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Selling business solutions to Malaysia's ICT sector

New Zealand Tech Stories

29 April 2024

TW24 blog 480x270px Malaysia ICT

This article was originally posted by myNZTE.

If your business offering can help achieve Malaysia's goal of becoming a high-tech-driven nation and leading Islamic finance hub, you may find opportunities in the public and private ICT sectors. Here are some of them.

Malaysia's digital transformation

Malaysia aims to be a high-technology country by 2030 and has emerged as a vibrant hub for Information and Communication Technology (ICT) in the southeast Asia region.

ICT is the main sector for growth in Malaysia, making up 23.2% of the country’s GDP. It has an average annual growth rate of 9% over a 7-year period and is expected to rise by 25.5% in 2025.

The Malaysian Government and private sector look to digitalise operations across all major industrial sectors to secure its role in the global economy. With a rapidly growing digital landscape, the country presents many opportunities for New Zealand businesses looking to export ICT products and services.

Government initiatives and support

The government launched MyDigital in 2021, a national strategy to transform Malaysia into a digitally enabled and technology-driven high-income nation.

This is led by the Malaysia Digital Economy Blueprint, which includes digital transformation of the public sector, digitalisation of the economy, beefing up digital infrastructure, building talent, improving digital literacy and access to virtual education and a secure digital environment.

At the same time, the Ministry of Science, Technology and Innovation (MOSTI) has developed 17 technology roadmaps in areas such as AI, blockchain, electrical and electronics, advanced materials, robotics and vaccines. The government’s digital transformation effort is led by Malaysia’s Digital Ministry, formed to enhance Malaysia’s digital infrastructure, digital inclusivity and promote technology adoption through grants and programmes, like:

Opportunities for New Zealand businesses

Identify the gaps or needs of Malaysian companies in these areas and see where your business can meet them. This could be providing cybersecurity services to the government or upskilling IT professionals.

E-commerce market and digital payments

The digital payment landscape is shifting in southeast Asia, especially in Malaysia, as the e-commerce market experiences exponential growth. In 2023, the country recorded US$13 billion in annual gross merchandise value (GMV), thanks to consumers’ high internet usage and increasing popularity of online marketplaces. This is expected to grow to US$15 billion by 2025 as the country continues to improve its digital infrastructure to support the sector.


Opportunities for New Zealand businesses

Your business may be able to serve the needs of businesses operating in Malaysia's fast growing e-commerce market. Some of the biggest challenges facing e-commerce business owners in Malaysia are managing inventory and orders, being present across B2B and B2C selling platforms, balancing surge of demands and fulfillments, and tackling manual dependency for e-commerce operations.

And as Malaysia’s online consumer base continues to grow, consider offering innovative e-commerce solutions like digital platforms, payment solutions and logistics services to support local sellers. Interpersonal relationships and interactions are key to building online supplier relationships in Malaysia given its relationship-based business culture.


Government grants for digital adoption are available for foreign-owned companies with headquarters in Malaysia. The Malaysia Digital Economy Corporation (MDEC) provides grants up to 20% of total project cost or up to MYR 1 million or lower for foreign-owned technology companies headquartered in Malaysia that have demonstrated export readiness and are seeking to expand their global market presence.

Fintech and financial services on track to grow

Malaysia’s fintech market is growing, with its digital payments market expected to reach US$470 million in 2024. The central bank, Bank Negara Malaysia (BNM), has been enabling tech innovation in the financial industry. It launched a Financial Technology Enabler Group to support innovation, including a regulatory sandbox for local and foreign firms to test solutions in a live environment.

MDEC is the key agency supporting fintech innovation by spearheading various collaborative initiatives, co-working spaces and fintech booster programmes.

Opportunities for New Zealand businesses

The Malaysian fintech landscape is dominated by entrants offering payments and wallets. Other fast-growing but under-exploited segments are:

  • InsurTech (especially self-directed services and usage-based insurance)

  • Investment management

  • e-KYC (Know Your Customer)

  • RegTech solutions.

Local banks have moved to digitalise their own services or strategically partner with the burgeoning fintech start-up ecosystem.

Joint partnerships with leading financial institutions are the most common type of collaboration for fintech businesses. You can approach these institutions directly, via their platforms and incubators (e.g. MayBank FinTech, OCBC Open Vault Incubator), or through internal or public hackathons.

You can apply for the MDEC Global Tech Fund, which supports local and foreign companies to commercialise solutions.

Cybersecurity is a burgeoning opportunity

Malaysia is experiencing a surge in cyber threats, primarily in data breaches across several sectors as digital dependence increases. Cyberattacks like Infostealer Malware as a Service (MaaS) and Ransomware as a Service (RaaS) are common, even at big corporations with good cybersecurity measures. In the first half of 2023, the Malaysian Government sector was the most prone to cybersecurity issues and experienced the greatest number of data breaches, while its telecommunications sector leaked the highest volume of data.

Opportunities for New Zealand businesses

If your business specialises in cybersecurity solutions, threat intelligence and data protection, you'll discover that Malaysia is a receptive market to do business in. The country is investing heavily in cybersecurity to protect its digital infrastructure and sensitive data.

Smart cities and IoT integration to make Malaysia more sustainable

Malaysia is actively looking to develop smart cities by integrating Internet of Things (IoT) technology to enhance efficiency and sustainability. Its smart cities industry was worth US$480 million in 2022 and is expected to reach US$1 billion by 2028.

The country’s Smart City Framework (PDF) includes different industry areas like ICT, green tech, smart grid, transportation and infrastructure. The framework also addresses important policy matters related to 5G, cybersecurity and renewable energy.

Smart cities in Malaysia

Malaysia is part of the ASEAN Smart Cities Network (ASCN), a collaborative platform where cities from the 10 ASEAN Member States (AMS) work towards smart and sustainable urban development. The ASCN aims to help cities work together on smart development, promote projects that make financial sense with private companies, and get funding and support from ASEAN's external partners. There are 26 pilot cities in the ASCN – 4 cities are in Malaysia:

  • Kuala Lumpur

  • Kota Kinabalu, Sabah

  • Kuching, Sarawak

  • Johor Bahru, Johor

Other smart cities in Malaysia include:

  • Selangor – the city has a Smart Selangor Blueprint to improve quality of life through IoT solutions.

  • Cyberjaya and Putrajaya – Malaysia's first cities to be equipped with 5G technology.

  • Melaka – the city has smart metering for electricity monitoring, with a Smart City Advisory Council in charge of Smart City policies in the state.

  • Penang – the city implemented its Smart City Blueprint in 2018 and plans to accelerate its growth into a Smart City by 2030.

Opportunities for New Zealand businesses

If your business has smart city solutions – including solutions to foster the digital economy, improve public safety and support urban sustainability and resilience policies – consider engaging with stakeholders and communities to identify their needs and develop a solution that addresses their specific issues.

Malaysia's IT sector is a flourishing sector

Malaysia has a thriving IT services sector with a skilled workforce and is increasingly digitalising and automating its systems. The market is projected to reach US$5.02 billion in 2024, with an expected market volume of US$1.88 billion in the same year.

In recent years, the sector has seen significant growth – driven by customer preferences, market trends, and the presence of SMEs that are reliant on IT service providers – all fuelled by government grants, incentives and policies. Malaysian companies are also adopting digital technologies to improve their efficiency and competitiveness, which has led to a rise in demand for artificial intelligence, machine learning and robotic process automation.

Opportunities for New Zealand businesses

If your business has solutions in software development and IT consulting, you could outsource and tap into the talent pool in Malaysia. Collaborating with Malaysian companies could also provide you with cost-effective solutions and foster knowledge exchanges.

High demand for education technology services

Malaysia’s edtech and smart classrooms market is thriving as educational institutions actively embrace digital tools and technologies to improve the learning experience.

The pandemic sped up the adoption of online and blended learning and digital resources, including an increased focus on quality education, remote learning and personalised learning experiences, which is driving the use of edtech solutions. Edtech providers can offer a variety of solutions, from virtual classrooms to interactive learning apps, to meet the changing needs of students and educators.

The demand for interactive, engaging and efficient learning methods is a key factor, with smart classrooms and digital content playing crucial roles. In 2023, Malaysia’s Education Ministry launched its National Digital Education Policy to transform the national education system in line with global technological advancements. The 6 strategic pillars in the policy include:

  • Digitally Proficient Students

  • Competent Digital Educators

  • Visionary Digital Leadership Culture

  • Enabling Infostructure and Infrastructure

  • High-Quality Digital Content

  • Committed Strategic Partners.

Opportunities for New Zealand businesses

Look to collaborate with Malaysian educational institutions and corporations with your business’s e-learning solutions, online courses and educational technology services.

A top destination as a data centre in the region

Malaysia is quickly becoming a regional data centre and investment destination after improving its digital infrastructure with cable landing stations, underwater cables, 5G and improved fibre connectivity. In 2022, the country was the top destination for data centre investment with 11MW of take-up – the second highest being Thailand with 25MW. This was largely due to government-backed initiatives and land constraints in Singapore, a regional data centre hub.

In 2020, the Malaysian Government launched its multi-billion-dollar national digital infrastructure plan, Jalinan Digital Negara (Jendela), to improve the country’s digital infrastrcture and connectivity. This approach aims to:

  • Strengthen existing 4G networks and establish a solid foundation for 5G rollout

  • Build full-fibre networks for homes, businesses and government buildings for 98% of the population by 2025

  • Provide 100% 4G coverage with a minimum speed of 100 Mbps.

As of 2023, 5G has been rolled out in 61% of the country. Separately, cloud service giant Amazon Web Services announced a US$6 billion investment in Malaysia to strengthen its cloud service infrastructure by 2037.

Malaysia’s telecommunications market is expected to reach US$8.33 billion in 2024 and grow at a CAGR of 1.72% to reach US$9.07 billion by 2029.

Major companies operating in Malaysia’s telecommunications market include:

  • TIME

  • Celcom

  • Maxis

  • DiGi

  • Telekom Malaysia

  • Edotco

  • Sacofa.

Maxis, one of Malaysia’s leading telco companies, is using machine learning and AI to grow new revenue streams, improve operational and financial efficiencies, and detect and respond to business risks.

Opportunities for New Zealand businesses

Look into providing solutions to improve connectivity if your business specialises in telecommunications infrastructure development such as the expansion of 5G networks, fibre-optic installations and other high-speed broadband solutions.

Malaysia wants to be an Islamic finance hub

Malaysia aspires to be an Islamic finance hub and ASEAN (Association of Southeast Asian Nations) gateway. There are about 26 Islamic fintech players, including foreign players using Malaysia’s conducive enabling environment as a testbed before expanding to other Muslim markets.

Fintech solutions in Islamic finance are not only perceived as able to elevate efficiency and consumer experience, but to deliver value-driven and impact-focused products and services aligned with the intrinsic values of Islamic finance.

Opportunities for New Zealand businesses

Blockchain technology is a key opportunity given the centrality of transparency to Islamic finance principles. Other high potential areas are halal payment gateways, digital ah-rahn pawnbroking platforms, and Shariah-compliant alternatives to conventional fintech.

The MDEC launched the Islamic Digital Economy guidelines to support Shariah-compliant start-ups with capital, training and regulatory support.


Companies must use Shariah-compliant instruments to raise capital and have oversight from a registered shariah advisor.

Tips for operating in Malaysia's ICT sector

Strong government support

The backing from Malaysia’s government in growing its dynamic ICT sector makes it easier for New Zealand businesses to set up partnerships and contribute to its digital advancement.

Its location offers easy access to other countries

Malaysia is a stepping stone into ASEAN. It’s also an ideal and cost-effective testbed for New Zealand businesses interested in strategically expanding their business footprint in ASEAN. It’s strategically situated, and has robust infrastructure, connectivity and economic stability – including a holistic digital ecosystem and complete ICT support system for businesses.

Kuala Lumpur, its capital, is a leading centre for tech innovation

In a report by KPMG in 2021, Kuala Lumpur was regarded as the 9th best city in Asia Pacific as a leading centre for technological innovation due to its low costs, wide talent pool and good quality of life. The Kuala Lumpur metropolitan area is also home to many global corporations such as IBM, HP, Intel and Google.


Next steps

For more information on entering and setting up a presence in Malaysia, read the Malaysia market guide. Alternatively, get in touch with NZTE for more information.


This article was originally posted by myNZTE.

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