Businesses have come to the fundamental realisation: data analysis is not merely a “nice to have” bonus, but rather the lifeblood of trade in this new era. This is proven as more than 80% of Malaysian businesses believe that data analytics are vital for any business. Take for example a clothing store located in Kuala Lumpur. They would be able to obtain important insights into the ever-evolving fashion tastes and upcoming trends by analysing customer demographics, purchase behaviours, and social media engagement indicators. 

Equipped with this understanding, they may then customise their product lines, advertising efforts, and pricing plans to more effectively appeal to their target demographic, which will ultimately increase sales and foster brand loyalty.

Connecting the data dots

Beyond providing customer insights, data also plays a pivotal role in optimising internal operations and driving efficiencies across various business functions.  It has become increasingly clear that data isn’t just a resource to be mined; it’s a strategic asset that fuels innovation, drives competitive advantage, and unlocks new growth opportunities. 

Having said that, as our digital landscape undergoes a continuous seismic shift, SMEs in Malaysia are at a crossroads, facing the imminent phasing out of cookies. Though these small pieces (or crumbs) of code have been the backbone of online advertising and tracking mechanisms for decades, their utilisation by Malaysian businesses has only recently gained momentum. This has allowed these businesses that have only just begun to rely on third-party data to gather data, track user behaviour across websites, and deliver targeted advertisements. Cookies and third-party data have served as a cost-effective means for Malaysian SMEs to reach potential customers and understand their online activities. By utilising cookies, they can track users’ browsing habits, analyse purchasing patterns, and retarget customers with personalised ads — all with minimal upfront investment. This level of targeting and precision has enabled SMEs to compete with larger players in the digital arena, driving sales and expanding their customer base. 

Beyond cookies

However, despite their widespread use and effectiveness, third-party data has increasingly come under scrutiny due to privacy concerns and regulatory pressures. Consumers have become more aware of data privacy issues and are demanding greater transparency and control over their personal information. Regulatory bodies, both globally and within the SEA region, have introduced stricter data protection laws and regulations, such as the Personal Data Protection Act (PDPA) in Malaysia, to safeguard user privacy and ensure responsible data handling practices.

In response to these developments, major tech companies, including Google and Apple, have announced plans to phase out support for third-party cookies in their browsers, signalling a significant shift in the digital advertising landscape. 

As a result, Southeast Asian SMEs must adapt to this new reality by exploring the following alternatives:

• Embracing first-party data as a competitive advantage

In the realm of data, SMEs possess a hidden gem: first-party data sourced directly from their customers. Unlike larger corporations, SMEs often engage with customers on a more personal level, whether in-store or online. This connection enables SMEs to collect qualitative data that goes beyond transactions. This treasure trove offers unparalleled insights into consumer behaviour and preferences. In fact, 92% of marketers in the APAC region believe that phasing out cookies can help strengthen trust in advertising among consumers in the long run, further proving the point that we may be better off without it

• Building trust through transparent data practices:

SMEs must adopt a proactive approach to communicate their data collection and usage practices clearly to customers. By implementing robust data protection measures and offering transparent opt-in mechanisms, they instil confidence in consumers, paving the way for sustainable growth. This commitment to transparency not only builds trust but also ensures compliance with evolving regulations in the SEA region.

• Investing in data literacy and skills development:

To unlock the full potential of their data assets, SMEs must cultivate a culture of data literacy within their organisations. This not only enables internal teams to make sense of data and draw actionable insights but also ensures that customer data remains secure. By investing in continuous skills development, SMEs empower their workforce to navigate the complexities of data governance, safeguarding sensitive information and upholding customer trust in the digital landscape. 

Though cookies have played a crucial role in the digital strategies of SMEs, with their impending phase-out, businesses must pivot towards more sustainable and privacy-conscious practices to maintain competitiveness and consumer trust in the evolving digital landscape. As businesses across SEA continue to navigate these complexities, those that embrace data-driven decision-making and prioritise data literacy will undoubtedly emerge as leaders in the new era of commerce.