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11 Interesting Lessons I Learnt from Starting a Business in Malaysia

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Dutch start-up Saleduck recently opened an office in Malaysia and launched their online deal platform in Malaysia and Singapore. Commercial Manager, Rosanne Hortensius shares with The Asian Entrepreneur what she learnt about starting a business in Malaysia.

“We encountered many differences between starting up, and having, a business in the Netherlands and Malaysia. We discovered a lot of small (cultural) dissimilarities, like for example Friday being an important day for Islam people in Malaysia and Malaysian buildings missing a fourth floor as number four is considered the unlucky number. We also came across more important lessons that we will share with you.”

1. Malaysian English

Even though Malaysian English originates from British English, it is really not the same language. Malaysians use different grammer rules when writing and are prone to leave out determiners. Also “he carry” instead of “he carries” would be considered okay. In the beginning we thought we needed to revise English texts that were written by our Malaysian employees so it would be what we considered “correct” English. Now we realise Malaysian English is just its own language and we should leave it as it is.

2. Language allowance

In Europe we are not familiar with the so called language allowance that employees in Malaysia get when they speak a foreign language that is needed for the job. At first we thought the expected salary that people who speak a foreign language ask for was higher than what we had in mind, until we heard it was actually normal to get extra compensation for the fact that you speak a foreign language.

3. Resumes

We received an overwhelming amount of applications for our open job positions. A lot of them seemed really impressive at first. As an online discount portal, working with e-commerce channels sounded really promising to us when we read this in applicants resumes. When interviewing these applicants we found that working with e-commerce channels means quite something else in Europe than it does in Asia. In Europe we mean that you are familiar with for example e-mail marketing, affiliate marketing, social media advertising, retargeting etc, in Malaysia it can also mean that you answer customer queries through different channels, like social media, e-mail and online chat. Having “executive” in your job title could mean you have a really high position in Europe, while in Asia an executive is usually someone who performs operational tasks.

4. Business stamp

As a company in Europe, you can totally do without a company stamp if you don’t have one. In Asia, an stamp is required on most official papers like contracts. Having a document stamped with your company stamp brings more trust.

5. Business cards

While we use business cards in Europe, they are way more important in Malaysia. In the beginning we didn’t always think to bring our business cards to a meeting. Also the way of handing over your business card and how to receive one is quite different than what we were used to. It is really polite in Asia to hand over or accept a business card with both hands. Once you have a business card in your hand, you don’t just put it away like in Europe, but you have a good look at is and put it away carefully to show respect.

6. Many official holiday days

In the Netherlands we have some official holidays, but in Malaysia there are way more.

7. Hard copies

Registering for a company can be done within a day in the Netherlands and you can do most of the process online. We found that not everything can be arranged online in Malaysia and you will need hard copies a lot of times. Funny to us was that even for registrering for internet, the application process involved hard copies and phone calls.  

8. Small talk

We really like the food in Malaysia, and we found we are not the only ones. Malaysians love their food and are not shy talking about it. In Europe small talk is known to be about the weather, in Malaysia you can break the ice talking about Tosai or Nasi Lemak.

9. Online shopping

Online shopping is so common in Europe that most people are not even worried about online payments and delivery. In Malaysia a lot of people are hesitating to buy online as they don’t always trust online payments and they are afraid their package won’t arrive. That is why a lot of webshops in Malaysia offer payment on delivery, which does not really exist in Europe.

10. Traffic

Public transportation is really good in the Netherlands and also a lot of people go to work on their bicycles. We were not familiar with enormous traffic jams like in Kuala Lumpur and the fact that therefore it is really important for employees to have flexible working hours so they can avoid rush hour.

11. Build relationships first

While in The Netherlands it helps to build up a good relationship with someone, it is not alway necessary to do business. In Malaysia it pays off to invest in a relationship first before doing business together.

Callum Connects

Jason Feng, Co-Founder of Pillpresso

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Mr. Jason Feng is re-engineering the healthcare industry.

What’s your story?
I am an engineer at heart. I enjoy the process of problem solving and have been actively developing innovative solutions to existing problems. Me and my co-founder settled on the problem of poor medication adherence among the elderly. This was a problem which struck a chord with us because we all have loved ones who have to take multiple medications on a daily basis. The complex medication regimen, coupled with declining cognitive abilities of the elderly tend to exacerbate the lack of medication adherence, which may lead to disease relapse and hospital readmissions, ultimately increasing the burden to caregivers and the society.

What excites you most about your industry?
The problem of medication adherence is not a new one in the healthcare industry. In fact, lack of medication adherence is a well-researched problem in many countries. Solutions which have been developed to address this problem face three major issues:

  • Entrenched mindset within the healthcare system, many of which are used to and unwilling to change from the legacy systems which were implemented decades ago.
  • Complex nuances in healthcare delivery across different countries, making it hard to “copy” and “paste” solutions which have worked well in other areas.
  • Because poor medication adherence is multifactorial, and many solutions focus solely on a few aspects, and do not employ a holistic approach.

Nevertheless, entering this industry at this time excites me because we are in the midst of a global shift in healthcare models; one where the industry is moving away from a service-based model, towards a more value-based model. This shift means that traditional players such as insurance companies and pharmaceuticals are under increasing pressure from patients and payers to demonstrate the value of their products under real-world use. Medication adherence data is one crucial missing link in this puzzle to deliver better care to patients. Being able to build a business around these incumbents and pioneer a new way of care is something which I look forward to.

What’s your connection to Asia?
I am a Singaporean. Most of my experiences throughout my life have been in Asia.

Favourite city in Asia for business and why?
I have not worked in other Asian countries outside of Singapore, so I can’t comment on other Asian countries too much. Singapore has a relatively low barrier for starting a business, and all business rules and regulations are clear and transparent. The startup ecosystem is also rather comprehensive and easily accessible. Being a small country, Singapore has a very limited market for products and services. However, due to its size and efficiency, it serves as an excellent test bed for new ideas. Being a travel hub, travelling to other Asian countries is cheap and easy.

What’s the best piece of advice you ever received?
Fail fast, fail often. The greatest lessons are never learnt through success.

Who inspires you?
Elon Musk

What have you just learnt recently that blew you away?
Successful launch of Falcon Heavy and the recovery of the 2 side cores. The way the 2 cores landed was like something you’d only see in CGI. Very well calculated.

If you had your time again, what would you do differently?
Applied for NOC (NUS Overseas College)

How do you unwind?
Go rock climbing.

Favourite Asian destination for relaxation? Why?
Nepal. I’m an outdoors guy. Being able to trek around the Himalayas is probably the best form of relaxation for me.

Everyone in business should read this book:
Creative confidence, by the Kelly Brothers

Shameless plug for your business:
Pillpresso is an award-winning health-tech startup that aims to improve medication adherence. We’re developing a medication management system that empowers seniors to manage their medicines independently and deliver proactive healthcare in the community through technology. Comprising individuals with complementary skills across business, engineering and medicine, our team is driven by a desire to improve healthcare and the human condition.

Grand Prize Winner of the 2017 Tech Factor Challenge
https://www.opengovasia.com/articles/8072-top-4-grand-prize-winners-for-3rd-edition-of-ageing-in-place-tech-challenge-announced-in-singapore

Grand Prize Winner of the 2015 Modern Aging
https://www.channelnewsasia.com/news/business/3-teams-receive-s-125-000-of-seed-funding-for-elderly-friendly-i-8246318

How can people connect with you?
[email protected]

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started,
built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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Entrepreneurship

Will Financial Liberalisation Trigger a Crisis in China?

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The People’s Republic of China (PRC) has been liberalizing its financial system for nearly 4 decades. While it now has a comprehensive financial system with a large number of financial institutions and large financial assets, its financial policies are still highly repressive. These repressive financial policies are now a major hindrance to the PRC’s economic growth.

The PRC is at the beginning of a new wave of financial liberalization that is necessary for supporting the country’s strong economic growth. The country’s leaders have already unveiled a comprehensive program of financial reform, which includes 11 specific reform measures in three broad areas: creating a level-playing field (such as allowing private banks and developing inclusive finance), freeing the market mechanism (such as reforming interest rate and exchange rate regimes and achieving capital account convertibility), and improving regulation.

But could financial liberalization lead to a major financial crisis in the PRC? What would be the consequences for financial stability as the PRC moves to further liberalize its financial system? If the PRC repeats the painful experiences of Mexico, Indonesia, and Thailand, then it might not be able to achieve its original goal of overcoming the middle-income trap.

International experiences of financial liberalization, especially those of middle-income economies, should offer important lessons for the PRC. In our new research, based on cross-country data analysis, we find that financial liberalization, in general, reduces, not increases, financial instability. This powerful conclusion is valid whether financial instability is measured by crisis occurrence or by fragility indicators, such as impaired loans and net charge-offs. The only exception is that financial liberalization does not appear to significantly lower the probability of systemic banking crises, although it does lower the risk indicators for banks. These results have higher statistical significance and are greater in magnitude for the middle-income group than for the entire sample.

The insignificant impact on banking crises, however, should be interpreted with caution. One of the possible explanations is that under the repressed financial regime, the government supports banks with an implicit or explicit blanket guarantee. This reduces the probability of an explicit banking crisis, although the banking risks may be even greater because of the moral hazard problem. In fact, government protection of banks could also increase the probability of a sovereign debt crisis or even a currency crisis before financial liberalization.

If financial liberalization significantly reduces the likelihood of financial crises, especially in middle-income economies, then why did some middle-income economies experience financial crises following liberalization? We further investigate whether the pace of liberalization, the supervisory structure, and the institutional environment matter for outcomes of financial liberalization.

We obtain three main findings. First, an excessively rapid pace of financial liberalization may increase financial risks. The net impact on financial instability depends on the relative importance of the “liberalization effect” and the “pace effect.” In essence, what the “pace effect” captures could simply be the prerequisite conditions and reform sequencing that are well discussed in the literature. Second, the quality of institutions, such as investor protection and law and order, also matter. International experiences indicate that investor protection can significantly reduce the probability of financial crises. Third, the central bank’s participation in financial regulation is helpful for reducing financial risks during financial liberalization. This is probably because central banks always play central roles in financial liberalization, especially in the liberalization of interest rates, exchange rates, and the capital account. If a central bank is responsible for financial regulation, its liberalization policies might be more cautious and prudent.

Our research findings offer important policy implications for the PRC. (1) Further financial liberalization is necessary not only for sustaining strong economic growth but also for containing or reducing financial risks. (2) Gradual reform may still work better than the “big bang” approach, and sequencing is very important for avoiding the painful financial volatilities that many other middle-income countries have seen. (3) The government should also focus more on improving the quality of other institutions, especially market discipline, to contain financial risks. (4) It is better for the central bank to participate in financial regulation. The new regulatory system should focus exclusively on financial stability and shift from regulating institutions toward regulating functions. It should also become relatively independent to increase accountability.

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About the Author 

This submitted article was written by  and  of Asia Pathways, the blog of The Asian Development Bank Institute was established in 1997 in Tokyo, Japan, to help build capacity, skills, and knowledge related to poverty reduction and other areas that support long-term growth and competitiveness in developing economies in the Asia-Pacific region.

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