MARKET REVIEW ON SERVICE SECTOR IN MALAYSIA UNDER THE COMPETITION ACT 2010 BY YB DATUK ALEXANDER NANTA LINGGI MINISTER OF DOMESTIC TRADE AND CONSUMER AFFAIRS

Thank you, our esteemed emcee,

YB Datuk Rosol Wahid,
Deputy Minister of Domestic Trade and Consumer Affairs

Ybhg. Dr. Alauddin Sidal,
Deputy Secretary-General of the Ministry of Domestic Trade and Consumer Affairs (Domestic Market)

Ybhg. Tuan Mohamed Zahari Razali,
Deputy Secretary-General of the Ministry of Domestic Trade and Consumer Affairs (Consumer Empowerment)

YBhg. Dato' Seri Mohd Hishamudin Md Yunus,
Chairman of the Malaysia Competition Commission

Ybhg. Iskandar Ismail,
Chief Executive Officer of the Malaysia Competition Commission

Distinguished guests,

Ladies and gentlemen,

A very good morning to all.

1. First and foremost, I would like to start by saying how pleased I am to be here today to launch the Market Review on Service Sector in Malaysia under the Competition Act 2010. I want to extend my congratulations to the Malaysia Competition Commission (MyCC) for their success in completing the market review. This is a testament to the MyCC’s commitment to protecting the process of competition and interests of consumers.

Ladies and gentlemen,

2. We at the Ministry of Domestic Trade and Consumer Affairs (MDTCA) keep well abreast of consumer and price issues. We are aware that many concerns have been raised regarding the rising cost of living in Malaysia particularly since the MCO was announced back in March due to COVID-19 pandemic. The Ministry has taken many initiatives to alleviate the consumer and price issues including lowering the ceiling price of three-layer face mask, promoting “Buy Malaysia” and “Penjana Shop Malaysia Online” campaigns to support local small and medium-sized enterprises (SMEs). This is a start, but it is certainly not enough. Rest assure that Government’s main priority is always to put the rakyat first as they are the worthy assets of our nation.

3. The widespread of COVID-19 pandemic has prompted the Government to implement Movement Control Order (MCO), Conditional Movement Control Order (CMCO) and the on-going Recovery Movement Control Order (RMCO). Thanks to these plans, our nation is doing exceptionally well in curbing the virus.

4. Since MCO was first implemented, many people have started to adopt a new norm. Not only in personal hygiene, but also in buying behaviour. We have seen people are becoming more and more technologically literate in buying various kind of products using e-commerce services from small players like PasarSegar.my, Delivereat.my, Bungkusit, and Lalamove; to big players such as Lazada, Shopee, Foodpanda and many others.

5. For this very reason, Mr. Iskandar Ismail, the CEO of MyCC, will touch on the growing trend of e-commerce, adoption of new technologies, and consumers purchasing habits during the COVID-19 pandemic that contribute to the way WRT industry operates. For this particular market review, there are four (4) primary products has been identified using MyCC’s hybrid method of quantitative and qualitative analysis; and also with reference to studies carried out by other foreign competition authorities.

  1. Processed food and beverages
  2. Household cleaning products
  3. Personal care and toiletries; and
  4. Clothing

6.       Through this Market Review, we will get to know how Malaysia’s e-commerce segments become one of the fastest growing among Southeast Asian countries that helps redefining the retail industry landscape in this nation. I was informed that based on industry reports, almost 50% of the population are online shoppers. It should come as no surprise as how e-commerce been a significant factor in lower cost of goods and services that creates economy and consequently enabling more enthusiastic players in the market.

7.       It goes without saying that the study of economy and competition law are unsurprisingly complex. For that reason, I must applaud MyCC for being able to complete the report on schedule despite facing several setbacks due to the pandemic. Today, MyCC has proved to us that the on-going pandemic has not caused only a hindrance to our working culture or economy – if anything, it is shaping us to become more adaptable and resourceful in doing business. In other words, the businesses are becoming more competitive and innovative. This is in line with MyCC’s objective to foster and protect the competition process in Malaysia for the benefit of businesses, consumers, and economy.

Ladies and gentlemen,

8. What this market review does is looking into price competitiveness and anti-competitive conduct in the service sector to ensure that consumers are not being taken advantage of by unscrupulous businesses. This market review also suggests ways by which the country can facilitate structural reforms that ensures efficiency and resiliency including developing a comprehensive and structured plan for e-commerce within the wholesale and retail trade industry.

9. By identifying the level of competitiveness of the service sector as what the MyCC has done through this market review, it is hoped that this will enable consumers to have more choices in terms of the items that they buy, to have more quality products available to them in the market, and for these products to be price competitive. This report serves as a reminder to business operators to avoid engage in any anti-competitive behaviours at the expense of consumers and but to keep adapting to latest technology and situation instead.

10. In addition, the survey conducted shows that 93% of the micro and small companies solely depends on brick and mortar stores to conduct their business. As a result, this market review fully supports smaller enterprises’ endeavours to break into or expand the industry by utilising online channels and e-commerce platforms. It tries to promote healthier competition in the service sector which I am confident will support the continuance of entrepreneurship, increase the level of efficiency, and promote innovation amongst entrepreneurs.

11. In addition, this market review will be significant to regulators and relevant agencies in designing their policies to address these issues moving forward. As mentioned before, the Ministry has engaged and will continually engage with the MyCC in the future to identify any competition concerns in the services industry and how to solve these problems.

Ladies and gentlemen,

12. MyCC has engaged with many parties including government agencies, stakeholders, and industry players to ensure that this market review is as comprehensive as possible. With all the hard work put into it, I am confident that this market review will be beneficial to entrepreneurs, regulators, but most importantly consumers. I hope that with this report, we will move closer to the Ministry’s aim of developing a mature and ethical ecosystem for both businesses and consumers to thrive in.

13. Before ending my speech, I would like to reiterate again that the Ministry alongside the MyCC are committed to ensuring that the process of competition in Malaysia is safe from harmful behaviours and in order to achieve this, we need support from all relevant stakeholders. To put it simply, I fully support all of MyCC efforts in promoting competition in the market. Together, we can create a conducive environment for the benefit of all parties and the economy.

14. Without taking any more time, I would like to extend my gratitude to everyone involved for their contribution in completing this market review. Again, I want to congratulate the MyCC for their success in writing this report and towards making this occasion an eventful one. I wish you all a pleasant day and thank you for your kind attention.

Thank you,