Birmingham Insights on Asia – (6) Implications and Recommendations for Malaysian E-Commerce

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This comment is based on Anson Lim’s Dissertation, Export Intermediaries within The Modernized Structure of E-Commerce and The Prevalence of Internet Based Distribution Channels,written under the supervision of Prof. Michael Czinkota at the University of Birmingham, UK.

Continued:

Given the broad spectrum of online capabilities, assuming the combined roles of distributor and intermediary within the scope of a developing marketplace will enhance the exposure of intermediaries as well as ensure that profitability is aligned with long term exporter objectives. Motivational structures have offered incentives to intermediaries for their successes in foreign market though an increased capitalization and opportunity for contract preservation. The reality is that within the broadening online marketplace, these once outside participants may now integrate their services with distribution channels at a much lower cost incidence than setting up a brick and mortar establishment. As export intermediaries are active participants in the social and economic structure of Malaysia, their understanding of market operations gives them an inside advantage, one which enables rapid transitioning from middle-man to purveyor. The manufacturing relationship is contractually established; however, through integration of broader spectrum distribution channels, the intermediary firm will be protecting their investment and ensuring that products reach the consumers in a profitable manner.

In terms of technical service diversification as well as the incorporation of resource management techniques, the knowledge capital boasted by intermediary firms remains a leveragable asset, one which should be intimately integrated into operations offerings in the future. Such capabilities include consolidation services which reduce the overall cost of transport and distribution across Malaysia’s borders.

Secondly, research demonstrates that in spite of the emphasis which manufacturing firms place on technical expertise and knowledge capacities of intermediaries, practical application of such skill sets falls short of expectation. the expectation o f authority, and thereby, the transitioning skills which enhance the perception of intermediary value continue to challenge and evolution of skill and capacity in order to  accurately integrate the broad spectrum of changes which continues to alter Malaysia’s market. knowledge of tariff changes, pricing decisions a=, and technical support all fell within the lowest ratings among respondent intermediaries, and given the ease of transition from brick and mortar distribution to electronic online channels. these knowledge schemes offer opportunities to remain extremely competitive.

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