New Malaysia, New Opportunities: Put Your Money Where The Policy Priority Is

May 9, 2018 ushered a new government in Malaysia, who campaigned on a platform of hope, transparency and reform. As the government settles into governing, this short note explores three opportunities for New Zealand related businesses.

Among the slew of government budget allocations and initiatives announced, we think that the following presents opportunities for businesses: i) government is orienting expenditure and initiatives towards the bottom 40 (B40) income group creating opportunities to tap this underserved market, ii) government is increasing renewable energy (RE) generation target, an opportunity for New Zealand to leverage its strong green credentials, and iii) government’s focus on developing small and medium enterprises (SMEs) creates significant business-to-business (B2B) opportunities.

Spending towards elevating the wellbeing of the B40 isn’t new. However, the manner in which the government is undertaking this is more targeted, in effect getting money into the B40. Apart from selling necessities, local businesses have not fully tapped the B40 market. Perhaps New Zealand businesses can offer innovative ideas or business models to profit in this area. For example, maybe New Zealand businesses can help develop the do-it-yourself (DIY) market here in Malaysia. Home improvements naturally follow an increase in income, but with the labour shortages in Malaysia, DIY is quick and cheap.

Additionally, the government is seeking to reduce monopolies and middle-men to decrease the price of goods, to help the B40. This opens up opportunities for New Zealand businesses to venture in more liberalised sectors in Malaysia.

The RE sector also offers many opportunities for New Zealand businesses. As the government moves to encourage RE generation among households and local energy producers, demand for RE components, installation, and system operations and maintenance will grow at a faster pace. New Zealand can use its expertise in RE generation, to sell its higher value add offerings in this space, such as technical training and skill development in market operations. New Zealand firms exploring new technology like grid-energy battery storage could also find a prime testing ground in Malaysia with the more favorable RE business environment.

Malaysian SMEs will be encouraged to venture overseas, enhance capabilities, and retool to new technologies after the government committed financial and supportive measures to aid their development. As SMEs move towards serving more international markets and automating business processes, there are opportunities for New Zealand businesses to undertake joint ventures with (lending technology, expertise and capital) Malaysian SMEs. Xero Limited has made inroads in Malaysia, offering online accounting software for small businesses here. New Zealand businesses can cater to Malaysian SMEs that seek more advanced business processes. Think supply chain management, client relationship management, and robotic systems.

New opportunities abound in new Malaysia for the New Zealand business community. We encourage New Zealand businesses to seize these areas of opportunity.

Patrick SE Tay
Partner, Deals Economics & Policy
PriceWaterHouseCoopers Advisory Services Sdn Bhd