Malaysia

Reaching the consumers

Marketing opportunities

Consumer behavior

Consumers are more aware of the price than the prestige or quality of a brand.

Consumer profile and purchasing power

Although the GNP per capita is only 6 146 USD, the purchasing power of the Malays is one of the highest in Asia, and shopping is a favorite consumer pastime.

Consumers associations

Federation of Malaysian Consumer Associations
Era Consumer Malaysia
Federation of Malaysian Consumer Associations

Main advertising agencies

A list of the main actors is available on the website of the Association of accredited advertising agents (AAAA)

Distributing a product

Evolution of the sector

The Chinese are commercially powerful and dominate the distribution network. Trade is the center of small family businesses and operates from a complicated structure of suppliers, entrepreneurs and sub-entrepreneurs.
The most influential persons in the economic activity are the public administrators, the Malaysian entrepreneurs (not many) and the Chinese entrepreneurs (who hold the most important private groups of the country).
To sell your products in the country you should call on importers/distributors (who may be a local company), foreign trading companies (which offer better specialization and more technical services than local companies) or medium sized local trading companies. Other alternatives are commission agents, setting up a representative office or making a local alliance with a Malaysian company; the last two are the most recommended options.

Market shares

Supply stores: 85.7%, Chinese medical shops: 6.4%, groceries: 3.8%, drugstores: 2.7%, supermarkets: 1.3%, hypermarkets: 0.08%, cash and carry: 0.02%. Although hypermarkets, supermarkets and department stores are dominant in urban areas, local retailers and small traders represent 57% of the local market in terms of sales income. Hypermarkets represent 10% of total retail sales. Groceries and service stations represent about 9% of total retail sales and are located in the main urban centers.

Organizations in the retail sector

Malaysia retailers association

Market access procedures

International Conventions

Member of World Trade Organisation
Party to the Kyoto protocol
Party to the Washington convention on International trade in endangered species of wild fauna and flora
Party to the Basel convention on the Control of Transboudary Movements of Hazardous Wastes and their disposal
Party to the Montreal protocol on Substances that deplete the Ozone Layer

International economic cooperation

APEC, ASEAN, AFTA

Non tariff barriers

Import regulations in Malaysia are liberal compared to other ASEAN countries' regulations. Most goods can be freely imported under General Open License. Some specific sectors, considered as strategic, are protected by a system of restricted import licenses. Items covered under this category are the iron and steel industry, cement, the sector of the automobile and its components and also polyethylene and polypropylene.
The restrictions in import licensing also affect other sectors in terms of approval (electrical products) and sanitary items (foodstuffs or veterinary products), without being a protectionist measure.
Quotas are not frequently applied to imports and apply to certain products whose local production is favored (rice, meat, fruits and vegetables). In extreme cases (frozen chicken, eggs, liquid milk or sugar), if it is considered that the local production is self-sufficient, import is forbidden. There are other products that are forbidden or subject to special licenses for safety, religion or morality reasons.

Customs duties and taxes on imports

8.56%

Customs classification

The Customs classification of goods is based on the International Nomenclature of the Harmonised System. A majority of Customs duties are calculated ad valorem and are specific only in certain cases. Imported goods, except for machinery, its parts and components, are subject to a sales tax which varies between 5 and 10%. In recent years, duties have dropped and now fluctuate between 15 and 25%. However, certain sectors can be taxed up to 30%. The Customs tariff is high when the imported product is also locally produced (from 30 to 50 %).
In January 1996, Malaysia, within the ASEAN market, subscribed to the Common Effective Preferential Tariffs (CEPT) arrangements, which significantly increase the product list of the previous Preferential Trading Arrangements (PTA). The introduction of the CEPT is meant to accelerate the establishment of a free trade zone within ASEAN countries (AFTA - ASEAN Free Trade Area). Before 2003, all products integrated into the CEPT, will undergo a duty from 0 to 5%. Non-taxed farm products remain outside the agreement. There is currently a list of temporary exclusion for some products, in force until January 1, 2000.
Malaysia benefits from the Generalised System of Preferences, under which 14% of its exports are carried out.

Import procedures

The Customs classification of goods is based on the International Nomenclature of the Harmonised System. A majority of Customs duties are calculated ad valorem and are specific only in certain cases. Imported goods, except for machinery, its parts and components, are subject to a sales tax which varies between 5 and 10%. In recent years, duties have dropped and now fluctuate between 15 and 25%. However, certain sectors can be taxed up to 30%. The Customs tariff is high when the imported product is also locally produced (from 30 to 50 %).
In January 1996, Malaysia, within the ASEAN market, subscribed to the Common Effective Preferential Tariffs (CEPT) arrangements, which significantly increase the product list of the previous Preferential Trading Arrangements (PTA). The introduction of the CEPT is meant to accelerate the establishment of a free trade zone within ASEAN countries (AFTA - ASEAN Free Trade Area). Before 2003, all products integrated into the CEPT, will undergo a duty from 0 to 5%. Non-taxed farm products remain outside the agreement. There is currently a list of temporary exclusion for some products, in force until January 1, 2000.
Malaysia benefits from the Generalised System of Preferences, under which 14% of its exports are carried out.

The case of samples

Textile samples must be cut or stamped "commercial sample" and there must not be more than three of them.

For further information

Royal Malaysian Customs Department (RMC)
MATRADE (National agency for the promotion of trade)

Organizing goods transport

Main useful means

Train and truck are the most common means of goods transport.

Ports

The airline company Malaysia Airlines
The international airport of Kuala Lumpur
Website of railroads in Malaysia
The ports of Malaysia
The guide to transport in Kuala Lumpur

Airports

Kuala Lumpur Sepang International Airport
Penang International Airport
Langkawi International Airport
Kutching International Airport
Kota Kinabalu International Airport

Sea transport organizations

Bureau of maritime affairs

Air transport organizations

Department of Civil Aviation

Road transport organizations

Department of road transport (JPJ)

Rail transport organizations

Malaysian national railway company (KTMB)

Identifying a supplier

Type of production

The manufacturing industry (31.6% of GDP, WTO 2004) has long been the driving force behind growth. Electronics (semi-conductors, electronic equipment and telecommunications equipment) is the leading manufacturing activity, followed by the production of audio-video equipment, and office equipment. The manufacturing sector represents more than 80% of exports. Exporting industries, especially for electronic and electrical products, chemicals, and plastic and wood products, represent more than 70% of the index of manufacturing production. The manufacturing sector oriented towards the domestic market, which represents about 28% of the industry, includes mainly the manufacturing of metal products, products linked to building, foodstuffs and transport equipment. The mining industry (7% of GDP, WTO 2004) exploits tin, oil, copper, iron ore, natural gas and bauxite.

Business directories

Malaysia Business Directory
MalaysianBiz

Manufacturers associations of the main industries

Federation of Malaysian Manufacturers
Malaysian Plastics Manufacturers Association
Malaysian Textile Manufacturers Association   
Construction Industry Development Board Malaysia

Domestic Trade Agencies and their representations abroad

Malaysian International Chamber of Commerce and Industry
Malaysian Industrial Development Authority

Enterprises federation

Federation of Malaysian Manufacturers
SMI Association of Malaysia
Malaysian Industry-Government Group for High Technology (MIGHT)
Malaysian Textile Manufacturers Association (MTMA)