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 tend to be price sensitive, whether individual consumers or purchasing agents. Concepts such as life-cycle cost analysis are not well understood, so a higher-cost product that is better quality will frequently lose out to the lowest-cost product or the one that seems to have the most compelling discount.
Malaysians are also brand conscious, so product name and reputation can successfully prevail over cost, but only once the brand is well known. Companies should keep consider the cultural norms and standards of Malaysia’s distinct ethnic and religious communities. For example, to achieve a more significant market share, food products must be halal as most of the population is Muslim.
Using an Agent or Distributor
Most exporters find that using a local distributor or agent is the best first step in entering the Malaysian market. A local distributor is typically responsible for handling customs clearance, dealing with established wholesalers/retailers, marketing the product directly to major corporations or the government, and handling after-sales service. Exporters of services generally also benefit from the use of a partner. Sales to the government, GLC, or priority sectors require a local agent or a joint venture partner, usually a Bumiputra-owned firm.
Trade Promotion and 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 advertisements, and other approaches. Due to health and religious concerns, there are prohibitions on most types of advertising for tobacco and alcoholic beverages.
As a multicultural, multilingual society, Malaysia has newspapers published in English, Malay, Chinese, and Tamil.
Leading newspapers in Malaysia include:
· Berita Harian (Malay)
· China Press (Chinese)
· Nanban (Tamil)
· New Straits Time (English)
· Sin Chew Daily (Chinese)
· Tamil Nesan (Tamil)
· The Edge (English)
· The Star (English)
· Utusan Malaysia (Malay)
Business-oriented magazines include:
· Business Today
· Malaysia Retailer
· Malaysian Business
· Malaysian Entrepreneur
· Malaysian Industry
· Malaysian Investor
Several factors should be considered 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 average Malaysian’s lower living cost and purchasing power. The Malaysian Investment Development Authority maintains prices for selected goods.
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 necessary to establish a local branch or subsidiary, most U.S. companies at least have a local agent that clients can readily contact for product support. Establishing a virtual office to handle client inquiries and support is also an option for an offshore retail company looking to enter the market.
Local Professional Services
For help locating Malaysian service providers to assist U.S. companies with legal, financial, or accounting support, please contact the U.S. Commercial Service office in Kuala Lumpur.
Principal Business Associations
Malaysia boasts a range of business associations that can assist U.S. exporters. Some associations focus primarily on U.S. commercial interests, and others on Malaysian business issues. Some of the leading business associations include:
American Malaysian Chamber of Commerce (AMCHAM)
- Founded in 1978 as an international, non-profit, private-sector business association, the AMCHAM helps American companies succeed in Malaysia through advocacy, networking, and business support.
The US-ASEAN Business Council (USABC)
- Founded in 1984, the USABC advocates for U.S. corporations, leads business missions to the region, and convenes meetings with ASEAN heads of state and ministers.
The Federation of Malaysian Manufacturers (FMM)
- Established in 1968, the FMM leads manufacturers in spearheading the nation’s growth and modernization.
The Malaysian International Chamber of Commerce and Industry (MICCI)
- The MICCI, founded in 1837, is the oldest Chamber in Malaysia and is focused on facilitating and supporting its members in their goals to elevate their businesses successfully.
The National Chamber of Commerce and Industry of Malaysia (NCCIM)
- Established in 1962, the NCCIM is the umbrella platform comprised of five major Malaysian private sector organizations concerned with commerce and industry.
Limitations on Selling U.S. Products and Services
Malaysia is not a party to the WTO Government Procurement Agreement. As a result, foreign companies do not have the same opportunity as some local companies to compete for contracts. Foreign companies usually need to take on a local partner before bidding. In domestic tenders, preferences are provided to ethnic Malay, or Bumiputra, suppliers over other domestic suppliers.
Malaysia’s advertising industry is regulated according to various laws, regulations, codes, and guidelines. For example, all advertisements need to adhere to requirements for being legal, decent, honest, and truthful. In addition, advertisements cannot include hidden fees or inaccurate claims. The Advertising Standards Authority plays an integral part in the local advertising framework.