• 77 per cent of Malaysians say it is challenging for them to work from home.
• Only 9 per cent of Malaysians feel it is more productive to work from home.
• Internet connectivity and a lack of digital tool adoption remains a challenge
• SMEs must bridge digital divide in the post-pandemic era

Try this: Walk into a room full of professionals and ask a Malaysian how remote working has been. Chances are you might get an earful. 

The MCO was first enforced on March 18 but was extended before its expiration on April 14 to April 28. Thousands across the country are working from home amidst the increased reports of COVID-19 cases each day.

At the time of this post, the latest official announcement reveals Malaysia will be in a state of conditional MCO (CMCO) until June 9 in efforts to break the COVID-19 infection chain in the country. 

SMEs are the backbone

98.5 per cent of business establishments in Malaysia are SMEs consisting of various sizes and cutting across different sectors. There are approximately 910,000 SMEs in Malaysia.

 

In other words, only 1 out of 50 businesses is not classified as an SME. In 2018, SMEs contributed MYR 521.7 billion (or USD 119B at present exchange rate) of the nation’s gross domestic product (GDP). SMEs provided 5.7 million jobs to 70 per cent of Malaysia’s workforce in 2019. 

The question however remains…

Are Malaysian SMEs digital ready?

Embracing digital can be broadly categorised into computerisation and digitalisation. Computerisation refers to the adoption and usage of digital devices for individuals with limited use for business purposes. 

 

Digitalisation meanwhile is defined as business process transformation, including customer management, transaction, services, and feedback in a completely digital environment. Gartner also weighs in on this term.

“Digitalisation is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities,” according to Gartner’s glossary. It is the process of moving to a digital business. 

With MCO in effect, thousands of SMEs in Malaysia find themselves barred from their physical businesses. Only a handful of those classified as essential services can operate with some form of normality, even then in a reduced or controlled scale. 

Some businesses have turned to remote work or work from home to stay connected with their colleagues and teams. Online meetings via video conferencing, webinars, and Zoom calls have statistically seen a tremendous spike since the start of MCO. 

 

While some have found ways to transform the operational, marketing, and selling of their goods and services to online platforms in these times, others have not been as successful. Many undigitised businesses have faced difficulties ranging from preparing quotes, updating price books, retrieving customer information, completing payroll and taxes on time, or even accessing historical sales and marketing data. 

Key challenges for SMEs

A survey by SME Corp in 2018 reveals the utilisation of the digitalisation enablers like Cloud services (SaaS, PaaS, etc) and the Internet of Things (IoT) among SMEs were relatively low. There isn’t any other data to suggest this trend has changed at the moment. 

 

The study reveals although about 54 per cent of the total respondents reported that they used some form of data analytics, the majority of them were only using spreadsheets on their computers.

When it comes to utilisation of Cloud services, about 44 per cent of the total respondents used the services, which are largely driven by online storage demand, such as Dropbox and Google Drive.

Meanwhile, only about 35 per cent of the total respondents utilised IoT in their businesses that are mainly used for security and surveillance as well as for fleet management.

Although 90.1 per cent of the respondents have an internet connection, they are still faced with issues, such as high price, low internet speed, and poor connection.

In terms of affordability, the majority of respondents in the Northern Region and East Coast cited that the cost of an internet subscription is relatively expensive. Malaysia ranked 74 out of 167 countries in terms of price per Mbps for fixed broadband services, and 64 out of 118 for fiber broadband services.

This puts the country behind regional peers such as Vietnam and those at a similar level of economic development such as Mexico and Turkey.

Low internet speed remains a common concern, highlighting the need to strengthen broadband infrastructure, as broadband remains a bottleneck holding back SMEs’ digitalisation. Survey findings discovered that fixed broadband, such as Streamyx, Unifi, and Time is a preferred broadband channel in all regions in Malaysia.

Meanwhile, mobile broadband which is wireless internet access through smartphones is preferred by the respondents outside of Kuala Lumpur and the Central Region.

Besides poor broadband quality, other fundamental challenges faced by SMEs in crossing the digitalisation chasm are the lack of understanding of digital tools, technology enablers, insufficient know-how of financing, and limited access to technology itself.

To build a conducive ICT ecosystem for SMEs, the majority of the respondents require assistance in financing, followed by technology and development of employee skill sets.

Analyses reflect that SMEs often struggle with digital developments. Barriers to infrastructure, regulatory and administrative burdens, insufficient access to finance, and digital skills in the workforce are some issues facing SMEs. 

The Malaysian dilemma

 

Fast forward to 2020, a more recent survey conducted by Vase.Ai in March 2020 doesn’t paint an optimistic outlook either. Malaysians cite unstable internet connection as the primary challenge when it comes to working from home. Other factors mentioned include challenges in communicating with colleagues, and difficulties accessing data on the office database. 

 

 

On the flip side, only 9 per cent of total respondents feel it is more productive to work from home. When dove deeper, top reasons for this is because they’re able to work according to their schedule (49 per cent), they have the advantage to spend time with their families and get work done simultaneously (36 per cent), and because they have their own working space at home (36 per cent). Only 7 per cent say better internet connectivity at home contributes to their productivity.

 

Granted the survey respondents are working professionals and aren’t necessarily the voice of SMEs business owners or decision-makers themselves, it nevertheless provides valuable insight at a critical time. Namely, in revealing why working from home isn’t well….working and secondly, a glimpse into SME digital readiness.  

Armed with some readily available data, courtesy of the Malaysian Communication and Multimedia Commission (MCMC), we aim to identify why a majority of professional Malaysians are unhappy with their present work from home experience for reasons cited, primarily unstable internet connection. 

A Q12019 report revealed most Malaysians are connected to the internet via mobile broadband. Figure 2 (below) paints a clear picture of broadband by subscription type for 2018.  

Figure 2: Total broadband subscription in 2018 

While mobile unsurprisingly, triumphs fixed-broadband subscriptions, it also suggests that a majority of Malaysians are heavily dependent on their mobile broadband for a variety of purposes, ranging from the mundane email, video calls to playing mobile games or consuming video content, banking, and shopping online.

Mobile broadband is for most Malaysians, the gateway to work and entertainment, especially when working from home during COVID-19.

Meanwhile, Open Signal’s March 2020 report on the mobile experience says that in the last week of March (when MCO was in full effect), average mobile broadband speed witnessed a 30 per cent reduction in comparison to the weekly median average. 

 

SMEs don’t have the right tools too (or the money)!

The fact of the matter is not all broadband connections are created equal. Using mobile broadband to run a video conferencing call with 10 people and screen share is a tremendous task. Understanding how much speed or Mbps you’re getting and what you can do with it, is ultimately critical.

It’s supremely paramount for SMEs to understand digital tools available, COVID-19 or not.

SaaS tools such as Swingy and Kakitangan help SMEs manage payroll, benefits, employee information, and more in a single platform. SMEs with a distributed workforce and need a simpler and efficient process in managing time attendance can look at Hauz which offers a complete solution especially in times of business continuity.

If you’re thinking the time is ripe now to build your online presence and need compelling videos that resonate with your audience tools like Design.Ai get the job done. Sales tech solutions help companies respond quicker to leads and therefore increase chances of closing a sale. One such locally developed solution is SalesCandy.

When SMEs go digital, information and data become accessible anytime and anywhere. SMEs then find themselves in better shape in responding to situations like a pandemic. Of course, going digital-only isn’t the silver bullet. People, processes, culture, and communication are equally important.

While financing, often an impediment, MDEC, BSN and SME Bank has embarked on a strategic collaboration effort to propel digital adoption via an SME Matching Grant program. The government will provide a 50 per cent matching grant of up to MYR5,000 per company for the subscription of the above services.

Besides that several ecosystem builders, both in Malaysia and Singapore have activated programs to help SMEs access tonnes of digital tools at discounted rates, while some, at zero cost. Tools like JANDI for remote work during Covid19 are free for teams of any size or industry, designed to keep your team connected and productive from anywhere.

For professionals working from home or SMEs catching up to digital, all you have to do is ask the right questions and act on the answers. And some of the answers have been laid out in front of you.

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Register for our next webinar: Fireside chat with Paul Meyers and Jussi Salovaara

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With food delivery apps installed on a smartphone, why leave the comfort of home? Fine-dining or fast food, Mexican or Italian, you can get almost any cuisine imaginable with mere swipes of your fingertips.

Cravings and hunger pangs are conveniently satisfied. Then… you tap make payment and the app freezes.

You wait in anticipation, but nothing happens. What now? Refresh, reload, re-enter your order all over again? We’ve all been there.

In fact, 55 per cent of consumers admit that problems with digital services affect them more or for longer than they would like, and confess to becoming irritable towards others, even throwing their devices in a fit of rage.

From work to play

Apps are a dominant presence in every part of our lives. First thing in the morning, we reach for phones to turn off alarms and respond to texts. Checking emails automatically follows, as does reading the news and hailing a ride to work. As the day progresses, different apps are opened, closed and reopened without a second thought.

As consumers shift more parts of their lives online, it is only natural that they increasingly interact with businesses digitally. Digital services have become so intrinsic in daily life that 71 per cent of the consumers surveyed in the 2019 edition of AppDynamics’ App Attention Index don’t realize just how much they rely on apps.

As a result, many have started to attach equal or even greater importance to digital experiences than face-to-face interactions.

With the global pandemic forcing entire countries into lockdown and online, consumer reliance on apps has never been higher than now. Singapore too has implemented ‘circuit breaker’ measures that restrict travel and limit physical interactions.

Also read: 8 things to consider when choosing a mobile app development platform

Even before the current situation, Singaporeans had already shown significant reliance on apps with an average of 115 installed apps coupled with high app use. No wonder then that from shopping to banking and everything in between, apps have naturally stepped up to fill in the gaps.

Video conferencing apps like Webex allow businesses to continue functioning while Grab and Lazada meet food delivery and e-commerce needs.

For businesses, this is a chance for growth, but it comes with great risk. Disruptions to app services may result in severe repercussions, namely unforgiving, lost customers.

Apps today are not just a complementary element but a key differentiating factor. Consumers are no longer loyal to brands, but instead to apps, and businesses must prioritise elevated consumer expectations and ensure smooth experiences to grow their customer bases.

How then should businesses ensure apps are competitive and boost revenue in the business of apps?

Focus on the customer experience

While product offerings can be easily matched by competitors, the customer experience is not easily replicable. Customer journeys in every channel of interaction, be it through an app, a webpage, or even in brick-and-mortar are critical, even more so than metrics such as a product’s price. Singaporeans rated companies with good digital experiences higher than their competitors in KPMG’s 2019 Customer Experience Excellence Report, proving that each interaction, including digital ones have the potential to create long-lasting impressions.

Critically, as personalisation is also a key facet of customer experience, brands that utilise data with the right algorithms will be able to obtain precious insights and tailor product offerings – creating the best possible digital experience according to individual needs and preferences.

First impressions are made online and – particularly evident during the height of the pandemic – entire transactions are completed without physical visits. From research to comparison to purchase, a seamless digital experience can make all the difference. While brands understand the importance of physical interactions and service, the same can’t be said for their digital customer experience.

Interruptions and issues with apps can lead to negative emotions of stress and anger. And akin to a rude retail assistant or faulty POS system, poor digital experiences can have far-reaching consequences that extend beyond one lost sale, with 66% of consumers claiming they would avoid a brand known for providing poor digital experiences.

Push ahead with digital transformation

Digital transformation is not a new phenomenon and its importance will only increase as yet more consumers move online. Businesses should embrace going digital to enjoy benefits that are not limited to just improving organisational efficiency.

Tools like apps present businesses with opportunities to reach new customers, while also reinforcing relationships with existing ones.

Apart from being a platform on which to make products available, digital tools and apps are valuable channels for customer engagement.

Also read: How do you optimise the customer experience during a festive rush?

The omni-channel customer experience is in vogue, and businesses must adapt. When buying a product, Singaporeans call retail outlets, check out the brand’s web store, and then proceed to search for deals on Shopee, Lazada and maybe Qoo10 – and brands are expected to have a presence on many different platforms.

With the multitude of new channels available to consumers, brands must go where the eyeballs go in order to reach out to their target audiences – digital.

Ensure that data and insights are acted on

Because consumers depend heavily on and use applications in daily life, companies cannot treat digital experiences as separate to the business. Going digital also means that businesses have access to huge amounts of data and should utilise it.

By correlating different aspects of an app interface to goals such as customer acquisition, or analysing usage patterns, brands can improve and incorporate effective changes to the digital experiences they provide.

Brands that will stand out from the competition and secure growth will be those that can align digital performance to business outcomes.

In response to these changing digital habits, maintaining visibility of the entire tech stack, monitoring performance and resolving digital problems should be a priority for all businesses. This begs the question – is it possible for IT teams to reduce mean time to detect (MTTD), and mean time to resolution (MTTR) if errors occur, and can they prevent such problems to begin with?

APM solutions such as AppDynamics are capable of using AI to identify where gaps in performance occur in real-time, and potentially resolve these errors.

Businesses should not underestimate the impact of digital experiences on business outcomes. Customer satisfaction is evidently integral to revenue and loyalty and it is clear that every aspect in the customer journey including app performance must be consistently smooth and seamless.

As consumers become more demanding and less forgiving, brands must respond accordingly to meet and exceed their expectations – after all, customer satisfaction can and will directly affect the bottom line.

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Register for our next webinar: Fireside chat with Paul Meyers and Jussi Salovaara

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Indonesia-based accommodation startup Bobobox has secured US$11.5 million in Series A funding round of funding, led by Horizons Ventures and Alpha JWC Ventures.

Kakao Investments, Sequoia Surge, and Mallorca Investments also joined the round.

The Bandung-headquartered startup will use the money to accelerate its product improvement and location expansion. It wants to enhance ‘Pods’ features and overall experience by growing its tech team and strengthening its manufacturing and operating models.

Founded in 2017, Bobobox is a capsule network with a vision to be the recharging facilities for everyone to get quality rest. Its capsule rooms, or ‘Pods’, are equipped with app-controlled secured door access, customisable lights, Bluetooth speaker, king-size and single-size bed, compact working space, and personal air conditioner. The prices start from US$10 per night.

Surviving COVID-19

Pre-COVID-19, Bobobox operated eight buildings with more than 500 pods in total and an average occupancy rate of 80-90 per cent. Amidst the crisis, its occupancy rate in March dropped to 50-60 per cent whilst other hotels were already at single digit and many had shut down.

“Despite the turbulence due to the pandemic, we are grateful that we can still lock in investment from global investors,” said Bobobox Co-founder and CEO Indra Gunawan.

The pandemic also opens new opportunities to Bobobox as local users become new regulars of the pods instead of the usual foreign tourists.

Also Read: Indonesian capsule hotel startup Bobobox raises pre-Series A funding round

To cater to the demand while keeping both its team and customers safe, Bobobox has applied extra preventive measures, including limiting numbers of guests and closing common areas. The company has made no changes to  the cancellation fees to maintain customer trust.

“With extended preventive measures in place, many locals have relocated to our pods to improve their work-from-home experience. Some would choose Bobobox with the closest distance to their workplace to avoid long commutes to work, limiting their exposure to crowded public facilities,” said Bobobox Co-founder and President Antonius Bong.

Bong continued that the situation also has allowed the startup to show more use cases of its sleeping pods. “With little modifications, we have installed more than 100 pods in hospitals as comfortable shelters for doctors and health workers so they can rest better while remaining close to their patients. We have been getting great feedback from the medics and local governments on these facilities.”

Since its funding announcement last year, Bobobox added six new locations in three cities: Bandung, Jakarta, and Semarang.

Bobobox also has four new locations in three cities ready to launch subject to COVID-19 circumstances.

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Picture Credit: Bobobox

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ADQ’s US$300M fund Alpha Wave Incubation to invest in India, SEA startups

Abu Dhabi’s non-oil sector holding company ADQ has launched a US$300 million VC fund, which will back early-stage companies in India and Southeast Asia.

The fund, named Alpha Wave Incubation (AWI) Fund, will be located at Abu Dhabi Global Market and managed by New York-based Falcon Edge Capital, according to a report by The Economic Times.

Mohammed Hassan Al Suwaidi, CEO of ADQ, said that the fund will also assist its portfolio companies in setting up their global or regional headquarters in Abu Dhabi’s Masdar City.

This will allow them to utilise the digital infrastructure in place, along with market access to the UAE and the broader Middle East and North Africa region, as well as other research and development.

ADQ is a public joint stock holding company that was formed in 2018. Formerly known as Abu Dhabi Developmental Holding Company, it manages a portfolio of companies in sectors, including healthcare, tourism and hospitality, logistics, manufacturing, utilities, media, agri-business, and real estate, among others.

Cambodian bank Wing, Techo Startup Centre collaborate to support the country’s digital economy

Wing (Cambodia) Specialised Bank and the Techo Startup Centre have announced a partnership to facilitate the growth of startups and small and medium-sized enterprises in the country.

With Wing, the Techo Startup Centre and its members plan to use the digital payment platform to find new opportunities for innovation.

Dr. Nguonly Taing, Executive Director of the Techo Startup Centre, said: “Our startup members will also be able to connect and learn from an innovative company such as Wing and reap the benefit from technical expertise, advice as well as digital payment solutions of Wing.”

Also Read: Grab launches ride-hailing service in Cambodia; partners with mobile payments firm Wing Money

According to Khmer Times, Techo Startup Centre was founded in April 2018 with the mission to help the country develop a well-rounded digital economy. It seeks to support entrepreneurs and build on official plans to transform and diversify the economy.

APAC arm of Japan’s recruitment firm Persol invests in SEA-focussed HR-tech startup Freecacy

Persol Asia Pacific, a subsidiary of Japanese recruitment firm Persol, has invested in Southeast Asia-operated HR-technology startup Freecacy.

The investment also signals both parties’ partnership that seeks to “replace AI recruitment in Southeast Asia by using AI that has learned a mixture of job seeker behaviour history, résumé information, and agent selection criteria.”

According to a Staffing Industry report, Freecacy operates ‘freeC’, a platform that supports AI research in Southeast Asia.

Takayuki Yamazaki, Chairman at PersolKelly and Head (APAC) at Persol, said: “The HR market in the APAC region is undergoing rapid changes daily, centred on the evolution of technology. This time, the business alliance with HR technology startup Freecracy is making a leap forward in Vietnam.”

Indian telco Reliance Jio raises US$1.5B more from KKR for a 2.32% stake

Indian telecom operator Reliance Jio Platforms have reportedly agreed to sell 2.32 per cent of its stake to US equity firm KKR, making it the fifth major deal the business group has sealed in the past weeks, TechCrunch reported.

Jio is the subsidiary of Reliance Industries, a business firm owned by Mukesh Ambani.

KKR has announced it plans to invest US$1.5 billion in the startup. When the deal is done, the equity firm will be joining a host of Jio’s other investors, such as Facebook, Silver Lake, Vista Equity Partners, and General Atlantic

Also Read: Afternoon News Roundup: Bukalapak denies reports of user data breach

With the investment from KKR, Reliance Jio platforms will be valued at US$65 billion.

Last year, Ambani committed to get Reliance out of its US$21 billion debt by 2021. The fresh funding that goes to its startup Jio would also be helping its oil and petrochemicals companies, which experienced 37 per cent tumble in net profit in the last quarter.
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NEXEA, MDEC launch Entrepreneurs Programme to help Malaysian companies explore business opportunities

Malaysia-based NEXEA Angels has partnered with the Malaysia Digital Economy Corporation (MDEC) to launch a programme called “Entrepreneurs Programme”, according to DigitalNewsAsia.

The goal of the programme is to offer peer-to-peer learning for CEOs of local startups to find a solution to their business issues. It will include mentoring support from experienced individuals in the business industry as part of its monthly full-day meetings.

“In the Entrepreneurs Programme, we have seasoned entrepreneurs with successful track records, as mentors, to provide guidance and other support to programme participants,” said NEXEA Managing Partner Ben Lim.

The programme has 20 startup CEOs enrolled and is looking to fill in more applicants.

Soft Space first joins Visa’s fintech programme in Malaysia

Soft Space is joining Visa’s Fintech Fast Track programme in Malaysia.

The programme allows fintech partners to build and deliver new commerce experiences on Visa’s payments network.

Kuala Lumpur-based Soft Space develops innovative payment services for the banking and financial industry.

As part of the programme, the two companies will work together to offer startups and technology companies the opportunity to work with Soft Space to launch Visa prepaid card products in Malaysia.

This solution is introduced through Soft Space’s subsidiary, Fasspay, which is an e-money license holder regulated by Malaysia’s central bank BNM.

Manila city, GCash partner to help taxis shift to cashless payments

The Department of Transportation Manila has partnered with GCash to help equip taxis with scan-to-pay systems to ramp up precautionary measures for COVID-19, according to ABS-CBN.

“Digital payments will limit direct physical contact between drivers and passengers thus reducing the chance of spreading COVID-19”, the department said.

Also Read: Bobobox raises US$11.5M funding when many of its peers in the hospitality sector are on the brink

G-cash is a Malaysian startup providing mobile payment services along with telecommunication services in the region.

Payment platforms like Squidpay, PayMaya and Beep, are also being considered for partnerships by the government.

“Cashless and contactless payment scheme will now be part of the ‘new normal’ in the public transportation system,” Transport Secretary Arthur Tugade said.

Filipino bank EastWest unveils digital banking arm 

The Philippines-based East West Banking Corp. has launched Komo, a fully-digital banking platform operating under the group’s rural banking arm, as per a report by The Inquirer

Offered through its fully-owned subsidiary, EastWest Rural Bank, Komo launched a digital savings deposit product carrying an interest rate of 3 percent per annum without any minimum balance.

Komo received approval from Bangko Sentral ng Pilipinas to launch its digital bank services to the public last May 8

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