SHARING ECONOMY VS TRADITIONAL BRICK AND MORTAR IN THE 21ST CENTURY – BY NIK ZAFRI

 

The 21st century has seen a dramatic shift in how businesses operate, with the rise of the sharing economy challenging traditional brick-and-mortar businesses. The question of which is better depends on various factors, including industry, customer preferences, and economic conditions. 

(I still notice that many Malaysians are reluctant to use the simple Touch ‘n Go eWallet, citing reasons such as avoiding “taxes” (without realizing the benefits of the point system) and using “political excuses” (despite the fact that both high-ranking officials from the ruling government and the opposition also utilize it).

SO, WHICH ONE IS BETTER

Well, empirically speaking for a person who have been in both shoes - it all goes back to the industry and business model. You can't simply shift drastically from brick and mortar to sharing economy just because your competitor are doing it - what you need is Proper Planning.

• For services and rentals (transportation, accommodation, freelance work) → Sharing Economy is winning due to flexibility and lower costs.

• For products requiring a physical experience (luxury retail, dining, personal care) → Brick-and-Mortar still holds value due to customer trust and experience.
• For hybrid models - personally speaking - I would prefer this model (restaurants using food delivery apps, physical stores with online platforms) → The future may lie in a blended approach, where traditional businesses leverage digital tools.

Ultimately, businesses that adapt and integrate technology into their models - whether they are in the sharing economy or traditional sectors - will thrive in the 21st century.

(Your choice - and don't say "capital" or "money" as an excuse - there are so many resources available, as long as you want it)

RETAIL AND E-COMMERCE SECTORS IN MALAYSIA FROM 2023-2025 AND HOW AI IS BECOMING THE GAME CHANGER – OVERVIEW BY NIK ZAFRI

Between 2023 and 2025, Malaysia's retail and e-commerce sectors have experienced significant growth, driven by technological advancements, evolving consumer behaviors, and supportive government initiatives. 

1.0  Growth Trajectory

1.1 Market Expansion

In 2023 alone, Malaysia's e-commerce market reached approximately $10.2 billion, marking a 12.2% increase from the previous year.

Projections indicate that by 2028, the market will grow at a compound annual growth rate (CAGR) of 8.5%, reaching $15.7 billion.

2.0 Mobile Commerce Surge

The rise in smartphone usage has propelled mobile commerce, with mobile transactions accounting for over 50% of all online transactions. This trend is expected to continue, emphasizing the importance of mobile-optimized platforms for retailers.

3.0 Key Developments

3.1 Government Initiatives

The National eCommerce Strategic Roadmap (NESR) has been pivotal in promoting e-commerce adoption among small and medium-sized enterprises (SMEs). Between 2016 and 2023, approximately 1.51 million SMEs embraced e-commerce, enhancing their market reach and operational efficiency.

3.2 Alternative Payment Methods

In 2023, alternative payment solutions, including digital wallets and bank transfers, accounted for 35.7% of e-commerce transactions. This shift reflects consumers' preference for convenient and secure payment options.

4.0 Impact on the ASEAN Region

Malaysia's e-commerce growth significantly influences the broader ASEAN market. Among them :

4.1 Regional Trade Enhancement

The expansion of Malaysia's e-commerce facilitates increased cross-border trade within ASEAN, promoting regional economic integration and providing consumers with a wider array of products.

4.2 SME Empowerment

E-commerce serves as a crucial export enabler for ASEAN-6 micro, small, and medium-sized enterprises (MSMEs). Notably, 90% of these MSMEs reported that they would not be able to export without e-commerce platforms, underscoring the sector's role in regional economic development.

Conclusion

From 2023 to 2025, Malaysia's retail and e-commerce sectors have undergone substantial growth, driven by technological adoption, supportive policies, and changing consumer preferences. This progression not only bolsters Malaysia's economy but also contributes to the economic dynamism of the ASEAN region.

HOW ARTIFICIAL INTELLIGENCE BECOMES A GAME CHANGER IN RESHAPING MALAYSIA’S RETAIL AND E-COMMERCE SECTORS

1.0 AI and Digital Transformation in Malaysia's Retail and E-Commerce

1.1 Enhanced Customer Experience 

Malaysian e-commerce platforms are leveraging AI to personalize shopping experiences. For instance, Lazada utilizes AI combined with Augmented Reality (AR) to offer personalized skincare solutions, allowing users to analyse their skin and receive tailored product recommendations.

1.2 Operational Efficiency

AI-driven tools are streamlining operations. Shopee's AI chatbot, Sophie, managed 18 million chats in 2023, resolving 80% of cases without human intervention, thereby enhancing customer satisfaction and reducing operational costs.

1.3 Fraud Detection

Payment platforms like iPay88 employ AI to monitor transaction patterns, enabling real-time fraud detection and ensuring secure online transactions.

2.0 Government Initiatives

The Malaysian government is actively fostering AI development. In December 2024, it established the National Artificial Intelligence Office to spearhead AI policy and regulation, aiming to position Malaysia as a regional AI hub.

3.0 Impact on the ASEAN Region

3.1 Economic Growth

AI is projected to boost Southeast Asia's GDP by 10% to 18% by 2030, translating to nearly $1 trillion.

3.2 Digital Integration

ASEAN countries are increasingly adopting digital technologies, enhancing regional connectivity and economic integration. Initiatives like the ASEAN Digital Economy Framework Agreement aim to standardize electronic processes, facilitating seamless digital trade across member states.

Conclusion

In summary, AI and digital transformation are pivotal in advancing Malaysia's retail and e-commerce sectors, contributing to economic growth and fostering deeper integration within the ASEAN region.

DSP # 7 Public-Private Partnerships: Key Component to Creating A Mature Data Ecosystem - (in my view - Nik Zafri)

It was an incredibly enriching and valuable discussion. Both the speaker and moderator were exceptional. The Q&A segment was especially captivating, allowing for a fantastic exchange between myself, the moderator, and the passionate, deeply knowledgeable speaker, Mr. Ivan Mortimer-Schutts, showcasing his extensive experience in the field through thorough and passionate discussions on various topics.

I am particularly interested in the topics such as :

Fostering collaborations between governmental bodies and the public (with universities also playing a significant part) to promote conscientious data sharing involves multiple facets: creating awareness and educating the public. This effort necessitates establishing collaborative structures. Additional factors to consider encompass privacy and security concerns, policy formulation, engagement strategies, feedback mechanisms, ethical frameworks, incentivizing responsible data sharing, addressing challenges, and harnessing expertise to implement responsible data-sharing practices.

I observed the impending necessity for Malaysia to establish a civic society-focused entity dedicated to enhancing awareness regarding data, which would play a pivotal role in promoting responsible data practices. This organization would engage in educational and advocacy efforts, regulatory framework establishment, guideline formulation, governance, fostering data literacy, and providing legal support, especially for marginalized groups. Such an entity has the potential to empower individuals, foster trust, encourage dialogue, wield influence, stimulate economic growth, prevent misuse, and ultimately cultivate a culture of responsibility. However, there is a need for further research into successful models and case studies from other nations to adapt and tailor them to suit the Malaysian context.

Common concerns have also been addressed but suffice it to say, you can refer to this article of mine to know more.

https://nikzafri.blogspot.com/2023/11/concerns-on-national-data-sharing-policy.html

Good job Malaysia Digital Economy Corporation (MDEC), Malaysiakini BM , Digital News Asia and the Government of Malaysia.

CRYPTOCURRENCY, MINING, BLOCKCHAIN, DIGITAL SHARING ECONOMY FOR DUMMIES?

Many people are asking me to make my explanation simpler about cryptocurrency, blockchain, mining, digital sharing economy etc.

So, let me connect the "dots" for you - ABCD. Remember the word "cashless"?

Let's take an example : Grab (Please be reminded that I am simply quoting an example. It is not in any way imply that they are into blockchain and cryptocurrency - so don't sue me please :-) )

Let's say you pay for their services via Grab Pay, Grab Credits or Cash.

Paying = mining

You'll get back a certain amount of points - Digital Sharing (Economy)

Points = cryptocurrency

Cryptocurrency can be redeemable for discounted rides, buying food, delivery services etc.

When you redeem = payment from an e-wallet to e-wallet

Blockchain = is where the Grab app is placed, where all transactions are done - very high traffic and volume

Example no. 2 :

Touch and Go E-Wallet - linked to your Touch and Go Card and other services like RFID (Please be reminded that I am simply quoting an example. It is not in any way imply that they are into blockchain and cryptocurrency - so don't sue me please :-) )

You topup your Touch & Go e-wallet - what you have topped up is no longer deemed as cash - it is made to look like cash (psychologically speaking)

You purchase using QR code of Touch and Go E-Wallet - scan it and you bought the goods.

Your purchase = mining

You get a certain amount of cashback having done purchasing - Digital Sharing (Economy)

Blockchain= is where the Touch and Go E-Wallet app is located, high turnover. QR code IS related to en"crypt" (crypto) and blockchain.

As long as there is a win-win situation - whether you use your petrol card to redeem certain goods - it's known as "Digital Sharing" (and updated on your phone apps) - used to be known as "timeshare". Now even Timeshare is being absorbed into Digital Sharing Economy.

BUT - if you only or still on "sell-buy, buy-sell" concept of business - or having a beautiful website or apps - but you are still on the buying-selling basis - this is NOT Digital Sharing Economy - this is "Consumption Economy". Consumption economy will eventually make your business DIE!

It's what I called in the late 90s as "brick and mortar" business at the beginning stage of e-commerce despite it has a B2B or B2C. If the potential customer walks up to you and asked you, what do I get back by downloading your app? You said "nothing", you will loose your customer!!!

I haven't mention the impacts of doing business in the "Red Ocean" - not yet - if I am to touch on this issue - coupled with our lack of understanding on "cashless" or "digital sharing" or microentrepreneurs*, hmmmm. *It's not limited to RM200,000.00 turnover of sales with 5 workers, but it's MORE than that.

(personal note : Angry because of the extra RM2.00 charges for cash transactions on the bank counter? Ever wonder why than simply being angry without any proof to substantiate your agreement? Do you know what would be the impact on our currency whenever there is a US-China Trade Wars? So... READ and most important UNDERSTAND before you REACT. So, why do you think "cashless" is very important? How would it save economy?)