Malaysia on radar of companies looking to expand

Kuala Lumpur’s strong business foundation and multicultural people are a plus.

Malaysia is emerging as a key entry point for companies looking to expand into Southeast Asia, thanks to its robust business infrastructure, logistics, and diverse population, according to management consulting firm YCP Solidiance.

There is a growing interest from Japanese and Chinese businesses in the Malaysian market,  Yuichi Ota, a partner at YCP, told the Retail Summit 2025 in Malaysia in April.

“Kuala Lumpur offers a strong business foundation, including logistics and international trade, and is supported by a multicultural population including Malays, Chinese, and Indians,” he added.

Ota noted that whilst most companies start with indicators like economic growth when scouting for a location, small and mid-sized companies are now focusing more on detailed insights about a city like Kuala Lumpur.

He said businesses are attracted to Malaysia’s strong digital ecosystem and is using the country as a testing ground for online marketing and e-commerce.

“The digital infrastructure here supports innovative consumer engagement and allows businesses to pilot strategies in a market that mirrors the broader Southeast Asian region,” he added.

Malaysia’s e-commerce market is estimated at $12.26b and is expected to almost double to $23.93b by 2030, according to Mordor Intelligence.

The increasing interest from Japanese and Chinese companies comes at a time when companies seek growth beyond their home markets.

Ota said many of these companies view Malaysia’s multicultural environment as an advantage in testing and refining their business models before committing to larger, more diverse Southeast Asian markets.

Smaller companies are following the lead of bigger companies like Uniqlo and Don Quijote, which have expanded into Malaysia, he added. 

However, small and mid-sized companies in Malaysia face challenges such as lack of transparency, fragmented consumer segments, and scaling issues due to a smaller population compared with Japan or China, Ota said.

These businesses could start with a test-and-learn approach and work with local partners, whilst also adapting marketing and pricing strategies to the local market.