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24 Aug, 2015

ASEAN SMEs urged to venture into online trading

KUALA LUMPUR, Malaysia Aug 21 (NNN-Bernama) — ASEAN small and medium enterprises (SMEs) have been urged to venture into e-commerce or online trading to extend the reach of their products or services.

ASEAN Business Advisory Council (ABAC) chairman Munir Majid said this was the future and currently in ASEAN, only one per cent of the total retail business turnover was being conducted via the Internet.

Most developed economies, he added, saw online trading at nine per cent.

“There is potential growth for the sector if e-commerce is used as the medium to do business. However, there are certain things that must be addressed, such as having an e-commerce payment system, as well as good logistics services. E-commerce is something that must be paid for and there has to be a standard system to facilitate the retail industry,” he told Bernama.

He was speaking on the sidelines of the 14th Meeting of the High-Level Task Force on the ASEAN Economic Integration Working Group on Post-2015 here yesterday.

According to Munir, as SMEs are the backbone of the economies of ASEAN member states, comprising up to 97 per cent of the working population in some, it is vital to have a concrete plan for them and stick to it.

“We must ensure the plan works as otherwise, they(SMEs) will turn away from the ASEAN integration process and this will impact the national economies and the region as a whole,” he said.

He also said that SMEs were the most impacted by the lower prices of crude palm oil (CPO) and rubber, especially those from the three biggest producer countries, namely Indonesia, Malaysia and Thailand.

“With the lower prices for CPO and rubber, the three countries will contribute less to Southeast Asia’s collective gross domestic product by 2025,” he added.

He highlighted the need for SMEs to be exposed to strong competition and having the online trading platform is an advantage for them.

There will be an SME Masterplan in November, which includes the setting up of an ASEAN finance digital platform for SMEs.

“We must give SMEs the chance to compete, hence the emphasis on access to finance. They can use this available technology to upgrade technology of their own in improving the management system and linking up to the supply chain where the growth is,” Munir said.

The ASEAN Economic Community (AEC), with a population of more than 600 million and a combined gross domestic product approaching US$3 trillion, would emerge as a single market and the seventh largest economy globally. It is also predicted to become the fourth largest market by 2050.