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Malaysia 2020 – expectations vs reality
January 6, 2020 News

 

We review some of the biggest tech news in Malaysia in 2019 and find out what we can expect from them in 2020.

Flying cars

2019 was a promising year in Malaysia, especially in technology. Innovations dominated the entire year with many new gadgets and technology making headlines around the country. The biggest news of the year, which caught everyone by surprise, was the government’s initiative to support the idea of the development of flying cars or super drones in Malaysia.

The idea was received with differing views from the public. While many found it a waste of time, there were those who felt innovations like this would make Malaysia recognised as a technologically developed smart nation. In fact, the confidence level on making this a reality was so high, that the minister in charge of overseeing the project even gave his word saying the car model would be ready for a test flight by the end of 2019.

The flying car would be based on a drone model. And Aerodyne Group, a company that specialises in drone technology, unveiled a scaled model to the public in early 2019. The mockery behind the model was beyond control with members of the public poking fun of it, some even saying the model looked like ceiling fans. Yet, Aerodyne accepted all criticisms and continued with the development, and we’re still waiting for a word from them on their test flight.

Towards the last quarter of 2019, there was talk of a maiden test flight for the flying car. But it wasn’t the model previewed by Aerodyne, but another China-based company partnering with a local company, Eastcap Berhad. Again, there was a setback as the flight permits for the flying car was not approved; thus no test flight was allowed, apart for a small lift-off and landing within a control facility for a private session which included the minister.

And with that, the story of the flying car ended as well. Hopefully, in 2020, we may get more news on the development of this project. But looking at the costs of developing this project, it seems most likely cars will still be grounded in Malaysia for now. As long as the developers are not using public funds for their projects, flying cars or super drones will be interesting to look into.

Drone Services

In 2019, Malaysian drone companies made headlines not just locally but internationally as well. From being recognised as one of the top 3 drone technology companies in the world, Aerodyne seems to be the most successful in 2019. The company now provides drone services for various use cases in Malaysia and the rest of the world. They have also been heavily involved in planning and implementing drone regulations laws in Malaysia and other countries as well.

Meanwhile, in Cyberjaya, residents were promised a drone food delivery service with the help of drones. Average Drone Sdn Bhd, a local company involved in the drone industry since 2014, launched their drone food delivery service in July 2019. As Cyberjaya was the only place in Malaysia where you can fly drones legally, the planned to have the food delivery service over a three-month trial period.

We were lucky enough to witness the demonstration of the drones delivering food during their launch. The company uses delivery drones, which are much bigger to the average drones used, to deliver the food which is stored in a compartment below. According to the company, delivery within Cyberjaya can be done in twelve minutes. While the trial launch seemed a success, no one has since been able to order food using the service.

In fact, we have not heard from them since. Which made us wonder, what actually went wrong? The idea was indeed very promising, especially in an area that allows you to use drones legally. Was it a problem with the technology? Were the drones not able to reach destinations safely? Was it due to regulations, compliance and safety standards not met? Or was it just because they ran out of funds? Again, we were left disappointed as this was one project that seemed to be very promising if successful.

Facial and license plate recognition

While the immigration department has been using facial recognition software for some time in Malaysia, the technology is still not widely used in other sectors. For crime, there has been a demand for authorities to use technologies like these to help detect criminals or curb criminal activities. Be it facial recognition or license plate recognition; the technology has proven to help authorities in capturing criminals in many countries.

For education, some universities have begun adopting facial recognition software for monitoring their students progress. The most notable ones include Sunway University, which library uses facial recognition for authorising students, and Asia Pacific University of Technology that uses similar facial recognition software for recording student attendants and progress.

License plate recognition is also now picking up in the private sector with shopping malls looking to make the most out of this. There have been several carparks in the city running this technology, with Sunway Pyramid being the first mall in Malaysia to run tests on license plate recognition with the aim to start in the first quarter of 2020.

What we would like to see is for more organisations and sectors to make more use of recognition technologies. It seems that we are still only at the basics of most of these techs while the rest of the world have gone to use them more efficiently. For example, license plate recognition software has been around for quite a while now, but here in Malaysia, we are only beginning to have a glimpse of it being used in certain industries.

The problem we feel lies not with the technology but with the implementation of it. Are consumers ready for changes?

E-wallets

For a country with a population of only about 33 million, we have close to 50 e-wallet service providers while China, which has a population of about 1.4 billion, only has two e-wallet service providers. Some may say it allows competition, but for most consumers, the more e-wallets you have, the more inconveniences you create as well. Imagine having to have multiple e-wallets for multiple payments and uses and having to remember the different passwords and amounts you have in each of them.

At the same time, the e-wallet penetration among Malaysians is relatively low. The largest e-wallet provider in Malaysia currently is TouchNGo with about a million subscribers followed by GrabPay and Boost. To increase the use of e-wallets among Malaysians, the government announced an allocation of RM450 million for an initiative that will see Malaysians aged 18 and above and earn less than RM100,000 receive RM30 through participating e-wallets.

The initiative is expected to give Malaysians exposure to e-wallets and how they can use it. While we applaud this initiative, we can’t help but wonder, did China do such an initiative to get their citizens to use e-wallets? Giving out cash goodies is always something the public would enjoy, but we feel that this initiative may not be the best way to get more people to use e-wallets in the long run.

With the Penang state government recently announcing that the state plans to go cashless by March 2020 for all government services, the use cases for e-wallets will only lead to more people adopting it. Perhaps if more agencies and businesses insist on cashless transactions, the adoption will grow faster. After all, cashless transactions are expected to be secure and curb money laundering problems.

Also, we feel that a proper way to implement this is to have a system that allows the use of multiple e-wallets. Currently, if you go to any outlets, you will find close to half a dozen e-wallet QR codes for you to scan based on your choice. As consumers, you would want that choice, but at the same time, it would mean you have to have cash in all your e-wallets as well.

Hopefully, in the near future, e-wallet providers can work together to come up with a universal way of usage instead of having multiple QR codes displayed everywhere.

E-Hailing services

Disruption from e-hailing services is felt all over the world. Grab is the largest e-hailing service provider in Malaysia and most of Southeast Asia as well. Yet, competition in the e-hailing service industry has also increased in the last couple of years. In 2019, we saw more players entering the e-hailing industry in Malaysia. But many of them were not able to really disrupt Grab’s dominance in the industry.

Even with the government implementing stricter regulations for e-hailing drivers, the service only saw an increase in demand, as it was only the drivers that were mostly affected and not the business itself. Grab is well aware of their position in the industry. Which is why when the government approved for two-seater e-hailing services, they knew this is going to be a game-changer.

Indonesian company Gojek and local company Dego Ride have begun operations this year, offering e-hailing services on two-seater motorbikes. While the service has only just begun, we expect both Dego and Gojek to give some competition to Grab, especially since these rides will be much cheaper and faster during peak hours. Having said that, Grab also launched their two-seater e-hailing services.

Moving away from e-hailing, 2019 also saw the increase in delivery services. Companies like Food Panda made headlines when they had issues over payment structures for their employees. Honestbee, a Singaporean delivery company, and one of the earliest to operate in Malaysia ceased its operations in July 2019 as well. This clearly showed that while there is a demand for food delivery services, especially with online delivery and apps allowing access, the business model is still not profitable enough for the companies. So much so that Grab Food announced an increase in their delivery charges.

In 2020, we hope to see both e-hailing services and delivery services continue to offer better value for their customers. Hopefully, these services will find ways to address the issues faced.

Blockchain, Cryptocurrencies and Digital Banks

Blockchain is now being used in more use cases than ever before. One example is in Malaysia, whereby blockchain is being used in agriculture in Sarawak. By providing pineapple farmers with enough data, blockchain is enabling them to plan their corpses properly based on the demand and supply as well as the weather and soil condition. The pilot project, which is done in collaboration between IBM and the Sarawak Multimedia Authority started mid-2019, is expected to see its first batch of harvest in the first quarter of this year as well. Should this project be successful, the model will also be used on other agricultural projects in Sarawak and also eventually be used in West Malaysia as well.

To be frank, when we first heard about this, we were a bit sceptical as well as to how Blockchain can be leveraged on agriculture. But as we looked deeper into the process and how the data is being used, the bigger picture is that farmers will be able to make a better income from this.

Meanwhile, Malaysia has finally given the green light for cryptocurrencies for trading. Luno is the first company with a license after being able to work with a local bank on this. Regulations in Malaysia seem to be moving forward and be more open to accepting new forms of technology. We hope this may be the start of more changes and regulation reviews when it comes to cryptocurrencies and blockchain in Malaysia.

At the same time, Bank Negara Malaysia plans to issue up to five licenses to qualified applicants to establish digital banks. The central bank said that digital banks are expected to offer meaningful access to promote responsible usage of suitable and affordable financial solutions. Of course, this will be subject to regulatory and compliance check in the Licensing Framework for Digital Banks.

5G

This is probably going to take a long explanation. Since the establishment of the National 5G Task Force in 2018, there have been lots of discussions and updates on the roll-out of 5G in Malaysia. But the most interesting announcement was made days ago when the Malaysian Communications and Multimedia Commission identified the pioneer spectrum brands for the roll-out of 5G. With this, we can probably see 5G in Malaysia in the final quarter of 2020, though it might only be in 2021 that we actually see the real impact of 5G.

 

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