Internet Issues in Smes Malaysia

Topics: Electronic commerce, Internet, Marketing Pages: 15 (4064 words) Published: September 20, 2010
E-COMMERCE ISSUES AMONG SMEs IN MALAYSIA

TABLE OF CONTENTS

1.0Introduction1

2.0Internet Commerce – An Overview3

3.0The Small Medium Enterprises (SMEs) in Malaysia5

4.0Issues of e-Commerce among SMEs in Malaysia6

5.0Advantages e-Commerce for SMEs in Malaysia9

6.0Advantages e-Commerce for SMEs in Malaysia12

7.0Barriers to successful e-commerce application by SMEs in Malaysia14

8.0Conclusion16

References17

1 Introduction

Information and communication technologies (ICT) are radically changing the competitiveness of organizations (Cohen and Kallirroi, 2006). Brian (1998) defined electronic commerce as the use of electronic methods, means and procedures to conduct various forms of business activity in cyberspace, which he stated has become a priority for many corporations within the context of ICT, since managers see it as a way to overcome certain limitations of the traditional distribution channels.

There are many studies which showed that e-commerce development offers a promising way for business to meet the challenges of this dynamic environment. Electronic commerce provides effective and efficient ways such as gathering information rapidly about the availability of the products or services, evaluate or negotiate with vendors and so on (Jetol, Obit, Asing and Tanakinjal, 2005).

SMEs face many challenges especially in a globalized environment, including a lack of financing, low productivity, a lack of managerial capabilities, access to management and technology, and a heavy regulatory burden. In the Malaysian context, APEC Survey (1994), the SMI development Plan, 2001-2005 (SMIDEC, 2002), Ting (2004), the UPS survey (2005) and others showed that SMES face major problems such as lack of access to loans, limited adoption of technology, lack of human resources and competition from MNCs and globalization.

The purpose of this paper is to highlight issues pertaining to e-business, particularly with relation to SMEs in Malaysia. The specific objectives of this paper are stated below:

a) To present a brief overview of e-commerce and SMES in Malaysian context;

b) To highlights issues of internet businesses among SMEs in Malaysia; and

c) To explain the advantages of disadvantages of e-business for SMEs in Malaysia.

Internet Commerce – An Overview

The millennium era of the 21st century embraces a new way of doing business – the virtual trading or electronic commerce. E-commerce, as defined by Wigand (1997), is about the use of electronic connection to conduct economic activities while others. Turban, Lee, King and Chung (2002) added that e-commerce is about use of computer networks and the Internet infrastructure as a medium of business transactions. The World Trade Organization (1998) stated that e-commerce is about usage of the Internet as the Internet provides platform for companies to conduct exchange and transactions from e-mails, leisure reading, browsing to selling, purchasing and providing services.

Kalakota and Whinston (1997) expanded the definition of e-commerce, seen from four different perspectives: communication, business process, service and online. Lewis and Cockrill (2002) added two more perspectives: connectivity and adoption ladder. The connectivity aspect includes the use of web sites, e-mail or EDI whereas the adoption ladder focuses on the full business processes participation including messaging, online marketing, online ordering, online payment, order/progress/online sales support and e-business (Daniel, Wilson and Myers 2002).

According to Malaysian Minister of Energy, Communications and Multimedia during the launching of the National E-Commerce Expo 2002, business to consumer (B2C) and business to business (B2B) E-Commerce activities in Malaysia are set to increase its potential revenues by almost nine fold from USD1.5 billion in 2002 to USD9.4...

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