Young business owners continue to drive small businesses in Malaysia, while technology adoption remains concentrated in front-end activities. At the same time, improved access to finance is needed for deeper digital transformation.
The survey found that while half of Malaysian small businesses report improved profitability from their technology investments over the past two years, the proportion generating more than 10 per cent of revenue from online sales declined from 74 per cent in 2024 to 62 per cent in 2025. Digital payment usage also declined in 2025. About 74 per cent of small businesses received more than 10 per cent of their sales through digital payment platforms such as GrabPay, Touch ‘n Go and Boost, compared to 78 per cent in 2024.
Priya Terumalay, CPA Australia’s Regional Head for Southeast Asia, said government initiatives have helped support technology adoption, but these efforts have yet to drive significant uptake of deeper productivity-enhancing technologies, such as artificial intelligence, process automation, data analytics and systems integration.
“Technology investment remains concentrated in computer hardware and customer-facing functions like mobile apps and payments, while structural constraints continue to limit more transformative approaches,” Priya said.
“With cost pressures remaining a persistent challenge compressing margins, policy priorities should focus on addressing structural constraints such as re-orienting digital support towards automation, systems integration, and data use, along with support for productivity-enhancing responses rather than short-term relief.”
The survey also highlighted cybersecurity concerns. Businesses making technology investments must include adequate protection measures to minimise cyber risk exposure, as 35 per cent of small businesses lost time or money due to a cyber-attack in 2025. Only 39 per cent reviewed their cybersecurity protections over six months, the second lowest result among the 11 markets surveyed.
Despite these challenges, business sentiment on the Malaysian economy remains positive. About 75 per cent of small businesses expect the economy to grow in 2026, while 77 per cent anticipate business growth this year. However, improved access to effective finance, especially for investment, will be important to enable deeper digital transformation and build resilience.
“This is particularly crucial for outward-oriented small businesses navigating global supply chain pressures and trade policy uncertainty that could weigh on growth, especially firms integrated into regional supply chains,” Priya said.
