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As we push ahead with restrictive MCO, we are left to think about what is the "new typical".
There are organizations that are making the best out of a worldwide pandemic while others
battling to the point of conservation and shutting down. It's a difficult time for every one of
us. On 1st May, our Prime Minister said the nation lost RM2.4 billion every day during MCO
making the all out of misfortunes are in any event RM63 billion. Whenever delayed for one
more month, we will free another RM35 billion. The worldwide spread of covid-19 affecting
all the industries all through the world. However, there are a few industries has benefited
during this preliminary occasions.

Source: The Star, Edgemarket


Above shows the timeline of key events in Malaysia during Covid-19. Malaysia announced
its first confirmed cases of COVID-19 on January 25th 2020. As cases began increasing
around February, interim Prime Minister Dr. Mahathir Mohamed announced the Economic
Stimulus Package 2020 on February 27th. In March, a big jump in cases was seen, which led
to the Movement Control Order being imposed on March 18th.During the Movement Control
Order (MCO), businesses and stores deemed non-essential were ordered to suspend
operations. To limit places where people could gather, all schools, institutes of upper
learning, and houses of worship were ordered to be closed during the amount. There's also a
restriction on entry of all foreign tourists and visitors to the country.

Various rules for social distancing have also been implemented, like only allowing one
person per household to go away the house for matters like grocery shopping and shutting
roads in various parts of the country to limit movement. As at the time of this writing, the
MCO has been extended to the 28th of April, resulting in a cumulative duration of 6 weeks.
The virus has caused massive disruptions to both the supply-side and demand-side of
Malaysia’s industry. Thereafter, the travel restrictions imposed by many countries in March
also caused a huge drop by air freight supply as airlines began suspending flights. Spending
habits also changed after the MCO was implemented. People began saving more amid more
uncertainty over job security and income, and have instead been purchasing primarily
essential goods like groceries, household supplies and even health supplements. pedestrian
traffic to most physical stores reduced significantly and non-essential businesses were
ordered to cease operations during the MCO.

Ecommerce

There is a rise of profit in the ecommerce industry during the Covid-19 pandemic. Internet
shopping has become the standard as individuals decide to remain at home and just go out at
whatever point vital. As revealed by Digital News Asia, The Commerce Asia saw a flood of
149% year-on-year Gross Merchandise Volume (GMV) development in the main quarter.
The organization made a few inquiries its shippers and discovered there has been over 800%
deals increment in cooking machines, underpants and latex gloves. This demonstrates the
internet business industry is strong to continue current conditions.
Source: J. Müller; Frequency of online purchases among consumers during COVID-19
pandemic in Malaysia as of May 2020, by age group.

As per an survey directed by Rakuten Insight in Malaysia, two percent of the respondents
matured 45 to 54 expressed they bought online regularly as of May 2020. In correlation, 30
percent of the respondents matured 55 or more bought not exactly once per month. A similar
study shows that Malaysians made progressively online buys during the pandemic.

Malaysia has the 2nd highest e-commerce penetration rate within the ASEAN region. During
the COVID-19 pandemic, Malaysia’s e-commerce industry has expanded at a quick pace.
This accelerated growth is especially thanks to the rise within the number of internet buyers .
the expansion has also triggered the transformation of the Malaysian retailers’ business
strategy toward e-commerce and Internet-Of-Things (IoT). This has opened opportunities for
the most logistics drivers within the country like manufacturing, pharmaceuticals, food and
beverages, e-commerce, and third-party logistics sectors.

The PENJANA Short-term Economic Recovery Plan broadcasted on 5th June 2020 has
highlighted few supports for the Agriculture and Food sector, including:

 100% exemption on export duty on Crude Palm Oil, Crude Palm Kernel Oil and
Refined Bleached Deodorised Palm Kernel Oil (Effective date: 1st July 2020 – 31st
December 2020).
E-wallet

Cashless delivery has been the buzzword these days. As the riders go around and about, it is a
safer option specially to minimize daily contacts. Part of the movement control orders
enforced by the government centred on encouraging people to handle less cash. Malaysia has
already, by and enormous, become a less cash-centric society, with even many small corner
stores and services accepting cards and online payments. think about the youthful population,
quick access to the web and mobile phones combined with a growing security fear around
carrying large amounts of money, and you have a society primed for cashless payments.
Before the virus slowed the planet down, Malaysia already had around 7% uptake in e-
wallets and was expecting to hit approximately 16% by the top of 2021. The Coronavirus has
simply sped this up and helped those reluctant to go away their old ways behind to start out
using other ways to pay. Banks like Maybank and other payment services like GrabPay and
Touch’n’Go have all seen a rise in usage. The government’s reassurance and therefore the
introduction of e-payments for the normal Ramadan zakat (tithe) giving are all pushing the
adoption of this new thanks to pay. also as being safer than physically carrying cash, e-
wallets are offering more protection during the increased online shopping frenzy.

Although there’s a decline in a retail transaction, Touch ‘n Go sees healthy volumes for
essential services and online-based transactions. GrabPay Malaysia’s online transaction also
has increased 1.7 times than before. Simply put, more people are putting e-wallets to good
use.

Logistic Industry

The demand for parcel deliveries via Pos Laju has expanded over 35%. It used to get more
than 350,000 packages day by day and now it has reached more than 730,000. The update of
pending deliveries has made Pos Laju deprived to recruit new representatives/employees at
the earliest opportunity. As the coronavirus pandemic frames our new normal, one thing is
obvious if nothing else – logistics, the business activity of transporting goods to customers,
had risen to the position of being the key enabler for the digital future. As is, that trend is
racing towards us faster than ever before. The impact of the US-China trade war on the
availability chain has been a haul on the short and medium-term outlook for the worldwide
logistics sector. However, within the wake of worldwide lockdowns to contain the COVID-
19 pandemic, the main target had shifted again to the long-term prospects of logistics as its
importance becomes even more apparent. Taking a gander at the current purchasing
behaviour, we can expect that it is additionally happening to other logistic providers.

Here in Malaysia, one among the most important logistics players with a commanding market
share of fulfilment services within the e-commerce market is that the incumbent, Pos
Malaysia. Spearheading e-commerce for businesses through these challenging times, Pos
Malaysia was among the prominent panellists at the recent e-Dagang Expo (eDX) – a five-
day virtual expo hosted by MDEC with the support of the Ministry of Communications and
Multimedia Malaysia (KKMM). The 200-year-old company is embarking on a RM300
million digitalisation effort to enhance operational efficiency and stand apart during a highly
competitive marketplace. the large investment in technology are going to be crucial to its
ambition to be the nexus of a seamless and web-based e-retail ecosystem.

Meanwhile, other homegrown players, like GDex, have played a big role in advancing e-
commerce in Malaysia. Since 2016, the corporate had expanded its sorting hub capacity and
delivery resources to cater to rising volumes of e-commerce transactions. Fast forward
towards today, GDex already embraced digitalisation through its online shipping platform,
myGDEX, making it easy for social sellers to scale distribution and boost revenue,
particularly during these challenging times. In their bid to supply the simplest end-to-end
consumer experience, eMarketplaces like Lazada have started offering logistics and
fulfilment services under Lazada eLogistics (LEL), on top of operating an e-commerce store.
It also partnered with third-party logistics providers to make sure that the rise in volume of e-
commerce transactions are catered to. Additionally, Malaysia e-commerce landscape has also
seen innovative solutions offered by existing and new players in last-mile delivery services,
like DHL eCommerce and LWE Logistics; fulfilment management platforms, like iStore
iSend and EasyParcel; and other services within the supply chain like locker/mid-mile service
from Boxit and Collectco.

Sustainable growth and development within the nation’s logistics sector is critical for
commerce to thrive, especially in these trying times. Forward-thinking logistics players are
rapidly embarking on their digitalisation journey to satisfy fast-growing demand prompted by
the explosive growth in e-commerce. To shorten delivery time to drive greater efficiency to
be ready to compete regionally and globally, digitalisation is critical to make sure there's
seamless end-to-end data be due merchants to consumers and across all players within the
supply chain.

Streaming Service Provider

Source: Malaysian Digital Association

Above shows the study by the Malaysian Digital Association with its accomplice
SimilarWeb, there has been a mass movement of Malaysians to online services. With more
opportunity to save, there has been never an ideal chance. The study shows Netflix has
increased 195% in year-on-year development in traffic in the middle of March. It additionally
noticed that visits to Tonton bounced 232% in successive Covid-19 pandemic, while Dimsum
and Viu expanded by 140%.

Pharmaceutical

Everyone has been purchasing disposable face masks and hand sanitizer since the Covid-19
outbreak. The recent coronavirus (Covid-19) outbreak is expected to have least impact on the
Malaysian healthcare/pharmaceutical industry in the near term. Nevertheless, for the long
term, we believe growing healthcare/ pharmaceutical awareness arising from the outbreak
should be positive for the sector. According to Mr. Chin Keat Chyuan, President of the
Pharmaceutical Association of Malaysia (PhAMA), Malaysia are often a hub for innovative
medicine - Covid-19 vaccine. Malaysia is uniquely fitted to the event of latest innovative
medicines for several reasons, including geographic centrality within Asia, a talented and
sizable English-speaking labour force and comparatively low capital costs. Malaysia can
leverage this strong foundation to draw in foreign investments and drive our growing
healthcare industry. Early on, many pharmaceutical companies are at their limit due to the
massive demands. As Malaysian are settling into a new normal, the demands for
pharmaceutical products are expected to remain high.

Manufacturing Industry

Malaysia features a deep-rooted manufacturing sector but has an excessive amount of


reliance on the oil and gas Sector. Malaysia remains a beautiful investment destination, with
the supply of well-educated labour, investor-friendly policies and incentives, well-developed
Infrastructure and preferred entry to enter the ASEAN market. Malaysia’s technologically-
inclined economy is proven by the country's involvement in advanced industries like E&E
manufacturing, R&D, biotechnology, photonics, logistics, design, innovation, automotive et
al.

The COVID-19 pandemic has triggered the Malaysian Government’s actions in ensuring
smooth supplies of drugs, food and other essential goods. This shows short and long-term
opportunities for the Manufacturing sector, especially for the Medical & Health industry and
therefore the Food & Beverages industry. The PENJANA Short-term Economic Recovery
Plan announced on5th June 2020 has highlighted attractive tax incentives for a corporation
relocating into Malaysia, including:

 0% tax rate for 10 years for new investment in manufacturing sectors with capital
investment between MYR300 – MYR500 million.

 0% tax rate for 15 years for new investment in manufacturing sectors with capital
investment above MYR500 million.

 100% Investment Tax Allowance for 3 years for an existing company in Malaysia
relocating overseas facilities into Malaysia with capital investment above MYR300
million.
 Special Reinvestment Allowance for manufacturing and selected agriculture activity,
from YA 2020 to YA 2021.

 Manufacturing License approval for non-sensitive industry within 2 working days.

Despite the current economic uncertainties, Malaysia is still firmly preparing for the
implementation of the National Fiberisation and Connectivity Plan (NFCP), which aims to
improve the country’s digital connectivity by rolling out 5G in Q32020. Minister of
Communications and Multimedia mentioned that a reliable and affordable high-speed
broadband connectivity is the key catalyst for bringing in FDI into Malaysia’s digital
economy. The NFCP is also expected to have a positive impact on the Global Business
Services (GBS) in Malaysia by empowering the employees to work from home. In the
COVID-19 aftermath, the Malaysian Government is expected to improve the national
competitiveness, in terms of FDI by introducing more investor-friendly policies and
incentives.
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Local tourism will play a crucial role within the industry's recovery. Therefore, in its social
media posts, the Malaysian Tourist Board encourages locals, under the hashtag #TravelLater,
to travel in their own country after the crisis so as to spice up the local economy. "It may take
months for the tourism industry to get over the consequences of COVID-19 and that we need
all the assistance we will get to rebuild," said Datuk Musa Yusof, director general of Tourism
Malaysia. It offers the most chance for driving recovery, particularly in countries, regions and
cities where the world supports many roles and businesses. Malaysia is the second-most
favourite tourist destination in Asia after Thailand. About 26 million visitors annually, nearly
90% of whom are from within Asia, bring over MYR 86 billion in revenue (5.7% of GDP).

Tourism may be a significant a part of many national economies, and therefore the immediate
and immense shock to the tourism sector resulting from the coronavirus pandemic affects the
broader economy. As governments round the world have introduced unprecedented measures
to contain the virus, restrictions on travel, business operations and people-to-people
interactions have brought the tourism economy to a standstill. Many countries are now
entering a replacement introduce fighting the virus while at an equivalent time managing the
re-opening of the tourism economy. this is often a posh and challenging task, and quantifying
the impact on the tourism economy is difficult.

Tax exemptions and deferments

Travel agencies, hotels, airlines, also as businesses within the tourism industry, are going to
be given a deferment of their monthly tax installments for 6 months starting April 1, 2020.
Hotels also will be exempt from service tax from March 1, 2020, until August 31, 2020.

Discount vouchers for tourism


To support the tourism industry, the government has allocated US$113 million within the
form of:

Travel discount vouchers – the government, together with airlines, resorts, and hotels, will
offer discount vouchers of to 100 ringgit (US$22) per person, starting March 2020; and
Increased tourism promotion – 30 million ringgit (US$6 million) are going to be provided to
Tourism Malaysia, the country’s tourism board, to extend promotion on Malaysian tourism
within the Middle East , Europe, ASEAN, and South Asia.

Tax relief for domestic tourists

A special tax relief worth 1,000 ringgit (US$226) is out there to individuals for expenses on
domestic tourism from March 1, 2020, to August 31, 2020.

This is limited to entrance fees for tourist attractions and expenses on accommodations at
premises registered with the Ministry of Tourism, Arts, and Culture.

Travel picked up post-WWII as transportation infrastructure expanded, initially for the


movement of products. That trend has snowballed into a worldwide tourism industry thanks
to developments on both the demand and provide side. Demand growth arose from greater
wealth, more leisure and therefore the communication revolution. Supply expanded with
faster, cheaper and multiple modes of travel and accommodation. Travel wont to be a
pleasant and enriching experience for both guests and hosts. Perhaps the most important
mistake was governments stepping into the act. Tourism isn't an unmitigated good that
governments must promote and facilitate and encourage with incentives, overseas advertising
campaigns and even direct input of public money.

The impact of the crisis is being felt throughout the whole tourism ecosystem, and reopening
and rebuilding destinations would require a joined up approach. Tourism businesses and
workers are taking advantage of economy-wide stimulus packages, with many governments
also introducing tourism specific measures. Governments and industry are focusing their
efforts to promote local tourism amid the Covid-19 pandemic in Malaysia on:

 Lifting travel restrictions and dealing with businesses to access liquidity supports,
apply new health protocols for safe travel, and help to diversify their markets.
 Restoring traveller confidence and stimulating demand with new safe and clean labels
for the world, information apps for visitors and local tourism promotion campaigns.
 Preparing comprehensive tourism recovery plans, to rebuild destinations, encourage
innovation and investment, and rethink the tourism sector.

The effect of Covid-19 to tourism industry is evaluated using supply and demand curve. The
demand function is developed employing a few parameters namely tastes and preference of
customers, average income of certain countries, price setting of selected goods, customers
expectation, number of buyers and economic and environmental scenario. Demand function
is that the quantity of a good or service that individuals are willing and able to get during a
hard and fast period of your time. Demand function is an algebraic expression that shows the
functional relationship between the demand for a commodity and its various determinants
affecting it. Meanwhile, supply function is determined by important factors namely resource
price, production techniques, price of related goods, price expectations, supply stocks and
numbers of sellers. A supply function is a mathematical expression of the relationship
between quantity demanded of a product with price considering supplier perspective.

Figure 1: Changes of market equilibrium on local tourism (Malaysia)

Source: International Journal of Advanced Engineering Research and Science (IJAERS)


Figure 1 above shows the changes of market equilibrium after the decrement shift in demand
function. The new market equilibrium is with equilibrium price is 40 and equilibrium
quantity is 40 that represented as point B. Comparing to normal market equilibrium, the new
market equilibrium shows a decrease value in equilibrium price and equilibrium quantity of
the shift in demand function due to outbreak of COVID-19. Price elasticity of demand is an
economic measure of the change in the quantity demanded or purchased of a product in
relation to its price change.

Five months into the crisis, things continue to evolve and therefore the outlook remains
uncertain. Recovery is now expected to start out later and be slower than previously foreseen.
Travel restrictions and containment measures are likely to be in situ for extended, and are
expected to be lifted only gradually, with the likelihood of reversal should new waves occur.
Even when tourism supply chains start to function again, new health protocols mean
businesses are going to be operating at restricted capacity. Demand-side recovery also will
take a while, given the interlinked consequences of the economic and health crises, and
therefore the progressive lifting of travel restrictions, while consumer confidence and travel
behaviour are going to be more deeply impacted the longer the pandemic goes on. this may
have knock-on implications for several national economies.

These actions are essential, but to reopen the tourism economy successfully and obtain
businesses up and running, more must be wiped out a coordinated way as tourism services are
very interdependent. The travel and tourism industry and governments should still reinforce
their coordination mechanisms to accompany the companies, notably the tiniest ones, and
therefore the workers. Particular attention should tend also to the foremost
sensitive/vulnerable destinations within the recovery phase. Looking ahead, the measures put
in situ today will shape tourism of tomorrow. Governments got to already consider the long
run implications of the crisis, while staying before the digital curve, supporting the low
carbon transition, and promoting the structural transformation needed to create a stronger,
more sustainable and resilient tourism economy. The crisis is a chance to rethink tourism for
the longer term.
Conclusion

This impact of Covid-19 to tourism industry using demand and supply curve. The decrement
in demand function creates decrement in equilibrium price offered and equilibrium
quantity supplied. It is known that the Covid-19 pandemic has critically impacted the
Malaysian economy, more so, the global economy. The service industry is a major revenue
earner and employment provider, so this will minimise economizing in the tourism industry.
It is hoped the state governments of Sabah and Sarawak would not enforce additional
restrictions on local travellers from other states, such as a obligation for health certificates. To
pave the way for faster recovery, we hoped the government would consider gradually
opening up the country’s borders to allow tourists from low-risk countries such as Taiwan,
Vietnam, Brunei and Australia. Government policy need to address a proper solution in
preventing the spreading of Covid-19 and elevating the status of economy activity in tourism
industry.
References

Centers for Disease Control and Prevention (2020). Available at:


https://www.cdc.gov/media/index.html

Khan, D. and Yasmine Khan, L. (2020). The Economic Impact of COVID-19 on Developing
Countries. Available at:http://www.ipsnews.net/2020/04/the-economic-impact-of-covid-19-
on-developing-countries/

Malaysia Corona Virus Statistics (2020). Available at: http://covid-19.moh.gov.my/

Medical News Today (2020). Available at: https://www.medicalnewstoday.com/articles/live-


updates-coronavirus-covid-19#1

Ministry of Health (2020). Available at: http://www.moh.gov.my/index.php/pages/view/2274

National Institutes of Health (2020). Available at: https://www.nih.gov/

Prime Minister’s Office (2020). Available at: https://www.pmo.gov.my/

The Ministry of Commerce and Industry (2020). Available at:


https://www.miti.gov.my/https://www.miti.gov.my/

World Health Organization (2020). Available at: https://www.who.int/

World Health Organization (2020). Available at:


https://www.who.int/healthtopics/coronavirus#tab=tab_1