CCM to get online merchants to register
Najihah S 
Resel (left) says Lazada has a specific standard operations procedure to ensure its merchants are trustworthy. Azleen says lack of knowledge is one of the reasons why merchants are afraid to register with CCM

In an attempt to boost the registration of online businesses, the Companies Commission of Malaysia (CCM) is drawing up guidelines on how and when entrepreneurs can register their business. In addition, CCM is taking new initiatives to work with large e-commerce players like Lazada and 11Street to step up registration.  

“This initiative will be undertaken via a memorandum of understanding with e-commerce companies in stages,” the commission’s CEO Datuk Zahrah Abd Wahab Fenner tells FocusM.

She adds the guidelines will also help merchants understand the method of registering and why they need to do it.

Zahrah explains that traders would be given a 30-day period to register with it after their business on an e-commerce platform, such as Lazada, becomes profitable.

The trader’s activities will also be monitored by the e-commerce firms involved. Traders who fail to register their business within the 30-day period can be dropped from the online platform, she says.


Protecting consumers

The aim of the initiative is to get online businesses to register and also to protect consumers in line with the Registration of Businesses Act 1956. CCM has already initiated discussions with some e-marketplaces.

“It involves online traders who sell products through the Lazada platform and will be broadened to other marketplaces,” Zahrah said.

Lazada Malaysia is supportive of CCM’s efforts in getting its online traders registered as this will provide some comfort in terms of their legitimacy. “Merchants who would like to register as business sellers (with Lazada) would need to produce their CCM business registration certificate. For those who would like to register as individual sellers, they need to share their identification (MyKad) to be verified,” Lazada Malaysia CEO Hans Peter Resel explains.

CCM is also organising roadshows and forums to get online merchants to register with the commission; using the carrot approach as opposed to using the stick. “We are creating a soft balance for the enforcement approach rather than just penalising. To track down unregistered (online) businesses, we also work with other agencies such as the Malaysian Communications and Multimedia Commission (MCMC) as well as the Immigration Department,” says CCM’s head of marketing Azleen Azmee.


Why register?

Online businesses have been required to register since last year. Unfortunately, the pace of registration has been poor.

As of end-August, only 57,072 have registered. Although it is not publicly known exactly how many online merchants operate in Malaysia, CCM says the response can be improved.

Looking at past records since 2015, Zahrah notes there has been an increase in online business registrations with an average of 1,000 a month. Thus, she reckons there are many online merchants who have yet to register.

According to Azleen, online merchants have to register as long as they have been profitable for more than 30 days.

“They (online merchants) are a little skeptical as they feel it is only an online business as they might also sell through social media sites. But they are unsure if they can be profitable enough. Still, it has to be conducted in accordance with the law. Hence, we are trying to encourage them to register.

“(The merchants) feel there are a lot of bad connotations when it comes to registering. They are afraid it will make their business more complex. It does not, and all they need to do is ask us questions and we will be able to reason with them on the importance of registering,” Azleen says, explaining that the registration will be for their benefit as they will be protected under the law.

In addition, CCM is also working closely with Malaysia Digital Economy Corporation (MDEC) to educate the masses, by participating in the MyCyberSale campaign. This campaign is touted as Malaysia’s largest online sale and is organised by the IT industry lobby group, Persatuan Industri Komputer dan Multimedia Malaysia (Pikom).  

Company representation and product branding are important when selling online. Azleen says online vendors should also be aware of their product branding and the company’s name which needs to be clearly stated on the website as well as other sites. “The branding might be different from your company’s registration, which is why businesses should clearly state (this) on the website,” she explains.

Then there are concerns on the legitimacy of online businesses and the level of privacy they provide to their customers in online transactions. It usually isn’t clear what level of legal protection is available for the merchants as well as for the consumer. 

With this in mind, CCM says the purpose of the registration is also to provide a safer buying and selling experience online as well as to standardise the merchants’ operations.


Omnichannel shopping

Lazada Malaysia says merchants have to focus on the whole online shopping experience. The company, for example, carries a specific standard operations procedure to ensure its merchants are trustworthy.

Resel says in an email interview that online retailers need to provide an integrated shopping experience.

“As we continue to be impacted by the digital economy, it is high time that Malaysian retailers ensure their marketing strategies provide customers with an integrated shopping and selling experience. Merchants can reap the benefits of omnichannel shopping, but only if they know how to attract and connect with their consumers,” he says.

Online merchants need to have other skill sets, such as financial prudence, other than being tech-savvy. CCM is now encouraging companies to register and submit their financial reports online.

From its MyCyberSale experience, CCM managed to ascertain that companies have not been submitting their financial statements or have not renewed their registration.

Azleen shares: “Some companies were not aware that they are required to submit financial statements as a requirement to join MyCyberSale. For instance, a company marketing manager applied to join MyCyberSale. However, he did not know that the financial department had not submitted the financial report. As a result, the company could not participate in MyCyberSale.”


Developing trust

Some online marketplaces have developed a method to increase the number of merchants on their platform while creating a standard for the merchants to gain the trust of customers.

Resel should know the challenges of online sellers when Lazada launched its #EveryoneCanSell campaign in September. “Our strategic partnership with esteemed companies and agencies in Malaysia in launching the #EveryoneCanSell programme will further enhance our support for SMEs in the areas of productivity, innovation and capability upgrading,” he said.

Under the campaign, Lazada hopes to attract 50,000 new merchants by the end of next year. 

In the campaign, Lazada partnered with SME Corp, CCM, Maybank and Telekom Malaysia Bhd to create an ecosystem in which merchants can expand or start their companies online seamlessly.

Under the programme, merchants will have full access to e-commerce training, easier business registration, enhanced internet connectivity with online tools and solutions, as well as financial support through loans and exclusive merchant accounts. The campaign kicks off on Nov 11.

Lazada also equips sellers to grow their businesses online by providing them with the know-how. Lazada University and Lazada Seller Centre have been created to offer online and offline classes for all levels of sellers.

Lazada University trains sellers on assortment upload – Upload your assortment to drive exposure though searchability, naming and categorisation.

It also covers optimisation of content where sellers can create rich content to improve searchability with good images and product descriptions.

This year, Lazada organised the Lazada Seller Conference 2017, which was attended by more than 3,000 people.


Accreditation scheme

CCM acknowledges that as a regulatory body, it needs to further cater to the business ecosystem by providing company intelligence related products. With this aim, it introduced in July a digital accreditation scheme for online businesses called Biztrust.

To be eligible for the Biztrust certificate, a seller needs to adhere to CCM’s rules. “You need to have a good standing with CCM and there needs to be a privacy (protection) disclaimer as well,” Azleen says.

With the accreditation, businesses can market themselves as having received CCM’s stringent qualifying procedure on their websites.

Beyond gaining the trust of consumers, it will also allow small companies to be noticed by larger corporations should there be any interest to form a partnership.

To help provide better networking among merchants and better trade intelligence, CCM is providing a directory specifically for business owners in Malaysia.

The service, called My Data SSM and launched last year, enables companies to execute due diligence on other companies for business purposes. Information such as company history, the shareholders involved and financial standing is available for a fee.

How online marketplaces deal with merchants

Another local name that is synonymous with e-commerce is Shopee Malaysia, which has managed to maintain a good reputation among merchants and buyers. Shopee provides free shipping in the country, encouraging more sellers to come onboard to sell on the platform.

FocusM talks to Shopee regional managing director Ian Ho, who shares some issues that the company faces when dealing with online merchants.

Merchant education, says Ho, is in demand especially on how to conduct an online business. “The biggest challenge with merchants is to educate them. Many merchants want to embrace the digital economy to expand their business but they need guidance. We have received (many) requests from individual sellers and merchants asking us to help and support their e-commerce platform.”

As a result, Shopee introduced a preferred seller programme, on an invitational basis to selected sellers with a proven track record, and help them with online commerce. Furthermore, Shopee University conducts courses regularly to help the vendors with various trading challenges, while its technical team is on hand to assist the sellers when they face difficulties using the platform.

Shopee also has a dedicated seller centre that guides sellers on product listing (mass upload and editing), shop setting (including shipping settings), managing orders (mass shipping, shipping individual orders, print waybills) and download sales reports.

Currently, Shopee has more than 150,000 active sellers and more than 300 brands. “We will continue to expand our seller database to provide more options for online shoppers and to help more offline sellers to embrace the digital economy,” says Ho.

This article first appeared in Focus Malaysia Issue 256.