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International Resources: Global Market Profile: Malaysia

Malaysia

As part of its commitment to providing its members with market analysis and insight, PMA has compiled the following information about Malaysia from the BLANKIAN Ministry of Agriculture [NOTE: or whatever the name of it is] and Attaché Reports submitted by the U.S. Department of Agriculture’s Foreign Agricultural Service, as well as the CIA World Factbook, embassy sites, and business etiquette reference guides.

Fresh Fruit, Vegetable, and Flower Market
Consumer Trends
Entering the Malay Market
Trade Agreements
Food Standards and Regulations
Business Protocol
Export Business Reminders
Government Resources and related links

Fresh Fruit, Vegetable, and Flower Market

Fruit and Vegetable Market

Malaysia produces tropical fruits (notably pineapple) and fresh vegetables, although it also imports these items from markets such as Thailand and Indonesia to meet the demand. Vegetable imports are mainly supplied by China; imports amounted to US$198 million in 2006, led by turnips, cabbage, carrots, potatoes, and garlic. Vegetables are also imported from major markets such as Australia and Indonesia. China also supplies fruits such as mandarin oranges, apples, and pears to Malaysia. The United States exports apples, grapes, and oranges to the Malaysian market.

Major fruit imports supplied mostly by china are mandarin oranges, apples, and pears.

Fresh Flower Market

A little over 70% of cut flowers produced in Malaysia are temperate flowers and about 28.5% are orchids. Mahor temperate flowers produces are roses, chrysanthemums, and carnations. Orchids are an especially important cut flower export. The most popular orchid types that are grown are Dendrobium, Aranda, Oncidium, and Mokara. New markets for Malaysia orchids are being cultivated in the Middle East, Northern Europe, and East Asia. Existing markets such as Finland, Belgium, and Ireland are expanding.

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Consumer Trends

Malaysia has a population of about 26 million people and is one of the most developed nations in Southeast Asia. Approximately 61 percent of the population belongs to the middle- to upper-income group of consumers. Three major races account for most of the population: Muslim Malays make up about 60% of the population, a little over 30% are Chinese (who may be either Buddhit or Christian), and Indians comprise the remaining 10% and are mostly Hindus.

Religious affiliation has an impact on food consumption: Muslims do not eat pork and only eat certified halal meat products, and Hindus do not eat beef. Malaysians, and especially those living in urban areas, prefer to shop in modern retail outlets.

Lunch and dinner meals are made of mainly rice with two or three meats or fish and vegetable dishes. Malaysian households spend about 24% of their income on retail food purchases. The food market is becoming more sophisticated and is equipped with domestic and imported products. Due to a strong economic growth in the late 1980s and early 90s, major changes have taken place along consumer consumption and purchasing patterns. Malaysians are demanding higher quality items. Urban consumers are fairly brand conscious and prefer to shop in stores, which have a wide range of products. Hypermarkets and large stores are the dominant outlets for these products in urban/metropolititan areas. Traditional markets are losing popularity but are still important for buying fresh fruit and vegetables. Imports are usually oranges, apples, grapes, cabbages, onions, potatoes, and broccoli.

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Entering the Malaysian Market

Foreign exporters generally appoint local sales agents or importers to distribute their goods and make use of existing networks of wholesalers and retailers. It is also helpful for exporters to visit the market to develop business relationships, though some younger businessmen begin new business relationships with foreign suppliers with no personal meeting. It is always advantageous to survey the market and evaluate competition for products.

In addition to using the services of importers or agents, supermarkets and hypermarkets are good channels for marketing, distributing, and promoting products. Promotion is important to create consumer loyalty and awareness. It is helpful to aim for the middle- to high-end food service establishments. Appropriate packaging is also important.

Trade Agreements

Malaysia is a member of ASEAN along with Brunei Darussalam, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Malaysia also has free trade agreements with the United States and is signing an FTA with India in 2009.

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Food Standards and Regulations

Health and food labeling requirements are somewhat relaxed in Malaysia. Imported and domestically produced food items must be labeled in English or Bahasa Malaysia

Import permits are mandatory for a variety of products including meat, eggs, milk, plants, and wine. Permits from the Malaysian Department of Agriculture are necessary for plants and parts of plants for propagation, and soil.

Live plants and plant material must have a phytopathological certificate issued by the approved authority in the country of origin.

All food is subject to random checking and sampling at each of the 34 entry points throughout the country. International freight forwarders usually deal with documentation and other formalities with authorities.

Food Safety and Quality Division

Ministry of Health Malaysia

Level 3, Block E7, Parcel E

Federal Government Administration Center

Putrajaya 62518

Tel: +6-03-8883--3888

Fax: +6-03-8889-4971

Http://dph.gov.my

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Business Protocol

There are three main ethnic groups in Malaysia: Malays, Chinese, and Indians. The type of greeting you use depends upon the ethnicity of the other person.
Generally most Malays are knowledgeable of Western culture and so a handshake is normal. However, bear in mind that Malay women may not shake hands with men; men may also not shake hands with women and instead will bow while placing their hand on their heart.
Chinese will usually give a prolonged handshake. Women and men may shake hands, but the woman has to extend her hand first. Lowering the eyes during the greeting is a sign of respect and is practiced by many older Chinese.
Indians will shake hands with others of the same sex. When greeting someone of the opposite sex, nodding and smiling is usually appropriate.
Business cards are exchanged after introductions. If you are meeting Chinese, have one side of your card translated into Chinese, with the Chinese characters printed in gold. If you will meet government officials, one side of the card should be translated into Bahasa Malaysia.
Use only the right hand or both hands to give your business card, and examine any card you receive before placing it in a business card case. The respect you show someone’s business card is a sign of the respect you will show the person in business. Do not write on someone’s card in their presence.
It is helpful for the most senior person on your team to enter first so he or she may first greet the most senior Malaysian. This shows respect towards the Malaysians and also demonstrations respect for hierarchy within your own company.
Small talk is initiated before conducting business. For the first meetings, Malaysians usually will not deeply discuss business, but rather use the opportunity to build a rapport. Relationship-building is essential.
Meetings, particularly initial ones, are rather formal.
Never appear irritated or lose your temper
Non-verbal communication is extremely important. Malays may hint at something instead of saying it directly if that would cause the other person to lose face. Instead of saying “no”, they might say, “I’ll try”.
Silence is also important in communicating—pausing before answering a question shows one has given the question some thought and carefully responded. Many Malaysians consider the Western tendency to hastily respond to a question rude and thoughtless.
Malaysians may laugh at what may seem inappropriate moments; this is used to hide uneasiness.
If invited to a Malay home for dinner, you should bring pastries or good quality chocolates. Never give alcohol. If you give food, it must be “halal” (permissible for Muslims). Do not give toy dogs or pigs, which are considered unclean animals, to children. Avoid giving anything made of pigskin.
Do not wrap gifts in white or yellow wrapping paper, which symbolize death/mourning and royalty, respectively.
Present gifts with the right hand or both hands if need be. Gifts are usually not opened when received.
If are invited to a Chinese home, you should bring a small gift of sweets, fruit, or cakes and say it is for the children. Avoid giving flowers, which are used at funerals and given to the ill. Gifts are traditionally refused at first in order to show the recipient is not greedy, and are usually not opened when received.
Avoid giving scissors or knives, which symbolize a desire to sever the relationship.
It is extremely important to elaborately wrap a gift. Wrap them in happy colors (such as red, yellow, or pink) as opposed to white, blue, or black, which are mourning colors. Do not wrap a baby gift or decorate it with a stork; birds are seen as the harbinger of death.
It is better to give presents in even numbers, as odd numbers are unlucky.
If giving a gift to an Indian, offer gifts with the right hand only, or both hands if the gift is large. Avoid giving frangipani flowers, which are used in funeral wreaths. Gifts should be wrapped in red, yellow, green, or other bright colors, which are seen as bringing good fortune. Never wrap gifts in white or black.
Money is given in odd numbers. Avoid giving gifts of leather to a Hindu, and do not give alcohol unless you are absolutely sure the person drinks.
Gifts are usually not opened when received.

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Export Business Reminders

Use metric terms.
Ensure that all sales documentation is correct.
Be patient regarding requests for documentation, ingredients lists, production process, and quality assurance and respond to such requests with diligence and in a timely fashion.
Use letters of credit to reduce risk.
Hedge export values with your bank if you are concerned about exchange rate risk.
Set up wire transfers for payments.

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International Resources: Global Market Profile: Malaysia

Table of Contents

Fresh Fruit, Vegetable, and Flower Market

Consumer Trends

Entering the Malaysian Market

Trade Agreements

Food Standards and Regulations

Business Protocol

Export Business Reminders

Related Links and Government Resources