Many small and medium enterprises (SMEs) opt for their products to be exported so as to diversify their revenue base and gain a strong foreign foothold. This is despite having to deal with various documentation processes relating to customs clearance.
That said, the export landscape has changed over the years especially with new regulations and requirements in various countries. In addition, most of the SMEs have to compete with cheaper China-made products.
dpstar Holdings Sdn Bhd, which manufactures thermo sensors and industrial heating instruments, has seen lower demand for its products as a result of the influx of Chinese products over the years. The company has been exporting its products for over two decades to Singapore, Indonesia and the Philippines. Its export business contributes about 15% to its total revenue.
“It’s a known fact that the products from China are very cheap. We have been experiencing flat export growth for the past two years despite the weakening of the ringgit. There is very little loyalty for these types of products so what we rely on would be building good relationships with our clients,” says its business development manager Ken Lim.
Lim, who has been in charge of the company’s clientele for almost five years, finds that modern technology makes a huge impact on how businesses interact and his company is leveraging on it.
“Aside from meeting key business people from different countries, we’ve explored search engine optimisation (SEO) for the countries we have presence in. Every country has a different online pattern and we would advertise by specifying our products using local online visibility.
“Each country would have its county domain and it would be great if you have a website specifically for that. For instance, if you have started exporting to Indonesia, you have a website that is in their domain.
“With the internet, communication is much faster and it’s easy to conduct your due diligence on the companies you’re about to deal with,” he explains.
However, Lim notes that when it comes to exports, formal visits are still required as deals are usually in large amounts.
“Being online doesn’t really give you the entire knowledge on how business is conducted. There still needs to be a few trips to the country and sometimes negotiations can take up to a year,” he advises.
Lim says his company is involved in direct as well as indirect exports. “Direct is where we export our own manufactured products to be sold and indirect would be exporting the parts that need to be assembled there,” he says.
dpstar has ramped up its export capacity and presence in the US and China since being selected as one of the original equipment manufacturers (OEM) for America’s biotech company Thermo Fisher Scientific.
dpstar ships out products worth at least RM3,000 and even as high as RM38,000 per week.
Localising web content to boost exports
Similarly, for Pradotec Corporation Malaysia Sdn Bhd, SEO plays an important role in increasing its visibility.
“Investing in SEO will also help a lot in the export market,” its head of sales and marketing Melissa Lee says.
Lee would like to see Malaysia participate in more FTAs
The security specialist which focuses on smart cards and biometric technology began exporting electronic hardware used for border control in 2007. It exports to Europe, the Middle East, Latin America and Egypt. Exports now contribute 40% to the company’s annual revenue.
As its products are very technical in nature, Pradotec operates customer support centres to attend to all product queries. The company believes that if done right, it can also be one of the success factors in gaining more export deals.
Lee notes that operating its customer support centres is no easy feat, but it is a vital service. “Customer support is always our biggest challenge, as sometimes we are too far from the customer and with the time difference, it is a challenge to respond promptly,” she explains, adding that the company has to deal with different time zones as well as cultural barriers.
Lee adds that Pradotec has expanded its export capacity significantly, thanks to its customer support centres to help local and foreign clients.
“We will be looking at continuous growth in (exporting) our product, as there is increased demand, especially from the Middle East. I would probably say another 15-20% (increase),” says Lee.
However, the company is not resting on its laurels and is looking at enhancing its export sales.
“From the past, we have been quite active in participating in events organised by Matrade, at least twice a year. From the exhibitions, we are able to increase our brand presence and clients from all over the world are able to meet us in person,” Lee says.
To further enhance the local export industry, she hopes Free Trade Agreements (FTAs) can be sealed with more countries to boost exports.
Exports continue to grow
Malaysia’s total trade grew by 20.8% to RM1.62 tril in the first 11 months of last year compared with the same period of 2016.
According to Malaysia External Trade Development Corporation (Matrade), exports surged by 20.4% year-on-year to RM856.05 bil while imports stood at RM766.07 bil, up by 21.2%.
Meanwhile, the trade surplus rose by 13.6% yoy to RM89.98 bil during the period under review. Much of the achievement was driven by various efforts by the government and the private sector.
Matrade CEO Mohd Shahreen Zainooreen B Madros says: “It is crucial for the local business fraternity to meet so they can compare notes and most importantly, identify what are the things they could do differently to help them become export champions.
“All export champions started small and for them to emerge and succeed amidst various challenges in the world, catering to demand from millions of people, that is something useful for us to learn from.”
Matrade will be working on 397 programmes. They comprise 46 export promotions, 280 exporters’ development programmes, 44 training programmes and 27 collaborative initiatives.