Attractive Growing Emerging Market-Malaysia for Investment , Employment and Tourism

Emerging Market Malaysia is an Attractive Growth Market for Investment, Employment and Tourism is often forgotten

Strategic marketing is a worthy exercise for only the Corporate world. Even small businesses need to think about businesses keeping their eyes and ears open to the new markets coming up and trying to take advantage of their by coming up with product and services that have a demand in this market. It is simply a way of making sure that we don’t lose the sight of the future. There is always the long term and the short term in both organizational and individual perspective. Even in our own lives we need to think about the future.

It is important that these products and services created are in tune with the strengths of the organization. This requires a meticulous screening of the markets and waiting for the right time to get into this market. If the entry is too late the competition may have taken a dominant position and established their brand in the market. It can be very difficult and expensive to displace a strong competitor, especially one who does not have any resource shortage and can spend on promotion and advertising. Being first always gives some advantages to brands. People generally remember the first and not second and third. That does not mean there is no hope for others, there is always the possibility of doing something differently or doing something special for a limited groups.

This is the niche marketing in business language

Malaysia as a target country is not new. They have moved fast in liberalization along with the rest of the members of ASEAN and attracted considerable foreign investment. But I think, there still is enough potential in the market, because of the rapidly changing profile of their population and also the lifestyles.

Many investors look at Malaysia with a bit of skepticism. Even those looking for jobs overseas have a tendency to put Malaysia on low priority. There are perhaps some apprehensions too about Malaysia that it could be conservative country with rigid Islamic practices and therefore the market may be difficult to succeed.

I have worked in Malaysia and found that it is not a correct opinion and the country is capable of very quickly adapting to changes and making rapid progress. Some of the factors that make Malaysia an attractive market are

Malaysia population is small about 27-28 million consisting a mix of Malayan, Chinese and Indians. Among Malayan and Chinese too there are many sub groups and dialects they speak. Malaysia is 43^rd most populated country. Five to six million live in East Malaysia and 22 million live in Peninsular Malaysia. The population is growing at 2.4 percent. Thirty four percent of the population is under 15 years. The Bhumiputras considered to be the native Malaysians constitute about 65 percent. About 20 million are concentrated in the low lands of Malaysia which has an area of 131,588 km.

Islam is the main religion (60.4 %) followed by Buddhism (19.2%), Christianity (9.1%) and Hinduism (6.3%) and others.

Malay is the main language, but Chinese and Tamil are also spoken. English is very popular and the main language of communication for visitors.

Malaysia’s per capita GDP is US $ 13, 315, making it the 56^th in the world, and the unemployment is 3-4 percent making the country 31^st in the world. The carbon emission is 7.05t and in corruption it ranks around 43^rd. The currency of Malaysia is ringgit ( a US $ is about 3.2 ringgits, written as myr) The GDP is anticipated to grow at about 4 percent and private consumption is expected to grow at about 7-8 percent

The press freedom rank is 124^th, the literacy rate is 88.7 percent (94t rank) making Malaysia 63^rd in the human resource development index.

Malaysia is ranked 24^th in ease of doing business with an E readiness rank 34. The number of internet users in Malaysia is estimated to be 14,904,000 (23^rd). The quality of life in Malaysia is rated 36th with a low birth rate at rank 94. The unemployment rate in Malaysia is as low as 3.1 percent.

Thus we can see that Malaysia has the attributes for a growing market with high literacy, high internet usage for internet marketing and high per capita GDP which gives the people good spending power.

Some factors which often mislead those who look for jobs and also those interested in business in that the wages in absolute money appear low, but the cost of living is also considerably low compared to its neighbors like Singapore, Thailand and Indonesia. This gives the Malaysians a good propensity to save and also spend.

Even though the population is low compared to many countries the per capita consumption is high especially due to low cost of living and the large floating population of foreigners working, studying and touring in Malaysia.

The Malaysian Consumer

The Malaysian consumers consist of the local Malay Chinese and Indian (mostly Tamil speaking) consumers, and expats from many countries. These consumers are usually from the upper income groups and spend well. Malaysia has a large number of foreign students from Iran, Iraq, Brunie, Bangladesh, Srilanka and the African continents. Due to this cosmopolitan nature and also because the Malaysians are fairly modern and progressive, the consumption of white goods, recreational services and personal care retailing are quite substantial.

Malaysia has large number of modern malls, hypermarkets, with departmental stores, and most of global brands can be found there in almost every category like electronics, computers, cameras, jewelry and garments. Shopping is a week end activity for Malaysian consumer who loves to shop and spend a lot time in the shopping places. This is a positive signal for retail and special services.

http://www.kuala-lumpur.ws/klshopping/modern.htm

Many residential places have mini malls in the neighbor hood. The prices of the smaller items can be a little high and the average Malaysian consumer goes and buys in super markets in the week ends

The transport being well organized and integrated most of the shopping malls are very close to the rail or bus terminals and taxis can be obtained at a very reasonable rate. But most Malaysians and many foreigners own cars. The cost of gas (petrol) and tolls being very reasonable Malaysian consumer is able to reach the malls without much inconvenience for shopping.

Foreign exchange conversion is easy and is available in most of the big malls. However, if you are traveling there you need to make sure that the travelers checks you take with you are accepted. American Express is accepted in most of the place and almost all credit cards are accepted

New Business Potential

Malaysian imports are in the range of 39.5 billion myr (approx myr 3.2 is one US$) and exports are about myr 52.4 billion. These consists of the imported components and exported value added goods as well.

http://www.mida.gov.my/en_v2/index.php?page=import-duty

http://www.matrade.gov.my/cms/content.jsp?id=com.tms.cms.article.Article_6c50bab3-7f000010-290f29

Emerging Attractive market with growth potential

There is a growing potential for new business in Malaysia. Due to ethnic differences Malaysia imports many food and cooking items from different counties. Malaysia is very import oriented but still enjoys huge trade surplus due to their rubber, tin and oil exports.

Vegetables, fruits, Packaged processed ready to cook foods, cereals, snack items and many other varieties are imported. Diary items are imported from Australia and New Zealand, foods from China, India and Middle eastern countries. Halal requirement must be met for foods. Considering the number of malls and Malaysian consumers love for food the potential is quite high. There has generally been a liberalization in foreign direct investment regulations.

Liberalized areas include – abolition of restrictions on domestic borrowing by non-resident controlled companies, allowing residents to hedge committed inflows or outflows of funds, maintenance of foreign currency accounts, borrowing in foreign currency.

http://www.pwc.com/en_GX/gx/retail-consumer/pdf/malaysia.pdf

Though fast food retails are present in the bigger malls Malaysian love rice and rice preparations and also chicken and spicy preparations like Goreng. Malaysians spend a high percentage on food groceries and personal care items ranking number three in major economies of Asia Pacific (excluding Japan). Average expenditure on food and groceries is myr 505 according Nielsen survey The Malaysia consumer is no longer confined to basic needs but also spends on leisure themes, health beauty and fitness. Some of the brands in skin care, cosmetics and electrical and electronic durables from Malaysia have done very well.

Investment in wholesale and retail sector need approval of the Ministry of Domestic trade and Consumer affairs. An application need to be made 2 years ahead . The foreign investors are not allowed to invest in mini markets less than 400 square meters(sqm).,and supermarkets falling between 400 2000 sqm. and also 24 hr stores. Investment in hypermarkets is permitted with local incorporation and capital of 50 million myr. These would be permitted in locations of populations over 350,000 or more and 3.5 km away from the residential and city centers.

Retail on lease hold in a place like Penang was quoting myr 2600 sqft on lease hold in prime locations. These rates are only indicative and vary based on the location.

Many global manufacturers are in Malaysia and need skilled labor. Electronic goods and components are in high demand .

Malaysia has a conscious program to strengthen their software industry and have developed a software corridor where majority of the hardware and software producers are located..

Employment Opportunities

There quite a few Private Universities initiated at Government request by Corporations like Petronas and Telecom Malaysia and also Universities from UK and Australia. They recruit faculty from other countries to teach. Malaysia may be open to further investment in higher education by educational institutions from other countries subject some regulations.

Malaysia invites foreigner who bring in some capital to settle in Malaysia. The paid up capital minimum needed is Myr. 250,000. The best way to get a job in Malaysia is to apply to the employers though there are quite a few recruiting agencies.

Work permit is needed for employment with salaries less than myr 3000 per month and visit pass is needed for those who go on project work and business. Employment pass is given by government for those with up to 2 years stay and salaries more than myr 3000.

Generally it should not be difficult to find a job in Malaysia. Income of about Myr 3500 per month would be reasonable for living above middle class standards. Apartments can be rented around 600 -1200 myr., per month, depending on bed rooms, what you expect with security, cooking gas and electricity are very inexpensive and should not exceed myr 50-80 pm. Food and other expenditure is not high. Malaysia is one of the few places where a person can afford to eat out 7 days a week with each meal not costing more than 5-7 myr except in expensive restaurants. There are no restrictions on alcohol for foreigners and many alcoholic beverages are available in some supermarkets. Public transport is comfortable, good and inexpensive sometimes allowing travel on the same ticket whole day. Both husband and wife must have work permits if both want to work but spouse can accompany as a dependent (restrictions may be there in some places).

Tourism in Malaysia.

Tourism is one of the main industries of Malaysia’s economy. Therefore, there is a conscious attempt by Government to develop this sector. Petronas towers, taller than many tall towers in the world is the pride of Malaysia and believe it or not they hold races to go up all the way to more than hundred floors. If you need tickets to go up you need to be in the line very early in the morning because limited number of tickets are issued, but it is worth it even after seeing Sears towers and towers in New York. The main attraction of Malaysia are the beaches and related activities like under water diving.

Malaysia is ideal for a lazy tourist who wants to swim, and relax with a book, shop around and eat a variety of foods a very low prices. There are enough busses, trains and flights to travel around Malaysia. Highways are good but I would not recommend driving if you can avoid it. Accommodation is available in all ranges from about myr 100 to 500, but due to the influx of tourists mainly from the new and inquisitive tourist from China it is advisable to have reservations made in advance where ever you go. Most of this can be done easily at KL Central, the hub of all types and transports where usually some one would go direct from the Airport and super fast train. The KL International is one of the best airports with all comforts and the train to KL central can be taken by just taking the glass elevator to the lowest level.

In tourism, I would rank Malaysia as an attractive place with good accommodation and transport to beautiful beaches around Malaysia. For some one who has a desire to see Asia Malaysia is certainly ad add on to comparatively expensive but more efficient Singapore.