Malaysia’s small businesses are experiencing record-breaking growth, with 71% reporting expansion in 2024, fueled by increased technology adoption and AI investments. Confidence remains high, with 82% expecting further growth this year and strong optimism for the economy in 2025.
MALAYSIA, 14 March 2025 – Malaysia’s small business sector is witnessing unprecedented growth, with 71% of businesses reporting expansion in 2024—the highest in over a decade—according to CPA Australia’s annual Asia Pacific Small Business Survey. The momentum is expected to continue, with 82% of small businesses anticipating further growth this year, marking the highest optimism level since 2012.
Confidence in the country’s economic future is equally robust, with 81% of small businesses expecting economic growth in 2025, significantly surpassing the Asia-Pacific average of 67%.
Digital Adoption Fuels Business Expansion
“Malaysia’s small business sector is powered by dynamic and young entrepreneurs who are quick to embrace digital technologies,” said Yip Kit Weng FCPA, President of CPA Australia Malaysia Division.
E-commerce, digital payments, and social media are key drivers of this transformation, with 92% of Malaysian small businesses leveraging social media for communication and marketing in 2024. Notably, Malaysia’s entrepreneurs rank highest in innovation, supported by the fact that 64% of small business owners are under 40.
“Their ability to adapt quickly and invest in digital solutions is driving Malaysia’s competitiveness in the region,” Yip added.
AI and Digital Payments Transforming the Landscape
Investment in digital tools continues to rise, with AI adoption more than doubling from 11% in 2023 to 27% in 2024. Digital and mobile payments have become standard practice, with 78% of small businesses receiving over 10% of their sales through platforms like GrabPay, Touch ‘n Go, and Boost.
“It is encouraging to see more small businesses embracing AI, well ahead of the government’s five-year strategic roadmap to accelerate AI adoption,” Yip noted. He emphasized that regulatory measures to ensure ethical AI practices and tailored policies for target groups will further boost AI adoption while enhancing public trust.
Expanding Beyond Borders
Despite global economic uncertainties, 55% of Malaysian small businesses anticipate an increase in overseas revenue in 2024. To support this expansion, demand for external financing is surging, with 70% of businesses utilizing external funds in 2024 and 85% expecting to require additional financing this year.
“Given Malaysia’s strong focus on innovation, technology, and exports, this demand is unsurprising,” Yip remarked.
Addressing Challenges Amid Strong Economic Growth
Rising costs—particularly in materials, utilities, rent, and taxes—remain the biggest challenge for small businesses. Many have implemented cost-control measures to manage these pressures effectively.
“The strong economic environment, coupled with government initiatives to boost competitiveness and investor confidence, is helping to create a positive business climate for small businesses,” Yip concluded.
