards and demands
(11) Web Hosting
- To develop web hosting capabilities as well as maximising
its usage.
(12) Global Connectivity
- Create better connection with international communities.
(13) National E-Commerce Branding
- Creating a portal for national e-commerce branding
campaign
32

33. E-Commerce Strategic Directions:
The Recommendations (Cont’d)
(iv) Organisational Transformation
(14) Creating EC Corporations
- Restructure Corporation to cut costs, improve flexibility and make
better use of technology to exploit E-Commerce
(15) Physical to Digital Value Chain
- EC requires a more dynamic and interrelated function of the
value chain.
(16) Work-culture
- Encourage an Entrepreneurial culture to make it easier to
start new business
(17) Venture Funding
- Develop Venture Capital and IPO markets to aid
innovative companies
(18) Incentives
- Government intervention needed to help to bring out the
best of the firms.
33

34. E-Commerce Strategic Directions:
The Recommendations (Cont’d)
(v) Policy and Regulatory Framework
(19) Consumer Protection
- Increase consumer confidence in transacting over the
internet
(20) Intellectual Property Management & Commercial Codes
- New intellectual property management and e-commerce
code needed and enforced.
(21) Dispute Resolution
- Amendments needed to remedy the problem of dispute
resolution in e-commerce
(22) Taxation
- Review taxation laws and tariffs to encourage businesses.
34

35. AGENDA
 ICT: Technology Adoption And Progression
 Global Trends And Development
- Implications for Malaysia
 ICT, E-Business And E-commerce
- Addressing Strategic Issues for Malaysia
 Is Malaysia e-Ready?, and what are the challenges?
 Public & Private Sector Initiatives
 Growing Market for E-Commerce in Malaysia
 Closing Remarks
35

36. MSC FLAGSHIP APPLICATIONS
Multipurpose Card
Smart Schools Electronic Government
Tele-health R&D Cluster
E-Business
Worldwide
Borderless Marketing Centre Manufacturing Web 36

37. E-GOVERNMENT APPLICATIONS
ELECTRONIC LABOUR eSERVICES
EXCHANGE
ePEROLEHAN
E-Procurement
PROJECT
MONITORING E-GOVERNMENT
SYSTEM ACCOUNTANT
GENERAL
E-GOVERNMENT
HUMAN RESOURCE
MGMT INFO. SYSTEM GENERIC OFFICE
ENVIRONMENT
37

38. SCOPE OF E-PROCUREMENT
Central Contract
Direct ELECTRONIC
Purchase Tender
PROCUREMENT
Quotation 38

39. E-PROCUREMENT PROCESSES
An on-line Government procurement process for goods and
services – linking 33,000 suppliers to 3,500 government agencies
Product Supplier PO Order Order
Requisition Selection Issuance Fulfillment Payment
• Electronic
• Electronic • Electronic • Order Tracking • Payment Match
Requisition
Catalog Submission • Delivery • Ledger Linkage
• Electronic
• Electronic • PO Acknowledgement • Electronic
Approval
Browsing Acknowledge- • Invoicing Payment
• Budgetary
ment
Control
Central Contract, Direct Purchase, Quotation and Tender
Agency Supplier Product
Management Management Management
• Agency Profile • Supplier Profile • Contract Management
Management Management • Product and catalog
• User Profile Management • User Profile Management Management
39

40. E-PROCUREMENT BENEFITS
• Building the national e-Commerce engine
• Low risk and low entry cost into e-commerce for SMEs
• More effective and efficient procurement processes
- Through better informed selection of products & services
- Online up-to-date product information and pricing
• Minimum investment cost to the Government
• Greater accountability and transparency
• Ease of monitoring suppliers‟ performance, statistics, etc.
• Centralisation of operations for suppliers
• Self-service tracking of order & delivery status
• A more skilled and knowledgeable workforce 40

41. GOVERNMENT MULTI-PURPOSE
CARD (GMPC)
NATIONAL I.D
DRIVING LICENSE
MULTI APPLICATION SMART CARD
PASPORT
MALAYSIA
E-CASH
IMMIGRATION
PUBLIC KEY
INFRASTRUCTURE
HEALTH INFORMATION 41
(Open PKI Digital Certificate)

42. PUBLIC KEY INFRASTRUCTURE
(PKI)
msc trustgate.com
www.msctrustgate.com
www.digicert.com.my
42

43. GMPC SERVICES
Transport:
Driving License
Using E-Cash for Toll charges, Bus rides,
Light Rail, ERL, Parking
Traveling:
Passport for immigration clearance
Retail:
Purchases of small items (e.g. at 7-Eleven)
Databases:
Individual information
Health Information:
Clinics
43

44. BENEFITS OF GMPC
Benefits offered - security, convenience and
efficiency:
 First in the world to have multi Government
applications and E-Cash on a single national
smart card
 Combined Government services at one-stop
centre, GSC (Government Service Centre)
 Future extension of government e-Services
over the Internet
 Common and standardised set of identification
data across different Government Agencies
preventing duplication of records
44

45. Private Sector Initiatives:
Financial: E-Banking & Security Trading
Manufacturing
Tourism
45

46. FINANCIAL SECTOR
Electronic Banking in Malaysia
1981• 1st Electronic Innovation –
Automated Teller Machines (ATM)
• Released constraint of time and geographical
location.
1990s• Telebanking
• Financial services via telecommunication
devices
1st June 2000• Malaysian Central Bank allowed local owned
commercial banks to offer Internet banking
services.
46

47. IMPORTANCE OF E-BANKING
• Costs of business transactions
Traditional Telephone Internet
System Based Based
Retail banking transaction 1.08 0.54 0.13
(US$ per transaction)
Source: OECD
The cost of doing business with traditional paper-based and
human-intensive processes continue to grow, whereas the
electronic processing of transactions can be done at the fraction
of the original cost.
• Convenience of electronic interactions
Consumer choice will be driven by the richness and depth of the
on-line service offered by the bank. The consumer wants, easy
and comprehensive banking services and self-service control.
47

48. IMPORTANCE OF E-BANKING
(Cont’d)
• New growth markets
It is becoming increasingly difficult to expand market share in
the traditional marketplaces. By shifting to Internet-driven
marketplaces, banks have a chance to redefine market shares
in the marketspace. This is an opportunity for local banks to
have global reach by opening international markets via
electronic marketplaces.
• Banks can offer wider range of services
The creation of new products specifically designed for the
on-line markets, making financial services and products
more efficient and less costly to end-users.
48

49. INTERNET BANKING BY MALAYSIAN
BANKS
• 15 June 2000 Maybank
 www.maybank2U.com
• December 2000 Hong Leong Bank EC Banking
 www.hlbb.hongleong.com.my
SBB Direct
• 1st Quarter 2001 Southern Bank Internet Banking
 www.sbbdirect.com.my
• End-2001 Alliance Bank
 www.mphh.com.my
49

50. SECURITY TRADING
The shift in the Malaysian trading paradigm:
• Renew perspective on the fundamental
role of market intermediaries
• Exchanges and clearing houses will have
to keep up with the pace of change
• Composition of investors is changing
• New breed of investors emerging
• To face reality of liberalisation
50

51. PRO’S & CON’S OF ONLINE TRADING
Benefits of Online Trading
• Savings / Efficiency / increase productivity
• Facilitate foreign investors
• Online trading allows 24 hours trade
• Opening the capital markets to more
players
• Trading will be done on multiple currency
Implications
• Capital out-flow – more difficult to manage
51

52. Efforts to develop E-Commerce in the
Malaysian Capital Market
• As at 20 November 2000, the KLSE had approved 14
stockbroking companies providing the Electronic Client
Ordering Systems (ECOS) via the Internet – The 14 companies
had approximately 8,000 ECOS-Internet clients registered with
them.
• Two (2) stockbroking companies were granted regulatory
approval to provide order-routing services through wireless
application protocols (WAP).
• As at September 2000, the Commission had granted the
investment adviser‟s license to two (2) on-line investment
advisers, surf88.com.my and MalaysiaStreet.com.my
52

53. MANUFACTURING SECTOR
Benefits of Manufacturing
Online:
• Integrate business processes
• Maximize process efficiencies
• Reduce inventory costs
• Increase time to market
• Minimize supply chain
implementation risks
• Efficient order and inventory
management
• automate the exchange of
information with multiple
business partners
53

54. Impediments of E-Commerce Implementation
in Manufacturing Industry
• Lack of knowledge and understanding of
E-Commerce
• Inadequate legislation protecting
intellectual property
• High setup cost (hardware and software)
• Lack of International standards
• High day-to-day operation cost
• Not convinced of financial and business
benefits
• Internet channel conflicts with current
sales channel.
54

55. ASPs for Online Manufacturing
Local grown Application Service Providers (ASPs) can
assist manufacturing companies to move on-line:
• Internet based order taking and payment
• Computerised databases of customers and suppliers
• Computerised inventory of products
10,000 homepages and promotes 50,000 products
Asian Manufacturers for North America Market
The earliest player in the b2b game,
It launched it services in April 1999 55

56. TOURISM INDUSTRY
Millions Tourist arrivals, 1990 - 2000
12
Between 1996 – 2000, it is estimated that
over 15% of tourist that came to Malaysia
10
obtain information about Malaysia over
the World-Wide-Web
8
6
4
2
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
56
Year

57. Benefits of Tourism Online
Benefits of Tourism Online
 Able to reach out for bigger market
 Engaging content
 Bigger participation in the tourism portal
 Introduction of multiple services such as,
hotel booking, airlines ticketing, car rental
and visits/tour packages
57

58. TOURISM INDUSTRY
1998 1999 2000
Total Tourism Revenue RM 9.5b RM 12.2b RM 17.3b
No. of Tourism Arrivals 5.55m 7.93m 10.22m
No. of Hotels 1,419 1,404 1,459
 Top generating markets in 2000 – Singapore, Thailand,
Indonesia, Japan, China, Brunei, Taiwan, UK, Australia and
the U.S
 The Ministry and Tourism Malaysia formed a Tourism for
the new economy Task Force in year 2000. Members of the
TF includes private industry players and tourism
associations.
 A Tourism portal – MalaysianTourism.com will be launch
on 15th June 2001.
58

59. ASIA TRAVEL MART
Highlight:
• AsiaTravelMart is a one-stop travel
shop for hotels, air tickets, tour
packages and other travel products
• Offers more than 60,000 products
from over 3,000 travel suppliers in
more than 100 countries
• Also, offers mobile-commerce
transactions to WAP users (world‟s
first).
• Awards, including PATA Gold 2000,
Internet World Asia Industry Award,
PIKOM Award and APMITTA Award 59

60. RELIANCE TRAVEL
Highlight:
• Reliancetravel.com provides online
retailing of tourism, travel and
hospitality products and services.
• Expected gross-sales for 1Q2001 –
RM20 million
• Provides referral program (sharing
revenue) with many local Internet
companies
• Currently offers nearly 10,000 travel-
products
• Website features, multiple currency
pricing, instant online booking 60
confirmation and travel management

61. SMEs Success Stories (RoyalSelangor.com)
Highlight:
• E-Commerce Type (B2C & B2B)
Pewter products
• Went on-line early 1999, website
build in-house
• Offer few hundred products. Price
average US$30 – US$1,500
• 70% of customers from North
America and Europe
• Awarded “Intelligent 20 Awards
2000” 61

62. SMEs Success Stories (smarttransact.com)
Highlight:
• One Stop powerhouse for E-
Commerce solutions: providing a
complete set of software,
infrastructure and services.
• Established in 1999 with 3 staff
and has grown to 130 staff
(March 2001)
• Recorded revenue of US$3
million (US$ 1 million profit) –
March 2001
• 95% of revenue came from
overseas
• Clientele spread worldwide
including Ireland, U.S and Hong
Kong
• “Internet Company of the Year” –
62
Malaysia Internet Awards 2000

63. SMEs Success Stories (watchesplanet.com)
Highlight:
• Malaysian watch e-tailer
(B2C)
Watches are Duty-Free items
• Started in 1998 with a capital
of US$65,800, Year 2000
sales was US$1.1million.
• Offers over 5,000 watches
from 60 brands. Price
average US$100 – US$2,000
• 75% customers from North
America
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64. Home Grown B2B On-line Exchanges
Some of the b2b online exchanges that have sprung up in Malaysia:
Developed by a United Engineers (M) Bhd subsidiary
CONSTRUCTION EXCHANGE
Combination of 3 vertical portals:
KWX.Asia.com
IdeasAsia.com
InvestmentBankAsia.com
STATIONERY EXCHANGE
FOR BANKS AND FINANCIAL
INSTITUTIONS
500 local manufacturers are members
Launched by XYBASE
E-Business For Airport Community
Rubber-products-based exchange
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65. AGENDA
 ICT: Technology Adoption And Progression
 Global Trends And Development
- Implications for Malaysia
 ICT, E-Business And E-commerce
- Addressing Strategic Issues for Malaysia
 Is Malaysia e-Ready?, and what are the challenges?
 Public & Private Sector Initiatives
 Growing Market for E-Commerce in Malaysia
 Closing Remarks
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66. Total E-Commerce Revenue Growth for
Malaysia (1997 – 2005)
eCommerce Revenue continue to grow US$383.5
million in 2000 to US$9.4 billion in 2005
10,000 US$9.4b
9,000
8,000
7,000
US$million
6,000
5,000
4,000
3,000
2,000
US$383.5m
1,000
0
1997 1998 1999 2000 2001 2002 2003 2004 2005
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Source: IDC Internet Commerce Market Model, IDC 2001

67. Estimated Revenue Growth for b2c and b2b
in Malaysia
It is forecasted that b2b will have bigger market share
e.g. E-procurement project will grow b2b transactions
10,000
9,000
8,000
7,000
b2c b2b
US$million
6,000
5,000
4,000
3,000
2,000
1,000
0
2000 2001 2002 2003 2004 2005
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Source: IDC Internet Commerce Market Model, IDC 2001

68. AGENDA
 ICT: Technology Adoption And Progression
 Global Trends And Development
- Implications for Malaysia
 ICT, E-Business And E-commerce
- Addressing Strategic Issues for Malaysia
 Is Malaysia e-Ready?, and what are the challenges?
 Public & Private Sector Initiatives
 Growing Market for E-Commerce in Malaysia
 Closing Remarks
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69. CLOSING REMARKS
1. Recognise that E-Commerce will transform
the national economic landscape and the
emergence of new breed of companies
providing services in the e-space.
2. The borderless nature of E-Commerce will
increase Malaysia‟s exposure to the impacts
of liberalisation and globalisation and it is
imperative for Malaysia to be e-ready.
3. The need to focus and develop skills in
knowledge intensive areas required by local
and global markets.
69

70. Terima Kasih
suhaimi@mdc.com.my
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