By Dr Omkar Prabhakar Dastane,, Senior Lecturer at School of Business, Monash University Malaysia.
The recent U.S. tariff on Malaysian imports has raised significant challenges for exporters. However, the Electrical and Electronics (E&E) sector remains a major contributor to Malaysia’s economy, accounting for over half of its total exports. With tariffs targeting high-impact products such as semiconductors, processors, and consumer electronics, Malaysian retailers can adopt smart, digitally enabled strategies to navigate this disruption. While tariffs apply across all sales models, including Direct-to-Consumer (D2C) and B2B e-commerce, retailers can leverage digital transformation to optimise supply chains, reduce costs, and maintain competitive pricing. For instance, utilising the U.S.-based fulfilment centres for D2C can help absorb tariffs upfront, streamline logistics, and reduce delivery times, while B2B platforms like Alibaba provide access to a wider range of global buyers, ensuring that Malaysian products reach customers across international markets.
To mitigate the financial impact, Malaysian retailers must integrate SMART technologies such as AI, blockchain, and data analytics into their operations. These tools can help forecast demand, optimise logistics, and improve overall efficiency. By developing value-added products, such as customisable or eco-friendly consumer electronics, brands can justify premium pricing and enhance perceived value in global markets. Additionally, enhancing packaging and integrating digital features like extended warranties or app-enabled services can further differentiate Malaysian products. Compared to other ASEAN countries, Malaysia’s robust electronics ecosystem, skilled labour force, and strong digital infrastructure provide a competitive edge. Moreover, working collaboratively with ASEAN counterparts in trade and technology will enable Malaysia to strengthen its position within the regional value chain,
creating synergies that help overcome global tariff pressures. Retailers must embrace smart marketing and digital transformation to move beyond mere price competition and offer high-value, tech-driven solutions that stand out in the global marketplace. Traditional global supply chains still dominate the electronics retail sector, though some players are beginning to adopt smart technologies. The shift remains uneven, highlighting an urgent need for broader digital transformation to stay competitive amid rising tariff pressures.
