HoloBase-MDEC Webinar: Malaysia is poised to be a digital-first economy

Sep 24, 2021 Other

Rapid technological advancements in recent years have contributed to the remarkable growth of the digital economy. In Malaysia, the digital economy is expected to contribute 20% to the economy by 2020, up from 17.8% in 2015. Especially, the current Covid-19 crisis and resulting lockdown, which have abruptly stimulated the need for online shopping, working and connection, …

HoloBase partnered with Malaysia Digital Economy Corporation(MDEC) to present a webinar to discuss the new opportunities in Malaysia's digital economy, Kairous Capital, SushiVid, and SkinRun also participated in.

 

|Mr. Sivavenayakam Velayutham, Malaysia Digital Economy Corporation(MDEC)

Located at the heart of ASEAN, Malaysia is an ideal and cost-effective gateway to access the region's population base of 640 million with a collective Gross Domestic Product (GDP) of US$2.5 trillion. With strong economic fundamentals, the World Bank anticipates Malaysia to become a high-income nation in 2020. 

As one of the fastest growing regions, Malaysia is making a big push into the digital economy, which consistently continues to be on upward trajectory and accelerates the country's economic development.

To add further impetus to Malaysia's digital economy, the Malaysian government has put in place several incentives to encourage greater market expansion. Some of the incentives include:

• Increase budget to support SMEs business development.

• Provide SMEs embarking on a digital adoption journey with a structured approach.

• Create an inclusive and sustainable talent development ecosystem and to intensify effort on tech talent development.

In addition, some sectors and industries like e-commerce, electrical and electronics, cloud services,… all need to watch within this burgeoning market, which have huge potential for growth.

Mr. Siva thinks that demand can spur the development, and the robust digital infrastructure can gratify the digital needs. He also believes that Malaysia is poised to be a digital-first economy with a robust digital and social infrastructure in the future. 

 

|Mr. Joseph Lee, Managing Partner of Kairous Capital

As early as 2000s, Mr. Joseph Lee has noticed that many Chinese startups were eager to expand their business outside of China, which offered many opportunities to investors and businesses. Therefore, in 2016, Kairous Capital was founded. 

Kairous is a venture capital firm with a hybrid model as it has adopted some PE elements due to its active involvement in post-investment value creation, said Mr. Joseph Lee. The company has invested in technology companies across the region that have proven business models or have the potential to cross borders.

In his views, there are few reasons that the startups are keen to expand outside of China. First, the country has reached a new normal, where the growth rate has slowed down with fewer opportunities. Second, profit margins have been better outside of China due to the fierce competition. So, they have to look for other market with more potential for growth.

Meanwhile, Chinese companies with mature technology and little room to grow can export their technologies and business models to other countries, after all, there is a lag in technology and business model innovation in Southeast Asia compared with China. And this feature provides a huge opportunity for China-based companies to go abroad.

At present, the company's investment areas mainly covers fintech, digital healthcare, insurtech, e-commerce and software applications, as well as any other cutting-edge new technologies.

Most of Kairous' existing investors are enterprises and family offices in Malaysia, the Middle East and China, and the majority of them are Malaysian investors, according to Mr. Joseph Lee. 

In a short, with a favourable investment climate and the support of the Malaysian government, Malaysia's digital economy may usher a boom.