Ibs

Front 1

Economy

Back 1

Malaysia recovering from currency backlash.

Imports have largely recovered from 2015 and has risen by 11.3%

GDP per capita PPP suggests in 2016 that there is a rising trend among the people’s cash output and it is expected to further rise by 4.9% in 2017.

Malaysia is slowly recovering as GDP and Imports both rise. Exchange rate however, is still weak to USD but it is expected to make a gradual recovery in 2017.

Front 2

Geography

Back 2

Malaysia has two geographical regions that are divided by the South China Sea.

The Peninsular Malaysia which is near Singapore and Thailand and Malaysia Borneo which is near Brunei and Indonesia.

Malaysia Borneo consists of the states of Sabah and Sarawak while Peninsular Malaysia hosts the capital city of Kuala Lumpur.

Malaysia Borneo has lesser cities and is more tropical in nature, with simpler highway networks while Peninsular Malaysia has a concentration of cities and towns along its coast with advanced highway systems.

So better to focus on peninsula

Front 3

Transport

Back 3

Malaysia has over 40 seaports today and 16 of which have container facilities. The largest port is also only an hour from the capital city, Kuala Lumpur.

Kuala Lumpur’s International Airport, cargo import and export procedures are fully automated.

there is an extensive highway road network throughout Malaysia and a huge concentration of it in left regions of Malaysia starting down from Kuala Lumpur

As for rail networks, currently only 10% of goods are transported using rail networks, however the government has noticed this issue and aims for 50% of goods using rail freight.

As for KL, in terms of the public, main transportation used are the highways and the efficient light rail and monorail systems. The scenario is typically the same as Singapore, being heavily used in the mornings and evenings by office workers.

Front 4

Communication

Back 4

mobile and cellular had the highest penetration rate of 134% with broadband following behind at 81.8, PayTV is surprisingly doing well at 78.4 despite emerging technology. Kuala Lumpur, Selangor and Johor had the highest broadband rates. Related trends observed in Communications industry and population usage include Digital Television instead of Analog TV and OTT services (digital services that bypass network operators) e.g. skype, twitch.

This is good for SCANTEAK in that Malaysia is multi-modal transportation friendly and is looking at improvements at transportation systems especially in railways. There is also the automation trend going on and extensive highway networks touching all major consumer cities. SCANTEAK may like to focus on television, web and mobile service mediums to reach out to consumers given that many are using these applications recently.

Front 5

Consumer buying habits

Back 5

SCANTEAK can rejoice in this area as their product nature hits home with 2 key buying concerns of Malaysians. Firstly, their products are necessity products and second being that SCANTEAK is online-shopping friendly. This fits with Malaysia consumer’s latest buying trends.

In recent years, consumers in Malaysia are highly price sensitive but brand conscious and concerned about quality.

Front 6

Product distribution

Back 6

it is recommended that distributing products in Malaysia should be better done through middlemen such as importers, distributors and foreign or local trading companies. However, the best options are to form a local distribution alliance with a Malaysian company or setting up a representative office. There is also the option of direct sales to companies as a channel as done by another MNC (SIKA Group).

We can also use middlemen for smaller volume distributions such as Horestco Malaysia, who provides immediate furnishing for fine-dining chain restaurants or establishments as well as teak wood furniture door-to-door delivery for the public. There is even a production facility available through Horestco.

This can be good for SCANTEAK to test the market in Malaysia by using a middleman capable of small volume distribution and production before forming any committed local alliances or representative offices.

We have also learnt that SCANTEAK possesses a DC in Malaysia which could be resourced to use for distribution in KL and Penang, hence saving costs of additional international freight. Capacity is not a problem according to SCANTEAK.

Front 7

Advertising and promo

Back 7

There is a 44 million USD revenue growth in Digital from 2016 to 2017 and likewise, an 11 million USD revenue growth in Social Media advertisements. But it is to be noted that according to a survey, the public trusts adverts from Newspapers (72%) and Television (70%) the most with online adverts e.g. banners, videos being in last place(s).

It has been widely recognized that Malaysia relies on mainly promotional pricing, coupons, discounts and occasionally free products. More specifically, trade show promotions and internet/mobile coupons and discounts. We can see from a popular Malaysian sale event site (bigSALE) which showcases many new and upcoming promotional events that Malaysian consumers have enough interest in promotional events

Front 8

Competitor

Back 8

In Malaysia, the greatest competitor to SCANTEAK would have to be Ethnicraft in my opinion, the company has also recently just expanded into KL at Homedec KL CC.

Both company’s products feature wood and specifically on teak but Ethnicraft uses oak wood in their product as well. Colour-wise, SCANTEAK’s products are always with a bright orange-brown tint while Ethnicraft uses darker more mature natural browns.

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Distribution-wise, both companies use e-commerce as well as retail stores. However, Ethnicraft focuses more on the online platform whereas SCANTEAK has more showrooms and retail outlets.

Lifetime Warranty, good customer reviews on multiple channels and complimentary services with the product such as delivery. Customer perception in general describes Ethnicraft as affordable, environmentally-friendly with uniqueness and excellent customer service.Distribution-wise, both companies use e-commerce as well as retail stores. However, Ethnicraft focuses more on the online platform whereas SCANTEAK has more showrooms and retail outlets. This shows that to compete with an already confident and popular global competitor in Malaysia, SCANTEAK will have to step up its game in terms of marketing with environmental plans as well as consumer engagement and customer service especially on social media where Ethnicraft rules supreme in reviews. Product-wise, customer’s perception is improving with its new designs.

This shows that to compete with an already confident and popular global competitor in Malaysia, SCANTEAK will have to step up its game in terms of marketing with environmental plans as well as consumer engagement and customer service especially on social media where Ethnicraft rules supreme in reviews. Product-wise, customer’s perception is improving with its new designs.

Front 9

Industry market potential

Back 9

In Greater KL (Klang Valley), the base population is 7.254 million with a 6% growth rate from the previous year and is estimated to have an 8% further growth by 2020. This reflects KL and its extension to neighbouring districts and towns such as Gombak. Assuming the public requires furniture, this is good for SCANTEAK as this means a larger potential consumer base in Malaysia in the future and still rising figures and demand for the furniture market there.

Malaysian furniture market is growing in recent years due to increase in furniture exports, housing units, new business players and rise of online shopping.

Front 10

Gov.

Back 10

No related wood restrictions in gov.

Basic import taxes and duties are due if SCANTEAK is planning to import into Malaysia and under facilities with Approved Trader or Warehouse Scheme, GST can be waived. However, if manufacturing in Malaysia, then MIDA (Malaysian Investment Development Authority) has certain incentives such as import duty exemption on raw materials, components, machinery and equipment and full income tax exemption to name a few.

Front 11

Conclusion

Back 11

Major Problems: Challenging competitors in Malaysia that SCANTEAK will have to find ways to address and in relation to that, a problem would be to gain trust of the Malaysian public who are highly price and quality sensitive in nature.

Highly populated and dense areas in cities such as KL may pose challenges in terms of delivering products to customers on time.

SCANTEAK’s social media marketing is very weak in comparison to its competitors and this is even more concerning given that the Malaysia market buys on trust, meaning higher rates, reviews and traffic on the company’s social media display, the more willing the market is to buy from you.

Major Opportunities: SCANTEAK’s product are necessity products and they are online-shopping friendly. This fits with Malaysia consumer’s latest buying trends. A rising market size for Furniture is always good and the trade show promotional nature as well as online promotion from SCANTEAK fits well with Malaysia’s love for trade show event and promotional pricing as well as online discounts and coupons. Malaysia’s government is serious about improving their multi-modal transportation system and especially their railways and highways with automation systems being in progress for development. A more efficient logistics and transport route & function will no doubt be an opportunity for SCANTEAK.