Covid-19 Exclusives: Digital Onboarding in Numbers

DIGITAL TRANSFORMATION is a core focus area of Penang2030. To enhance the usage of digital technology among Penangites, the state government has implemented a variety of initiatives including the Penang Smart Parking (PSP) system, digital/cashless payment for food hawkers and wet markets, the application PGCare for contact tracing (now defunct), and the setting up of a virtual recording and broadcasting studio for e-learning. Bolstering up these efforts is the establishment of Digital Penang (DP) in April 2020 to facilitate e-governance, digital infrastructure and digital literacy.

Data from the PSP system shows an exponential growth in the number of active users at nearly 50% per month, from 1,458 active users – when the system was first launched on August 19, 2019 – to 125,312 active users in July 2020 despite a slowdown during the MCO period (Figure 1).

Figure 1: Number of Active Users for the Penang Smart Parking System in Penang, August 2019-July 2020

Notes:
1. An active user is defined as an individual who has made at least one monthly transaction until the cut-off month of July 2020.
2. The data from August 2019 comprises that from August 19, 2019 onwards.

Source: Local Government Unit, State Secretary Office, Penang state government.

The contact tracing system PGCare was created through a public-private partnership between the Penang state government and Madison Technologies, with the support of Maxis Broadband Malaysia. As of August 7, 2020, the system has registered a total of 1.37 million users and 36,865 business premises throughout the state. This is equivalent to the adoption rates of about 77.1% and 59.6% in the number of users1 and businesses2 respectively.3

At Penang’s public markets and food courts, traders and hawkers are encouraged to adopt cashless payment systems for transactions. From July 18, 2020, 14 public markets have implemented electronic payment, with a total of 991 traders accepting e-payments.4 This project will be enhanced and assisted through DP, where 250 Digital Promoters and 32 Digital Coaches will be engaged to educate the public on the usage of e-payment apps.

The local governments are also doing their part to encourage digital onboarding. The Penang Island City Council (MBPP), for example, launched the online delivery platform Jom Beli Online ( JBO) 5 in April 2020 to help food hawkers sustain their business operations during the MCO. As of July 2020, a total of 320 hawkers have signed up with JBO, with the number of transactions reaching an average of 4,482 and RM93,673 transaction values per month for April and May 2020.

Table 1: Number of Businesses/Merchants Involved, Users and Transactions for PGCare and Digital Payment Initiative, Penang

Note: Data for PGCare was last updated on August 7, 2020, while the number of transactions was updated until August 5, 2020.

Sources: For PGCARE - Chief Minister Incorporated (CMI) and Malay Mail (https://www.malaymail.com/news/malaysia/2020/08/05/penang-phases-out-pgcare-app-in-favour-of-mysejahtera/1891211);

For digital payment - FMT news (https://www.freemalaysiatoday.com/category/nation/2020/07/18/cashless-paymentsat-all-penang-markets-by-december/).

Figure 2: Number and Value of Transactions via the Jom Beli Online Platform Launched by MBPP, April-July 2020


Table 2: Selected Digital and Smart Initiatives by MBSP

However, both the number and value of transactions plummeted by about onethird on average in June and July, when the public was finally allowed to dine-in (Figure 2).

On the mainland, the digital initiatives are mainly focused on traffic control, flashflood management, security, counter services and payment gateways. Table 2 outlines a number of selected digital and smart initiatives introduced by the Seberang Perai City Council (MBSP).

As shown in Figure 3, the cashless transactions for MBSP have gained popularity in recent years, this is partly due to the increasing acceptance of online public services as well as the Covid-19 pandemic. From 2008-2017, the adoption rates stagnated at about 40%, but surged in 2018 from 45.2% to as high as 60.6% in 2020 (until July 22), marking an average growth rate of 14% per year.

Figure 3: Number and Adoption Rate of Cashless Transactions, MBSP, 2008-2020


Table 3: Income and Expenditure of E-Commerce Transactions by State, 2015 and 2017

Figure 4: Value-added and Employments in the ICT Sector, Penang, 2010-2017

Table 4: Percentage of Computer Usage, Internet Usage and Web Presence in Businesses by State, 2017

Digital Economy

Penang’s digital economy – which makes up the ICT sector and e-commerce – has expanded over the years. A rise in mobile phone penetration and internet access have also encouraged an increase in online shopping. E-commerce is now essential in trade and business. Table 3 shows that from 2015 to 2017, all states benefitted in both income and expenditure from e-commerce transactions. Income-wise, Penang came in fourth with a total of RM46.6bil in 2017, with a compounded annual growth rate (CAGR) of 3.1% from 2015-2017, trailing behind Selangor (RM139bil, 5.6%), KL (RM59.1bil, 14.9%) and Johor (RM49.8bil, 3.9%).

Over the last seven years, the value-added in Penang’s ICT sector grew a remarkable 37.1% annually, from RM219mil in 2010 to nearly RM2bil in 2017. Despite constituting not more than 2% of the state’s total employed persons, the number of ICT-related employments expanded by seven-fold from 2010 to 2017. The value-added per worker had also increased from RM146,753 in 2010 to RM178,646 in 2017. Coupled with the Recovery MCO implementation, the value-added in the ICT sector is expected to accelerate in 2020 and beyond, given that digitalisation is now an essential tool in most businesses.

According to the 2018’s Malaysia Digital Economy, the ICT usage in businesses improved nationwide. In 2017, 83.4% and 89% of Penang’s establishments utilised the internet and computers for businesses respectively, an improvement of 3% and 2% from 2015 respectively. As for the rate of web presence, Penang ranked fourth, where 40.6% of the total businesses owned a website, trailing behind KL (56%), Selangor (55.2%) and Putrajaya (44.8%).



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