3 developments to watch in Malaysia’s tech space in 2023

Today’s column will be the last one for the year. And just like that, I’m also celebrating my first anniversary with Tech in Asia. Believe it or not, it’s the first time in a long time that I haven’t been sued over my reportage.

Ninja Van and other tech-savvy logistics firms have disrupted the Malaysian courier scene to the point of putting older players out of business. Photo credit: Ninja Van

Not that I’m pining for a suit – in case some of you want to get creative – but it’s certainly a respite. Calm before the storm, perhaps? Maybe. For now, I’ll wind down knowing that 2022 has been kind to me.

Writing today’s column comes with a major limitation: There’ll be no talking heads as many are holidaying. But cadence is the bread and butter of a weekly column, so we’ll just have to dance, even if it’s with two left feet.

As we ring in the new year in nine days, here are three developments I’ll be watching out for as part of my coverage in 2023:

The last-mile logistics race to the bottom

This is a tale of incumbents and disruptors. The former consists of older logistics players and the latter of tech-savvy upstarts.

The old dogs have been taking a beating over the past couple of years – not only because of the Covid-19 pandemic but also due to a so-called price war that is afoot, especially in the courier services space.

Some that have had to bear the brunt of this competition were or are industry stalwarts.

Nationwide Express was delisted from the Bursa Malaysia and ceased operations on November 16 after 37 years, ostensibly due to competition. They retrenched 1,100 staff members.

Another listed player, CJ Century Logistics Holdings, sold its loss-making courier arm last year for 7.5 million ringgit (US$1.7 million), while other public companies, GD Express and Pos Malaysia, have posted consecutive quarterly losses over the past three years despite heavy demand for courier and last-mile delivery services.

The main reasons: newer, tech-savvy players such as J&T Express, Lalamove, and Ninja Van or ecommerce platforms such as Lazada and Shopee that have launched their own delivery services – aside from the pandemic, of course.

How long can the newbies burn cash to capture market share? Will they eventually stumble like their older counterparts? And what will the country’s regulators do about Pos, a state-owned company?

To truly understand the last mile, you need to step outside the Kuala Lumpur bubble and venture to places like Ipoh, Malacca, Kuantan, or even Kota Kinabalu and Kuching.

It’s amazing how ecommerce has boomed in Tier 2 cities, but herein lies the challenge: How do you make it commercially viable? Transporting goods to these cities is no easy feat.

More data leaks?

Consolidation of government-backed VCs