It is known that Malaysia — given its strategic geographic position throbbing at the heart of Southeast Asia and its competitive talent pool armed with a largely English-speaking population — is a terrific place to launch one’s startup dreams.
All of these makes Malaysia the ideal location for tech companies to start and use Malaysia as a springboard to expand into the Southeast Asia region.
JF Gauthier, the founder and CEO of Startup Genome mentioned in his keynote presentation during Malaysia Tech Month 2020 that it is important for Malaysian startups to be ambitious and start thinking of going regional from day one of operations to capture a larger market and prepare for global dominance. Knowing this, the Malaysian Digital Economy Corporation (MDEC), has been working tirelessly to provide market access opportunities for Malaysian-based tech companies to expand their business ventures regionally and globally.
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Since 2017, MDEC has spearheaded various market-access initiatives under the GAIN Programme to catalyse the expansion of Malaysia-based tech companies to become global players.
To date, this programme has formed partnerships with over 200 parties globally and forged over 800 business matching opportunities for local tech companies. All of this has resulted in over US$1 Billion in digital export revenue.
Even through this pandemic-stricken times, MDEC has continued to provide market access support and connect global ecosystem partners virtually. In 2020, MDEC has conducted market access programmes in 10 countries: Philippines, Taiwan, Indonesia, Vietnam, Japan, Russia, Australia, China, Sri Lanka and Thailand.
Indonesia as a fertile ground for expansion
With its enormous digital economy and market potential, it is only fitting for Malaysia-based companies to anchor their plans for regional expansion in a vibrant economy like Indonesia.
In the Temasek-Google report published in 2020, it was predicted that Southeast Asia’s internet sector is poised to grow to over US$300 billion by 2025, with Indonesia accounting for US$44, or 14.6% of the region’s overall internet economy. With such staggering predictions in place, it is impossible for any ASEAN tech company with global ambitions to ignore Indonesia.
“While Malaysia is a great market to start in, Malaysian tech companies need to look outwards to truly soar and grow. Indonesia, being our closest and most populous neighbour with one of the largest digital economies in the world, is an obvious destination,” said Gopi Ganesalingam, VP for Global Growth Acceleration, MDEC.
Over the past few years, MDEC has assisted 60 Malaysian tech companies to expand into Indonesia. We spoke to four of these companies – Moovby, Accendo, Securemetric, and GHL to uncover how they have benefited from this support.
Successes of MDEC’s market access programmes in Indonesia
Having expanded its operations in Indonesia in 2018 after participating in MDEC’s market access programme, Moovby — Malaysia’s first peer-to-peer (P2P) car-sharing platform now operates more than 5,000 vehicles across multiple cities in Indonesia and Malaysia.
In undergoing the programme, Moovby successfully expanded into Indonesia and generated an impressive RM8.9 Million requested bookings to date.
“With MDEC’s help, I was able to connect with the right Indonesian partners that have given me valuable advice to successfully enter the market. This programme was also able to help us cut down the time and cost needed for basic exploration,” said its founder, Nik Muhammad Amin.
Since then, this company has successfully acquired approximately US$500,000 from angel investors and strategic partners, which is expected to gear up its regional expansion even further into other ASEAN countries such as Singapore and Thailand.
On the other hand, Accendo, an HRMS solutions provider, has engaged with three partners that are focused on Indonesia. They have also generated high quality leads over a four-month period, comprising 30% of their total leads during that period.
“MDEC is helping us build our brand in the Indonesian market. As you know, creating a brand is a long-term, multi-pronged approach. This process becomes even harder when we look at the fact that we are an SME with a limited budget, are new in the market, and the pandemic hasn’t made our job easier. So MDEC’s help is one component of the whole approach.” said Shobhit Mathur, CCO of Accendo.
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Meanwhile, Securemetric Berhad, a regional digital security company, invested a 5% stake in Indonesia’s PT Privy Identitas Digital (PrivyID) in January 2020. PrivyID is best known as the first private company in Indonesia to be granted access to the National Identification database for online customer onboarding verification. They are also the certified Certificate Authority by the Ministry of Communication and Informatics.
“We had benefited a lot with stronger market access into those Southeast Asia countries that make us a proud Malaysian Tech exporter,” shared Edward Law, CEO and Executive Director of Securemetric.
With PrivyID’s database of over 4.5 million users and 215 large enterprises including Indonesia’s largest banks and telco companies, prominent fintech startups, as well as several small-medium enterprises, this deal is set to advance Securemetric’s position in the regional ecosystem as one of Southeast Asia’s leading digital security players. “Looking forward for more engagement and work together with MDEC to ensure GAIN CONNEX will continue to shine and further groom more Malaysian Global champions,” Law added.
Meanwhile, GHL, a leading payment service provider and one of Southeast Asia’s top merchant acquirers, was able to approach and collaborate with Indonesia-based merchants after participating in MDEC’s GAIN Connex Programme in June 2020.
Since establishing their presence in Indonesia, GHL was able to approach merchants in major cities such as Jakarta, Bekasi, Tanggerang, Depok, and Bogo and have successfully integrated their innovation with Bank BNI, as well as e-wallet partners Gopay, OVO, Dana, and Shopee Pay. These deals have cemented GHL’s presence as a key fintech player in the ASEAN region.
Kevin Lee, CEO at GHL, shared, “GAIN CONNEX has helped GHL to connect with local potential partners for GHL to provide our end to end payment solutions and services. In addition to that, the programme has helped us to understand the local market landscape better.”
Indonesia continues to be a key market for expansion
Despite suffering from the impacts of the global outbreak, Indonesia continues to be a key market for regional tech expansion.
Ganesalingam added, “Our close bilateral trade relations and the extensive network between Malaysia and Indonesia will enable tech companies from both nations to mutually expand into becoming one of the fastest-growing digital regions in the world. This will allow us to grow more local champions and to empower them to go regional and global, elevating Malaysia as a regional powerhouse and being the Heart of Digital ASEAN.”
Backed by MDEC’s strong mission to continue supporting digital innovation, Malaysian tech companies stand a better chance at becoming major global players in the next coming years. Not only that but with Malaysian businesses expanding to Indonesia, this partnership is also poised to yield great benefits for Indonesians, such as the overall improvement of the quality of life through better technologies, jobs growth, and other socio-economic improvements.
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The GAIN market access program is part of MDEC’s three strategic thrusts – empowering Digitally Skilled Malaysians, accelerating Digitally-Powered Businesses and attracting Digital Investments. It is part of their commitment to roll out key digital initiatives announced in Malaysia’s Budget 2021 and to ensure Malaysian society can fully leverage and benefit from 4IR technologies, ensuring shared prosperity for the many and towards realising Malaysia 5.0, as well as establishing the country as the Heart of Digital ASEAN.
For more information on MDEC’s market access programme, visit https://mdec.my/gain
This article is produced by the e27 team, sponsored by MDEC
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