Identifies common practices to be aware of when selling in this market, e.g., whether all sales material need to be in the local language.
Malaysian buyers—whether individual consumers or purchasing agents for businesses or the government—tend to be price sensitive. Concepts such as life-cycle cost analysis are not used or well understood, so a higher-cost product that is better quality will frequently lose out to a lowest cost product or the one that seems to have the most compelling discount. Malaysians are brand-conscious as well, so brand and reputation can successfully trump cost, but only once the brand is well known.
Trade Promotion & Advertising
Advertising approaches differ according to the market sector. For consumer goods, advertising techniques include the full range of online media [e.g., Facebook, Twitter], television, radio, newspaper, outdoor advert
isements, and other approaches. Extravagant product launches once deemed necessary only in Singapore, are becoming the norm in Malaysia. Due to health and religious concerns, there are prohibitions on most types of advertising for tobacco and alcoholic beverages.
Malaysia has more than 7 million TV households. Rising GDP and income levels translate to affordability of content, thereby favoring the growth of various TV platforms. The market’s cultural diversity gives rise to channels based on ethnicity and language for the three principal languages: Bahasa Melayu, Tamil, and Chinese. There are three government and four commercial (free to air) channels operated by Media Prima. With terrestrial digitization efforts undertaken by the government, this segment shows promising growth as leading broadcasters split up existing channels into genres. Advertising revenue will drive the transition and growth of channels. As for pay-TV, there are currently two providers: Astro and HyppTV.
Malaysia has several English-language newspapers, the largest being the New Straits Times and the Star. The primary business-oriented paper is The Edge. The major Malay-language newspapers are Utusan Malaysia and Berita Harian, while the most significant Chinese papers are Sin Chew Daily and China Press. There are also Nanban and Tamil Nesan for the Tamil language newspaper. Business-oriented magazines include Malaysian Business, Malaysian Industry, Malaysian Investor, Malaysian Entrepreneur, Malaysia Retailer, and Business Today. Published news on Malaysia are accessible through various sites, including MalaysiaNews.
A list of trade promotion events to connect U.S. and Malaysian business partners are found on the U.S. Commercial Service’s Exporter Portal website. Domestic trade fairs (as well as trade fairs in Singapore) provide U.S. firms with an opportunity to increase brand awareness and find trade partners. The following is a list of trade exhibition centers:
- Kuala Lumpur Convention Centre
- Malaysian International Exhibition & Convention Centre
- Sunway Pyramid Convention Centre
- Malacca International Trade Centre
- Setia Spice Convention Centre (Penang)
- Subterranean Penang International Convention and Exhibition Centre
- Straits Quay Convention Centre (SQCC)
- PECC Exhibition and Convention Centre
Primary trade event organizers include:
- United Business Media
- ABC Exhibitions
- AMB Tarsus Event Group
- C.I.S Network
Malaysians are price-sensitive and brand conscious. Several factors should be taken into consideration when determining appropriate product pricing, including the exchange rate, applicable taxes and duties, pricing differences between urban and rural areas, and transportation costs to more remote areas. There may also be some government regulations for specific industries that affect the price charged to customers and other end-users.
Another factor to consider is the standard of living in Malaysia. The country is one of the most affluent in the Southeast Asian region, which means that higher-priced products and services have a niche market. However, prices of general consumer goods should reflect the lower cost of living and purchasing power of the average Malaysian. The Malaysian Investment Development Authority (MIDA) maintains a table of prices of select consumer goods. This table is available by clicking here: MIDA (http://www.mida.gov.my/)
Also, U.S. exporters should generate a price survey of competitor products and services from both domestic and international firms. The U.S. Commercial Service in Malaysia can assist exporters by providing a Customized Market Research report that identifies explicitly competitive factors within the market sector or industry.
There is no one-size-fits-all formula for pricing. Depending on the product and the volatility of the market, most common pricing strategies are:
- Penetration pricing – where the exporter must work with their distributor(s) on pricing to attract customers and gain market share. The price will go up later once the market share is achieved. This pricing scheme is usually well suited for fast-moving consumer goods.
- Premium pricing – where the importer and distributor keeps the price of a product or service artificially high to encourage favorable perceptions among buyers, based solely on the price. The practice is intended to exploit the (not necessarily justifiable) tendency for buyers to assume that expensive items enjoy an exceptional reputation, are more reliable or desirable, or represent excellent quality and distinction.
Sales Service/Customer Support
Both corporate and individual customers expect high-quality sales service and after-sale customer support, like many other customers in markets worldwide. While it is not often necessary to establish a local branch or subsidiary, it is usually crucial for U.S. companies to have a local agent (especially those that are interested in exporting products or operating services continually). This agent should be available for clients to contact immediately should any problems arise. A virtual office is also an option for an offshore retail company looking for an entry into the market. Office space will be on a rental basis, and a representative will handle mails and calls.
For help locating Malaysian service providers to assist U.S. companies (i.e., legal, financial, accounting), please contact the U.S. Commercial Service in Malaysia.
AMCHAM was founded in 1978 as an international, non-profit, private-sector business association. It has more than 1,200 members representing nearly 280 American, Malaysian, and other International companies. The Chamber is affiliated with the Asia Pacific Council of American Chambers of Commerce (APCAC) and with the U.S. Chamber of Commerce, which is the largest Chamber of Commerce in the world.
The US-ASEAN Business Council advocates for U.S. corporations in Southeast Asia. Founded in 1984, the Council’s members include the largest companies operating in Southeast Asia, and range from newcomers to the region to companies that have been working in the area for more than a century. The Council leads business missions to key economies, convenes meetings with ASEAN heads of state and ministers, and participates in ASEAN ministerial meetings, such as the annual ASEAN Economic Ministers meetings. The Council is headquartered in Washington, D.C., and has six offices in Southeast Asia, including an office in Kuala Lumpur, Malaysia.
The FMM is Malaysia’s premier manufacturing trade organization. Since its establishment in 1968, the FMM has led Malaysian manufacturers in spearheading the nation’s growth and modernization. Today, as the largest private sector economic organization in Malaysia, representing over 3,000 manufacturing and industrial service companies of varying sizes, the FMM is the officially recognized and acknowledged voice of the industry.
The MICCI was founded in 1837. MICCI is the oldest chamber in Malaysia, representing close to 1,000 corporate members with over 30 different nationalities. They also organize and co-organize over 50 events with over 4000 participants annually. Recognized as one of the most active advocates for the business community, MICCI facilitates and supports its members in their goals to successfully elevate their businesses.
The NCCIM is the umbrella platform comprised of five major Malaysian private sector organizations concerned with commerce and industry. NCCIM was established in 1962 when four principal Chambers of Commerce united to form the United Chambers of Commerce of Malaysia. It was restructured in 1974 to include the Federation of Malaysian Manufacturers and was renamed the National Chamber of Commerce and Industry of Malaysia. As a non-profit and non-governmental organization (NGO), NCCIM’s role is to help represent the interests of the Malaysian business community on the domestic and international fronts. A key objective is to promote Malaysian exports and investments abroad, as well as to help attract foreign investors.
>Limitations on Selling U.S. Products and Services
Malaysia is not a party in the WTO Government Procurement Agreement. As a result, foreign companies do not have the same opportunity as some local companies to compete for contracts. In most cases, foreign companies are required to take on a local partner before their bids are considered. In domestic tenders, preferences are provided to Bumiputra (Ethnic Malay) suppliers over other domestic suppliers.
There are restrictions on media and advertising content. Regulations on media and advertising content are found here: Online Content Problems