Malaysia Urged to Make Foreign E-Commerce Platforms Establish
Malaysia Urged to Make Foreign E-Commerce Platforms Establish Local Offices as Furniture SMEs Demand a Fairer Marketplace
Local furniture manufacturers, retailers and suppliers say years of uneven digital competition are eroding margins, weakening domestic supply chains and placing established Malaysian businesses under growing pressure
By The Furniture Times (TFT) Editorial Desk | 14 October 2026
Malaysia is facing an increasingly urgent question: should a foreign e-commerce platform be allowed to earn substantial revenue from Malaysian consumers without maintaining a registered company, responsible local office, customer-service operation or comparable regulatory presence in the country?
The question has moved firmly onto the national political agenda after Masjid Tanah MP Mas Ermieyati Samsudin called on the government to require major foreign e-commerce platforms—including Temu and Pinduoduo—to establish local operations in Malaysia.
During the Dewan Rakyat debate on Budget 2027, Mas Ermieyati proposed that foreign platforms exceeding a prescribed Malaysian sales threshold should be required to register a local company, open an office and appoint customer-service representatives in the country.
She argued that factory-direct platforms enjoy a considerable cost advantage over Malaysian retailers, which must pay rent, salaries, taxes and other operating expenses. She warned that small manufacturers and local retailers could suffer if the situation were allowed to continue without adequate controls.
For Malaysia’s furniture industry, this is not a theoretical concern.
Furniture manufacturers, retailers, importers, distributors, component suppliers, logistics companies, installers and repair businesses have been raising similar concerns for years. Industry anxiety has intensified over the past two years as extremely low-priced furniture, home accessories, storage products and household merchandise have become more accessible through cross-border digital platforms.
Furniture companies report losing orders, experiencing severe margin pressure and being compelled to compete against prices that do not appear to reflect the full cost of operating a compliant Malaysian business.
Some industry participants believe hundreds of furniture brands, retailers and small suppliers have already lost meaningful business as cross-border competition has accelerated. However, Malaysia currently lacks a transparent, furniture-specific public dataset that can conclusively attribute business closures, revenue losses or job reductions to particular platforms.
That absence of data should not be mistaken for an absence of damage.
The Furniture Times believes that the government, trade associations and industry stakeholders must begin measuring the consequences before temporary pressure develops into permanent loss of Malaysian manufacturing, retail and service capacity.
A Parliamentary Proposal With Major Implications
Mas Ermieyati’s proposal contains several distinct recommendations.
She called for:
- Local registration of foreign e-commerce platforms once their Malaysian sales exceed a defined threshold
- A physical or legally accountable office in Malaysia
- Locally appointed customer-service representatives
- A review of the 10% sales tax on imported low-value goods
- Stronger product-safety inspections for goods shipped directly from overseas
- Measures to reduce excessive commissions charged to small online traders
- Greater support for direct selling through social-media channels
- A national DuitNow escrow mechanism developed with PayNet
Under the proposed escrow arrangement, a buyer’s payment would be held by a third party and released to the seller only after the goods were safely received.
Mas Ermieyati said some established marketplaces had invested in Malaysian offices, warehouses and employment, although she also criticised platform commissions and transaction charges that she said could reach 20% and become especially burdensome for new and small traders.
The argument is not simply that foreign platforms should be prevented from operating. The central question is whether businesses participating in the same Malaysian consumer market should carry comparable responsibilities.
A local furniture company cannot disappear when a customer has a complaint. It must answer telephone calls, process warranty claims, arrange replacements, pay employees, manage damaged products and maintain compliance with Malaysian regulations.
When an overseas seller has no meaningful local presence, enforcing equivalent responsibilities can become much more difficult.
The Furniture Industry Has Been Warning About This for Years
Malaysia possesses an established furniture ecosystem that extends far beyond the final product displayed in a showroom.
It includes:
- Furniture manufacturers
- Timber processors
- Panel producers
- Foam manufacturers
- Textile and upholstery suppliers
- Hardware and fittings companies
- Packaging manufacturers
- Importers and distributors
- Independent retailers
- Shopping-centre showrooms
- E-commerce sellers
- Designers and consultants
- Transport and warehousing companies
- Furniture installers
- Repair and refurbishment businesses
- Salespeople and customer-service workers
- Photographers, marketers and technology providers
When a Malaysian furniture retailer loses an order, the effect does not stop at the showroom.
It can reduce demand for local delivery, assembly, warehousing, packaging, advertising, maintenance and replacement services. If a Malaysian manufacturer loses volume, the consequences can move backwards through the supply chain to component producers, material suppliers, subcontractors and workers.
This is why the rapid expansion of factory-direct cross-border commerce cannot be treated merely as a contest between one local seller and one overseas merchant. It can affect the productive capacity of an entire domestic ecosystem.
The warning signs are particularly serious for smaller furniture companies. Many SMEs do not have large cash reserves, sophisticated technology systems or enough purchasing power to negotiate lower material and freight costs. A sustained decline in orders can quickly create difficulty in paying rent, wages, suppliers and bank facilities.
A business does not need to close immediately to be seriously damaged. It may first:
- Reduce its workforce
- Cancel expansion plans
- Close one showroom
- Stop developing new products
- Cut advertising and brand investment
- Carry less inventory
- Delay payments to suppliers
- Reduce warranty support
- Switch from manufacturing to reselling
- Abandon less profitable product categories
By the time official closure figures reveal the problem, considerable industrial capacity may already have disappeared.
Local Furniture Businesses Carry Costs That Online Prices Do Not Show
A Malaysian furniture company’s selling price represents far more than the cost of wood, metal, foam or fabric.
A responsible local business may have to support:
- Commercial rent and assessment charges
- Warehouse facilities
- Electricity and utilities
- Malaysian salaries
- Employees Provident Fund contributions
- Social Security Organisation contributions
- Training and workplace obligations
- Corporate and consumption taxes
- Import duties on materials or finished products
- Product inspection and certification
- Inventory financing
- Insurance
- Local marketing
- Marketplace commissions
- Payment-processing fees
- Delivery vehicles
- Last-mile delivery
- Installation
- Returns and exchanges
- Warranty claims
- Spare parts
- Repairs
- Consumer complaints
- Unsold or damaged stock
Industry representatives outside the furniture sector have expressed the same concern. The Associated Chinese Chambers of Commerce and Industry of Malaysia has pointed to the local cost burden involving duties, warehousing, rent, wages, statutory contributions and certifications. Its position is not necessarily to oppose foreign platforms, but to seek consistent competitive requirements. theedgemalaysia.com
The contrast can be summarised as follows:
| Responsibility | Malaysian furniture business | Foreign direct-shipping seller without a substantial local presence |
|---|---|---|
| Local company and office | Generally required | May be absent |
| Malaysian employees | Common | May be minimal or absent |
| Showroom or warehouse rent | Frequently incurred | May not be incurred in Malaysia |
| EPF and SOCSO obligations | Applicable to local employees | Limited if there is no local workforce |
| Local inventory risk | Usually carried | Products may be shipped only after purchase |
| Product inspection | Business must manage compliance | Enforcement can be more difficult |
| Delivery and installation | Frequently included or locally arranged | May be excluded or outsourced |
| Returns | Local collection may be available | Can be complicated or uneconomic |
| Warranty service | Local business remains accountable | Consumer recourse may be limited |
| Spare parts and repair | Often expected | Frequently unclear |
| Tax and reporting responsibilities | Directly enforceable | Dependent on registration and collection structure |
| Consumer complaints | Local entity can be contacted | No local responsible party may exist |
Not every foreign seller avoids these responsibilities, and not every local seller provides high-quality service. The issue is structural: enforcement is considerably easier when a legally responsible organisation exists inside the country.
Why Furniture Is Especially Vulnerable
Furniture is more exposed than many other consumer categories because online images can conceal significant differences in product quality.
Two products may look nearly identical on a mobile-phone screen while differing substantially in:
- Material thickness
- Structural strength
- Joint construction
- Hardware quality
- Load capacity
- Stability
- Upholstery density
- Fabric durability
- Surface coating
- Chemical emissions
- Moisture resistance
- Corrosion resistance
- Product lifespan
- Repairability
- Warranty protection
A low-priced chair may look similar to a Malaysian-made chair but use thinner metal, weaker fasteners or lower-density foam. A storage cabinet may appear equivalent while having less stable construction or no wall-anchoring provision. A bed may be marketed using the same general dimensions while providing completely different centre supports, connectors and load performance.
Consumers frequently discover these differences only after delivery—or after the product fails.
This creates an unfair comparison. The visible price is compared immediately, while the value of local inspection, delivery, installation, warranty, product advice and repair support remains hidden.
The Malaysian company can therefore appear expensive even when its price reflects a more complete and accountable product proposition.
Product Safety Must Become Central to the Discussion
The proposal for stricter safety checks is especially relevant to furniture.
Furniture failure can produce more than disappointment. It can cause physical injury, property damage and risk to children or older consumers.
Products requiring particular attention include:
- Bunk beds
- Children’s furniture
- High chairs
- Cots and cribs
- Tall cabinets
- Chests of drawers
- Recliners
- Sofa beds
- Folding tables and chairs
- Glass furniture
- Office chairs
- Outdoor furniture
- Wall-mounted storage
- Electrically operated furniture
Authorities must know who is responsible when a product presents a stability, entrapment, electrical, flammability or structural hazard.
A local office cannot replace technical regulation, but it can provide an accountable party for notices, recalls, investigations, consumer refunds and evidence requests.
Platforms serving Malaysian consumers should be required to maintain verifiable records covering:
- Seller identity
- Manufacturer identity
- Country of manufacture
- Product materials
- Model numbers
- Applicable test reports
- Safety warnings
- Assembly instructions
- Load limitations
- Batch or shipment traceability
- Complaint history
- Recall actions
Furniture listings should also provide accurate dimensions and material descriptions. Terms such as “solid wood,” “leather,” “stainless steel” and “high-density foam” should not be used without an adequate factual basis.
Malaysia Already Taxes Low-Value Imported Goods—but Tax Alone Is Not Enough
Malaysia imposed a 10% sales tax on imported low-value goods valued at RM500 or less and sold online, effective from 1 January 2024.
The Ministry of Finance said the measure was intended to address unequal tax treatment between goods sold by Malaysian retailers and goods sold online directly to local consumers. It applies to qualifying goods imported by land, sea or air. mof.gov.my
The government’s 2027 fiscal documentation continues to describe the tax as a mechanism for reducing disparities between domestic MSMEs and overseas online sellers. belanjawan.mof.gov.my
The tax was an important step, but furniture businesses argue that equal taxation does not automatically create equal competition.
Tax is only one part of the cost and accountability structure.
A more complete assessment must consider:
- Product standards
- Safety testing
- Import requirements
- Seller verification
- Employment obligations
- Customer-service accessibility
- Warranty enforcement
- Returns and refunds
- Advertising accuracy
- Counterfeit prevention
- Environmental responsibility
- Data disclosure
- Marketplace liability
A 10% tax cannot compensate for every difference between a Malaysian enterprise maintaining staff, premises and inventory and an overseas seller shipping directly after receiving an order.
The question should therefore not be limited to whether the existing rate should be increased, reduced or retained. Policymakers must examine whether the collection mechanism is effective and whether parallel safety and consumer-protection rules are being consistently enforced.
A Local Office Is Necessary—but It Is Not Sufficient
Requiring a foreign platform to rent an office and employ customer-service representatives would improve accountability, but physical presence by itself will not solve the wider problem.
A meaningful policy should require a platform exceeding a defined transaction, user or revenue threshold to maintain:
- A registered Malaysian legal entity
The entity should carry clear responsibility for compliance and consumer redress. - A responsible local representative
Regulators and consumers must know who can receive legal notices and complaints. - Accessible Malaysian customer service
Consumers should not be restricted to automated messages or inaccessible overseas channels. - Verified seller information
Anonymous or misleading seller identities should not be permitted. - Product-safety documentation
High-risk goods should be supported by appropriate declarations and test evidence. - A local recall mechanism
Unsafe products must be removable from sale quickly, with affected buyers notified. - Transparent price disclosure
Taxes, delivery charges and other compulsory fees should be visible before payment. - Standardised returns and refunds
A low product price should not eliminate effective consumer rights. - Transaction reporting
Authorities need reliable category-level data to monitor imports and market effects. - Cooperation with enforcement agencies
Platforms must respond promptly to requests involving unsafe, counterfeit or misleading products.
The compliance threshold should be designed carefully so that it captures platforms conducting substantial business in Malaysia without imposing disproportionate burdens on occasional small overseas sellers.
The Marketplace Commission Problem Must Also Be Addressed
Foreign factory-direct platforms are not the only source of pressure.
Many Malaysian furniture SMEs depend on locally established marketplaces to find customers. Those marketplaces can provide valuable payment systems, advertising tools, logistics integration and consumer traffic—but commissions, transaction charges and mandatory promotional spending can absorb a significant portion of a seller’s margin.
Furniture presents particular challenges because products are bulky, delivery costs are high and returns are expensive. A commission calculated on the complete selling price can become substantial even where the furniture company’s net profit is modest.
A seller may also incur:
- Platform commissions
- Transaction charges
- Advertising expenditure
- Voucher contributions
- Free-shipping subsidies
- Affiliate fees
- Warehouse charges
- Penalties
- Return costs
- Damaged-goods losses
Policymakers should examine the total effective cost of marketplace participation, not merely the headline commission.
Platforms should provide sellers with a standardised statement showing the gross sale value, every deduction, advertising expenditure, refund cost and final net receipt. This would help SMEs understand whether marketplace growth is actually producing profit.
Direct Selling Can Help, but Furniture Requires More Than Social Media
Mas Ermieyati suggested that businesses could reduce platform commissions by selling through Facebook and Instagram while paying only basic payment-processing charges.
Direct commerce could be valuable for furniture SMEs. It allows a company to own its customer relationship, present more detailed product information and reduce dependence on one dominant marketplace.
However, furniture purchases cannot be supported by a payment button alone.
A credible direct-selling system must also manage:
- Product discovery
- Verified business identity
- Secure payment
- Order confirmation
- Delivery scheduling
- Installation
- Inspection on delivery
- Damage reporting
- Returns
- Warranty registration
- Service requests
- Customer reviews
- Fraud prevention
A national DuitNow escrow system could strengthen trust, particularly for first-time purchases from smaller furniture companies. Yet any escrow framework would require clear rules for disputes involving colour variation, transit damage, assembly problems, missing components or claims that a product does not match its description.
Furniture disputes are often more complicated than determining whether a parcel arrived.
The Price Consumers Pay and the Price Malaysia Pays
Consumers understandably welcome lower prices, especially during a period of cost-of-living pressure. Cross-border platforms can increase choice, create competitive discipline and expose inefficient business practices.
The policy response should not deny those benefits or become a blanket prohibition on foreign competition.
But a nation must consider the difference between a low consumer price and the total economic cost.
If extraordinarily low prices result in the gradual loss of local factories, retail networks, skilled employment and after-sales services, Malaysia may become increasingly dependent on external suppliers.
That dependency could create longer-term consequences:
- Reduced domestic manufacturing capacity
- Less product innovation
- Fewer skilled jobs
- Loss of apprenticeships
- Lower tax contributions
- Weaker local supply chains
- Declining commercial occupancy
- Reduced consumer choice from Malaysian brands
- Greater vulnerability to freight disruption
- Limited access to repairs and spare parts
- More disposable products entering the waste stream
The goal should not be to make imported products artificially expensive. It should be to ensure that low prices are not created through unequal obligations, incomplete product information or regulatory blind spots.
Furniture Businesses Must Also Strengthen Their Competitiveness
Fair regulation is essential, but Malaysian furniture companies cannot depend entirely on government protection.
Competing solely through price will become increasingly difficult. Domestic companies must make their other advantages visible.
Those advantages include:
- Faster delivery
- Physical showrooms
- Local product inspection
- Custom dimensions
- Interior consultation
- Installation
- Easier returns
- Accessible warranties
- Spare parts
- Repair services
- Local design
- Climate-appropriate materials
- Commercial-project expertise
- Verified customer reviews
Unfortunately, many local furniture businesses do not communicate these advantages clearly.
Their websites may show only a telephone number and several product photographs. Material specifications, dimensions, warranty terms, delivery areas and customer reviews may be missing. This makes it easier for consumers to compare products based only on price.
Every Malaysian furniture business should strengthen:
- Accurate product specifications
- Original photography
- Material disclosure
- Warranty information
- Delivery and installation policies
- Verified customer feedback
- Search visibility
- Brand storytelling
- Direct customer databases
- Repair and refurbishment services
- Digital catalogues
- Business credentials
Regulation can create fairer ground, but businesses must still build credible brands on it.
TFT Calls for a Furniture E-Commerce Impact Monitor
Malaysia needs evidence strong enough to support proportionate policy.
The Furniture Times proposes the creation of a Furniture E-Commerce Impact Monitor involving government agencies, furniture associations, consumer organisations, manufacturers, retailers, logistics providers and digital platforms.
It should track:
- Cross-border furniture and home-product transactions
- Local furniture retail turnover
- Factory order levels
- SME closures and downsizing
- Employment changes
- Marketplace commissions
- Import volumes
- Consumer complaints
- Product-safety incidents
- Return and refund rates
- Warranty disputes
- Counterfeit or misleading listings
- Environmental disposal costs
- Malaysian sellers’ export performance
The reporting should distinguish correlation from causation. A business may fail because of rent, weak management, changing consumer taste, debt or poor digital adaptation—not only because of foreign platforms.
Nevertheless, without category-specific data, policymakers will remain unable to determine whether competitive pressure is producing healthy adjustment or long-term industrial damage.
TFT, FISE and FurniReviewology: Building Visibility and Trust
The regulatory debate also demonstrates why the furniture industry needs its own connected information infrastructure.
The Furniture Times (TFT) can give manufacturers, retailers, suppliers and service providers a stronger media voice. It can document market conditions, policy concerns, innovation and the contribution of furniture SMEs to employment and economic activity.
Furniture Industry Search Engine (FISE) can help buyers discover manufacturers, retailers, suppliers, designers, installers and other furniture businesses through structured industry search rather than leaving visibility entirely to the largest advertising platforms.
FurniReviewology can strengthen trust through credible customer experience, business reputation and furniture-specific review intelligence.
Together, the ecosystem can help Malaysian furniture companies become more visible, understandable and trustworthy:
The Furniture Times tells their story.
FISE helps the market find them.
FurniReviewology helps customers trust them.
These initiatives cannot replace fair regulation, strong products or responsible business management. They can, however, reduce the visibility disadvantage faced by independent furniture businesses that cannot outspend global platforms.
The Principle Malaysia Must Establish
Requiring foreign e-commerce platforms to establish Malaysian offices should be viewed as part of a broader accountability framework—not as an attack on international trade.
The governing principle should be straightforward:
Businesses serving the same consumer market should face comparable obligations for taxation, product safety, seller verification, customer protection and regulatory accountability.
Malaysia should remain open to innovation, trade and consumer choice. It should also protect the conditions that allow local manufacturers, retailers and suppliers to invest, employ people and serve customers responsibly.
The furniture industry is not asking to be shielded from every competitor. It is asking not to be placed in a contest where one participant carries the full cost of operating in Malaysia while another accesses the same consumers without equivalent responsibilities.
For years, local furniture businesses have warned about margin erosion, disappearing orders and the difficulty of competing against prices shaped by fundamentally different cost structures.
The latest parliamentary intervention gives those concerns national visibility. The next step must be a detailed, evidence-based policy response.
Malaysia must act before factory capacity, retail networks, skills and trusted local brands disappear quietly from the market.
Same market. Same rules. Same responsibility.
Primary Source:
Free Malaysia Today—Make foreign e-commerce platforms set up local offices, says Mas Ermieyati
Additional Sources:
Ministry of Finance Malaysia—Sales Tax on Imported Low-Value Goods Sold Online
The Edge Malaysia—Local Retailers Seek Level Playing Field as Pinduoduo Gains Ground
