KUALA LUMPUR, June 5 — The federal government is introducing multiple initiatives to encourage businesses to shift online as part of the Short-term Economic Recovery Plan (Penjana) announced today.

The move is likely motivated by the success of e-commerce in softening the blow the movement control order (MCO) dealt to local companies that were forced to cease operations for months in an attempt to contain the spread of Covid-19 in Malaysia.

Among these is RM140 million in matching grants under the Malaysia Digital Economy Corporation (MDEC) for technological training, seller subsidies and sales assistance.

"The government along with the private section will also conduct a ‘Shop Malaysia Online’ campaign to encourage Malaysians to shop online, with promotional codes and discount vouchers that will be given out on various e-commerce platforms,” Prime Minister Tan Sri Muhyiddin Yassin announced today.

The campaign will be supported via a RM70 million allocation from the government that will be matched by the private sector, he said.

Additionally, Muhyiddin said the government was also setting aside RM700 million for grants and loans to finance the digital transformation of small-medium enterprises (SMEs).

These include RM100 million in matched grants for SMEs that will be provided in collaboration with local telecommunication firms, RM500 million in soft loans for SMEs’ technological transformation, and RM100 million in grants for smart automation initiatives.

Muhyiddin explained that feedback from the business community after the economy reopened was that consumer demand has fallen sharply, which was compounded by some companies' technological shortcomings that made it difficult for them to make the switch to e-commerce.

"Consequently, the government decided to help every business, whether big or small, with these steps,” Muhyiddin said.