Digital Free Trade Zone in Facilitating Small Medium Enterprises for Globalization: A Perspective from Malaysia SMEs

Proceedings of ‏The 4th International Conference on Research in Management and Economics

Year: 2021

DOI: https://www.doi.org/10.33422/4th.imeconf.2021.05.20

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Digital Free Trade Zone in Facilitating Small Medium Enterprises for Globalization: A Perspective from Malaysia SMEs

Mui-Yin Chin, Lee-Peng Foo, Mohammad Falahatand Hon–Choong Chin

ABSTRACT: 

The establishment of Digital Free Trade Zone (DFTZ) in Malaysia is closely related to the Chinese e-commerce giant. It was an initiative to spearhead Malaysia’s national e-Commerce strategic roadmap and empowering Small and Medium Enterprises (SMEs) to do cross-border commerce seamlessly. As such, this study aims to understand the perception of Malaysia SMEs towards DFTZ initiative and identify the hidden trepidation of Malaysia’s SMEs towards the e-commerce platforms via focus group interview as per Grounded Theory procedures. The findings reveal that about 40% of the interviewees are pessimistic about DFTZ and did not comprehend the potential benefit beyond it.  Meanwhile, apart from incompatible cost structure and digital infrastructure development, lack of knowledge of technical support and digital talent in innovative marketing strategies are among the main reasons the interviewees hesitate to move towards e-commerce platforms. Therefore, the authorities are urge to take several measures such as providing significant incentives for SMEs to upskilling their workforce, nurturing technology talent and ensuring the development of digital infrastructure to eliminate the trepidation that Malaysia SMEs currently faced.  Be realistic and pragmatic when reviewing the capabilities of local SMEs against the factory of the world is utmost important in helping them to go global and remain competitive.

Keywords: DFTZ; Digital infrastructure; Go Global; Grounded Theory; Malaysia SMEs.