Author:
Khor Soon Yee, Chief Consultant, S.E.A. Direct Sales Consultant
Leo Wei Ching, Chief Consultant, S.E.A. Direct Sales Learning Portal
Direct Sales is a social-network business and for an ambitious and great minded Direct Sales company, expanding business to overseas markets is necessary to achieve greater business territories and growth. But then the question is which country should the company choose when intend to expand its business further from home country?
Although Malaysia is not a big country, but why it became a popular bridgehead that many Direct Sales companies from countries like China, Taiwan, America, Japan, Canada and etc select to launch their overseas markets here? Why many top and foremost Direct Sales companies in the world listed Malaysia as a point of battle? What are the advantages Malaysia has that greatly attract Direct Sales entrepreneurs to swarm into this country?
The Heart of South East Asia
South East Asia (S.E.A) has a total population of 500 million, which is approximately 40% of China’s population. The area coverage consisted of two geographic regions, the mainland and islands arc that made up of multi-countries with multi-racial and multi-lingual societies. Direct Sales has becoming very popular within this region with more than 15% of its population involves in this business. However, majority of the Direct Sales companies that actively participate in the S.E.A. markets are founded in Malaysia. If not, the company is initially set up in Malaysia and by aids of its advantages later then expanded to other S.E.A. countries such as Indonesia, Singapore, Thailand, Philippines or Asia countries like India and etc.
30 Years of History in Direct Sales
Even though Malaysia has only 26 million of population, it has the longest history in Direct Sales among the South East Asia countries and the most popular country chosen for Direct Sales business. In Malaysia, there are about 500 companies involve in Direct Sales business with 200 are single-level marketing companies while the remaining 300 are multi-level marketing companies. The average annual revenue of Direct Sales industry in Malaysia is approximately 6 billion Ringgit Malaysia, i.e. equivalent to about 12 billion of China Renminbi. With this, Malaysia is ranked the eleventh in the world’s Direct Sales top revenue listing.
Multi-Lingual Capability
Malaysia is a multi-racial country where the population is generally proficient in speaking a minimum of three languages. Bahasa Malaysia is the official language of this country, yet many Malaysians are generally good in English language too. The reason being is Malaysia was British colony before its independency. In addition, Malaysia has a sizeable Chinese community which accounted for 25% of its total population. Therefore, the Malaysian Chinese can master much better Mandarin compared to other countries in the S.E.A. region. Also, the Malaysian Chinese can speak at least two Chinese dialects where Hokkien, Cantonese and Hakka being the most common dialects spoken here. While the Indian community which has a population of 7.5% speak in Tamil or other Indian languages. With this multi-lingual capability, Malaysian Direct Sales Entrepreneurs can then have an advantage to communicate and interact more effectively with people from various countries. Those who can communicate in Mandarin, Hokkien, Cantonese and Hakka can access into China Mainland, Hong Kong and Taiwan; those who are proficient in speaking Bahasa Malaysia can penetrate Indonesia market while the English speaking groups can tap for Philippines market. The Tamil speaking groups will help to venture into India market. For Malaysians who are residing along the Malaysia-Thailand boarder and has capability of communicating in Thai language will have an added advantage in Thailand.
Management Experts
Malaysia has over 30 years of history in Direct Sales and is considered a matured market in this region. Many experienced management and marketing experts have been built up through out these years. Generally, Malaysian society shows positive altitude towards Direct Sales industry and this indirectly has helps to attract large numbers of experts who possessed qualification in business and administration to join in the industry and contribute in company’s management. Many international Direct Sales companies also picked up Malaysia as a centre to train and develop their managerial and executive staffs and later then reassign them to overseas offices to hold responsibilities in the company’s management.
Strategic Geographical location
Malaysia is strategically located at the heart of South East Asia. Hence, it is an added advantage for Direct Sales companies to set up their business bases here and from here they can then further expand business to other neighbouring countries. In addition, Malaysia has the largest and the most complete aviation facilities in S.E.A., the Kuala Lumpur International Airport, which provides easy access to all over the world with its international flight services. This undoubtedly has made Malaysia a central meeting point for a stream of Direct Sales entrepreneur.
Government Supports
The Government of Malaysia is fully supporting Direct Sales industry and welcomes foreign investors who aim to set up their offices in Malaysia. However, to have effective management control and ensuring proper running of the industry, Malaysia’s Government had enforced the Direct Sales Act 1993 to regulate this industry. This will ensure effective and better protection on consumer and trader rights. It also ensures healthy growing of Direct Sales in this country. Stated under this Act, all Direct Sales companies who intend to operate business in Malaysia, have to acquire an approved Direct Sales license from the authority concerned. And for those companies who already have licenses and contemplate to open up new markets in neighbouring countries, they can have better access and favorably received in these countries.
Muslims’ Market
Over 50% of Malaysia’s population is Muslim. Nevertheless, Malaysia is not an Islamic country but a multi-religious society. Therefore, it has a more open government policies and laws in comparison to Islamic countries. But because Muslims form the majority of its population, Malaysia has also built up good relationship with most of the Islamic countries around the world. For this reason, Malaysia is indeed a good choice of country to open up new market in Islamic countries. Many companies capture Malaysia’s Direct Sales market as a stepping stone to introduce their products into these Islamic countries and yet their products are not promoted via Direct Sales schemes.
Basic Infrastructures
Other than the above said advantages, Malaysia also serves as a good environment for investment. To encourage and attract more foreign investors to enter and station in Malaysia, the Government has taking much efforts in implementing polices and rewards measures. For example, the income tax for company is imposed at a range of 20-27%. Besides that, the agreements set in AFTA removed taxation for products that flow in between the S.E.A. region. This has allowed more free flows in business between these countries and to facilitate formation of a free trade zone in S.E.A. region.
In addition, the political stability, basic infrastructures such as communication, traffic and transport, strong buying power, and friendly and warm nature of its people has made Malaysia a “Kingdom of Direct Sales”.
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