Wednesday, August 21, 2019

Bulgaria: High Internet penetration potential for e-commerce

Bulgaria: High Internet penetration potential for e-commerce Coursework in Management Futures Executive Summary The aim of this report is to evaluate the opportunity for development of e-commerce in Bulgaria. The report will examine if there is demand for e-commerce in Bulgaria, if e-commerce might be restricted in some way and if it will be profitable for businesses. This will be achieved by examining the Internet penetration in Bulgaria, its future growth and other corresponding data and statistics. Advantages and Disadvantages as well as a SWOT analysis of e-commerce in will be discussed to evaluate the potential of it in the Bulgarian market. A brief description of the issue investigated The Internet is a global network connecting millions of computers. More than 100 countries are linked into exchanges of data, news and opinions. It exists since 1957 and was found by the Advanced Research Projects Agency of the US department of defense. In Bulgaria, Internet usage has grown significantly especially for the last seven or eight years, but it exists since 1989. It is mostly put into practice for communication and for searching of information. It has become a very useful tool, which is part of peoples daily lives not only in Bulgaria but also all over the world. Due to the ability of the Internet to reach a large number of people in all corners of the world, it has become a mean for electronic trading, also known as e-commerce. E-commerce is the trade of products and services by means of the Internet or other computer networks. E-commerce is very popular in developed countries. It exists since 1991 and since then has grown considerably. It has become a very convenient way to purchase goods and services online in the free time without wasting time to travel to difference stores and having 24-hour access. E-commerce exists in Bulgaria too, but it is still on a very low level even though the Internet has one of the greatest user growths in the European Union. In the period between 2000 and 2007 the Internet in Bulgaria has grown with 412 %. The fast user growth in Bulgaria and the large percentage of active users online is a great opportunity for Bulgarian businesses to reach a vast amount of customer online where they can start offering their products and services. This way they would not only reach more potential customers locally, but will also have the opportunity to expand abroad if demand spreads. Relevant Statistics for Bulgaria The Internet has become a retractable part of most households in Bulgaria. Surveillances show that the number of people who use Internet actively has increased by 100% for the last three years. Today, around 2Â  600Â  000 people, more that 33% of the population uses Internet at home and work. However, statistics also show that almost 80% of the population can have Internet access when needed. The main purpose it is used for is for communication, e.g. e-mail, chat and Internet calls and for searching of information, e.g. job search, current news. Despite the rapid growth of the quality of the Internet provided and the increase in Internet users, Bulgaria still is one of the countries with lowest positions for e-commerce. According to the National Statistical Institute, from 50% of the Internet users searching for goods and services online, only 7.6% have made a purchase. Thus every second Internet user has searched for goods online but did not find what they were looking for. Thirty thousand people have taken part in a survey done by Nielsen Online about the optimizing of online products. The research shows that 60% of the Internet users are aged between 18 and 35 and 22% of the participants have stated that they have income higher than 1000 levs. This is a relatively high salary for this country. The age range, which is predominant consisting of young people who tend to be high consumers. Young people who are still students, are very good at tormenting their parents for receiving what they want, on the other hand the ones who have graduated and have started working tend to spend their wages for satisfying their wants. Statistics also show that 2/3 of the Internet users are employed and the rest are mostly students. The main problem with online shopping for most Internet users is the threat of information theft, especially financial information. In computing it is known as phishing. Phising is an attempt to criminally and fraudulently acquire sensitive information, such as usernames, passwords and credit card details, by masquerading as a trustworthy entity in an electronic communication. Most like targets are online banks and e-commerce businesses that allow online payments like Paypal and E-Pay for Bulgaria. However statistics for E-Pay show that in 2008 transactions per month done through e-pay are on average between 10 and 11 million levs. This is a relatively high transaction rate for the country, but most of these transactions are done for paying bills other than for purchasing of goods. An advantage for online shopping in Bulgaria is that goods can be paid at the time of delivery, which is a way that people who are afraid to pay online would prefer. Products that are most often offered online in Bulgaria are books, office stationary and electronic devices (phones, cameras), which is a very limited offering of products. However, Bulgarian e-commerce should have a very promising future if it develops. For now in Bulgaria, most online shoppers rely on the e-commerce from abroad. Businesses in Bulgaria are missing on a great deal of potential customers due to the lapse of offering their products online. According to statistics of Visa International, during 2005 the volume of e-payments of Bulgarians with Visa in the Internet had increased with almost 100%. The total value of the online transactions made to virtual traders outside the country is 14.3 million US dollars. E-trade has a very good opportunity to grow in Bulgaria since the online users are constantly increasing and have the desire to explore new prospects that the internet might offer to them. Consumerism in Bulgaria is likely to increase rapidly too, due to the economical growth in the country, since its entrance in the EU. However Euro Stat has registered high inflation of 13.4% at the moment, which might slow down the economical growth. According to the European committee even slow the economic growth will continue in Bulgaria. An outline of the analysis undertaken According to the data show above the development of e-commerce in Bulgaria seems promising due to the combination of the following trends: Bulgaria has a high sample of potential of online customers, as 30% of its population use Internet actively and 80% can have Internet access when needed. People can have access at home, work and in public Internet cafes. 50% of the Internet users are interested in buying goods online. For 2005 Bulgarians have spend more than $14 million online, buying product from other countries. Most Internet users in Bulgaria are educated people with relatively high income. The economic state in Bulgaria is going to ameliorate in the future, which is a good base for the growth of consumerism. According to the SWOT analysis-undertaken e-commerce has a lot of strengths for both customers and business, which should be considered. E-trade is convenient for both because: It is fast as there is no need to go outside, travel, visit different shops and compare prices. Easy as the shopping can be done in the comfort of your own home with a few clicks. Cheap as the online offering of product can be less costly for businesses, which gives them the chance to offer more competitive prices for consumers. Consumers can choose from millions of products, which are all displayed on their computer. Businesses can online only sell their products by displaying them online, but also advertise them further, as consumers can easily find them. One disturbing weakness that has arisen in the Bulgarian e-trade was the legislation included in the Law for Protection of Consumer, which stated that the person who delivers the product doesnt have the right to receive payment in advance before the period of 7 days. This caused major difficulties for both buyers and sellers. Therefore a correction in the law followed, it stated that the person who delivers could take this payment with the consumers agreement. Maybe this law should be investigated further but for now existing e-commerce organisations do not have a problem doing their business online. More trends can be useful to examine the potential demand for e-commerce businesses. A research on what products Internet user would prefer to buy online, can help specific businesses balance their advantages and disadvantages for undertaking the step to sell online. Also some of the trends found might not be very realistic due to the small number of sample marketed. However over all if the economy in Bulgaria grows and people have more disposable income, e-commerce will be a success, as it will safe people time and money, and give profit to business. A discussion of the main findings From the findings above I can derive that e-commerce business has the potential to grow fast like it has grown in more developed countries all over the world. E-trade can offer companies the advantage of reaching their customers 24-7 and globally. Businesses can also diminish costs by advertising online for less and eliminating the need for large warehouse buildings for storing and displaying their stock. Another great advantage is the opportunity Internet gives for gaining a large number of contacts, which can lead to positive business developments and ventures. Word count: 1913 Reference: Dave Site (no date) History of Internet. Retrieved on 15 May 2008 from: (2008) One third of the Internet users are in Sofia. Retrieved on 16 May 2008 from: E-commerce land (no date) History of e-commerce. Retrieved on 15 May 2008 from: Econ (2008) Economic growth in our country will remain one of the highest in Europe. Retrieved on 16 May 2008 from: E-pay (2008) Statistics for payment in E-pay. Retrieved on 16 May 2008 from: E-shop BG (2003) E-trade in Bulgaria. Retrieved on 15 May 2008 from: EuroStat (2008) Newsletter. Retrieved on 16 May 2008 from: hHYPERLINK,46587259_dad=portal_schema=PORTALp_product_code=LN-042008ttp://,46587259HYPERLINK,46587259_dad=portal_schema=PORTALp_product_code=LN-042008HYPERLINK,46587259_dad=portal_schema=PORTALp_product_code=LN-042008_dad=portalHYPERLINK,46587259_dad=portal_schema=PORTALp_product_code=LN-042008HYPERLINK,46587259_dad=portal_schema=PORTALp_product_code=LN-042008_schema=PORTALHYPERLINK,46587259_dad=portal_schema=PORTALp_product_code=LN-042008HYPERLINK,46587259_dad=portal_schema=POR TALp_product_code=LN-042008p_product_code=LN-042008 Internet Reklama (2006) E-trade increases twice. Retrieved on 16 May 2008 from: Internet reklama (2007) 2.6 million internet users in Bulgaria. Retrieved on 15 May 2008 from: Internet reklama (2008) National Statistics Institute for Internet in Bulgaria. Retrieved on 15 May 2008 from: Internet reklama (2008) National Statistics Institute for Internet in Bulgaria. Retrieved on 15 May 2008 from: Internet reklama2 (2007) They resolved the advanced payments. Retrieved on 16 May 2008 from: Internet world stats (2008) European Union internet users. Retrieved on 15 May 2008 from: Sega (2008) One third of the Internet users are in Sofia. Retrieved on 16 May 2008 from: Timeline (no date) Internet history. Retrieved on 15 May 2008 from: Webopedia (no date) Internet. Retrieved on 15 May 2008 from: Wikipedia (no date) Phising. Retrieved on 16 May 2008 from: Zoom-Online (no date) What is e-commerce: advantages and draw backs. Retrieved on 15 May 2008 from: Appendices Appendix 1 InternetUsageintheEuropeanUnion EUROPEANHYPERLINK Population (2007Est.) InternetUsers, LatestData Penetration (%Population) Usage %inEU UserGrowth (2000-2007) Austria 8,199,783 4,650,000 56.7% 1.7% 121.4% Belgium 10,392,226 5,100,000 49.1% 1.9% 155.0% Bulgaria 7,322,858 2,200,000 30.0% 0.8% 411.6% Cyprus 788,457 356,000 45.2% 0.1% 197.2% CzechHYPERLINK 10,228,744 5,100,000 49.9% 1.9% 410.0% Denmark 5,468,120 3,762,500 68.8% 1.4% 92.9% Estonia 1,315,912 760,000 57.8% 0.3% 107.3% Finland 5,238,460 3,286,000 62.7% 1.2% 70.5% France 63,718,187 34,851,835 54.7% 12.8% 310.0% Germany 82,400,996 53,240,115 64.6% 19.5% 121.8% Greece 10,706,290 3,800,000 35.5% 1.4% 280.0% Hungary 9,956,108 3,500,000 35.2% 1.3% 389.5% Ireland 4,109,086 2,060,000 50.1% 0.8% 162.8% Italy 58,147,733 33,143,152 57.0% 12.1% 151.1% Latvia 2,259,810 1,070,800 47.4% 0.4% 613.9% Lithuania 3,575,439 1,221,700 34.2% 0.4% 443.0% Luxembourg 480,222 339,000 70.6% 0.1% 239.0% Malta 401,880 127,200 31.7% 0.0% 218.0% Netherlands 16,570,613 14,544,400 87.8% 5.3% 272.9% Poland 38,518,241 11,400,000 29.6% 4.2% 307.1% Portugal 10,642,836 7,782,760 73.1% 2.8% 211.3% Romania 22,276,056 7,000,000 31.4% 2.6% 775.0% Slovakia 5,447,502 2,500,000 45.9% 0.9% 284.6% Slovenia 2,009,245 1,250,000 62.2% 0.5% 316.9% Spain 40,448,191 22,843,915 56.5% 8.4% 324.0% Sweden 9,031,088 6,981,200 77.3% 2.6% 72.5% UnitedHYPERLINK 60,776,238 40,362,842 66.4% 14.8% 162.1% EuropeanUnion 490,430,321 273,234,619 55.7% 100.0% 189.5% Source: Internet world stats (2008) Malaysia S Transportation Sector: SWOT Analysis Malaysia S Transportation Sector: SWOT Analysis A scan of the internal and external environment is a main part of the strategic planning. Environmental factors internal to the firm generally can be classified as strength (S) or weakness (W) and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as SWOT analysis. STRENGTHS Malaysia is Multi-Racial Malaysia is a multi-racial, multi-ethnic society and opens to each one. The 3 main cultures, Malay, Chinese and Indian create an interesting Malaysian society yet still leave it open for other cultures to join and thrive. In Malaysia, you will experience the Malay, Chinese and Indian festivals, food, literature, clothing, religion and culture. Affordable Healthcare Healthcare in Malaysia is world-class and more affordable compared to the United States. Doctors and hospitals have the same standard or superior to American doctors and hospitals and care is world-renowned. Healthcare is good in Malaysia. It is one of the top destinations for medical tourism. In Malaysia, you can only visualize how good your healthcare options will be. Education Malaysias education system is mainly based on the British system and it is better than some other countries in the region such as Thailand, Vietnam and Cambodia. Compulsory subjects include English and Malay, so any children has to grow up fluent in both languages. Ease of Language English is the language spoken by most people in Malaysia. When a person moves to Malaysia, he does not have to suffer by the local language to get things done and the life becomes easier for them. Buying a house, a car, set up utilities, furniture and household items, everything is easier due to being able to deal with things in English. Good Infrastructure Malaysia has a world-class infrastructure and the Roads are excellent. The water supply, drain systems and power grids are stable and telecommunication including phones and internet are phenomenal. Living and Working in Malaysia for western expatriate is made even easier due to its western-standard infrastructure. OPPORTUNITIES Malaysias strong emerging economy is a preferred destination for foreign companies and a fertile ground for local businesses to flourish. In this thriving, business environment job opportunities are created to attract both local as well as foreign talents. There are huge opportunities here and it is often only a matter of getting the right working permit. For Non-Malaysians it is required to convince your potential employer that they help you to get the essential paper work completed in the case of applicable working permit, expatriates a full, a commitment that an employer may be reluctant to make until they are confident that the appointment is going to work out. In Malaysia there is a strong demand here for quality candidates with good qualifications and experience. Managerial positions in development, energy, business and engineering corporations are often the typical option for the relocated worker in Malaysia. The private education sector is excellent in Malaysia, with a number of reputed international institutions, diversified and extensive courses offering and high quality, internationally recognized standards, and featuring the British, German and French curricula as common options. When coming to the food industry of Malaysia, internationally aware individuals have been able to run fashionable, niche and successful activities combining gourmet cuisine, design, care for the details, and providing customers with an overall experiential moment. Malaysians inexhaustible passion for food and adventure have made food industry a vibrant sector. Hospitality, Tourism and management is also enjoying a renaissance in Malaysia by offering five-star stays while providing boutique and heritage experiences like nowhere else on Earth. National Chambers of Commerce in Malaysia give opportunity to connect with companies interested in hiring people with international expertise and experience. WEAKNESSES Lack of Medical Tourism: Strict guidelines implemented for medical advertisement. In Malaysia doctors are only allowed to put up ads with the following information- name, address, qualifications, and telephone numbers. The Medicines Advertisement Board in Malaysia must approve even websites of medical institutions. Thus the medical tourism industry of Malaysia lacks in impressive promotional activities and impressive websites. Inconvenient social visit pass process: The procedures for extension of the social visit pass in Malaysia are very inconvenience and can be very difficult. It is required to complete an application form and the applicant must submit it along with his/her passport and confirmed flight ticket to the home country personally. Obviously such requirements make it impossible to be fulfilled by a person admitted in a hospital, such as in the case of a medical tourist. Lack of coordination: Lack of a coordinated effort between airline operators, hotels and hospitals to promote the industry and lack of uniform pricing policies and standards across hospitals in Malaysia. Weak policy: Malaysian policy states that an individual entity is not permitted to transport an excess of 1,000 Ringgits outside of the country without government approval. While this act has not hindered trade, it has certainly weakened the credibility of the Negara Malaysia Bank (the countries national bank) as an international financier. Limited Profits to retailers: The low estimated cost of living is sustained by the Malaysian government through subsides on essential items, such as gasoline, bread, rice, etc. Prices on these items are kept well under market value which although good for the consumer hinders any further competitive pricing by retailers, thus limiting profit. Lacking in multimedia research development hub: Despite the creation of a world-class infrastructure, the government of Malaysia has not been successful in realizing its original aim of creating a cutting-edge multimedia research and development hub. Rising costs: For creating such a successful service industry around the world, Malaysia had to sacrifice other industries along the way. Malaysia is number three in the service industry. The increase in criminal activities related to this industry is causing a rise in the cost to prevent such crime. Favoritism for Malays: Roughly 65% of the population of Malaysia consists of Malays. Government perks favor Malays and other indigenous races to the determent of minorities, who provide a better level of economic activity. These factors have a long-term impact on the economy, by alienating minorities who contribute to economic growth. Those minorities are more likely to move to more favorable countries that value their expertise and economic contributions. Discriminatory Policies in Economy: The discrimination issues the government maintains in Malaysia over non-Malays, is an economic concern. Despite some improvement in the economic power of Malay people, the Malaysian government maintains a policy of discrimination favoring ethnic Malays over other races-including preferential treatment in education, employment, business, scholarships, access to cheaper housing and assisted savings. This special kind of treatment has sparked envy and resentment between Malays and Non- Malays. Discrimination issues tend to provoke conflict between the groups involved in the discriminatory practices. Commerce between the two groups may decrease, which may cause a decrease in overall economic activity. Discrimination also limits human capital when available to do certain jobs. Limitations in general lead to less efficient uses of natural or human resources in an economy. Critical level of Corruption: Corruption in Malaysia has reached a critical level as the country falls in international rankings, a graft watchdog announced warning the government to act or lose its competitiveness. The UNs Asia-Pacific Human Development Report highlighted an International Country Risk Guide finding which saw Malaysia decline from a score of 4.00 in year 1996 to 2.38 in year 2006, with a lower score showing greater corruption. Corrupt political systems tend to weaken economic growth, because they indirectly charge additional taxes on the economy. Every payment to a corrupt officer to obtain a service is considered a tax. The more taxes on a economic system, the lower economic growth, because resources are shifted away from highly efficient parts of the economy to less efficient and corrupt parts of the economy. Threats Malaysia, being a trading nation that highly dependent on international trade, the economic performance is very vulnerable to the performance of the major international trading partners. For decades, the economic growth has been overly reliant on international trade, external sector developments and foreign direct investment (FDI). In view of the challenges that arise from the globalization effects, it is important for the Malaysian Government to sustain growth and strengthen the macro-economic fundamentals within the country. This can be done by focusing on domestic business and industrial activities and increasing the purchasing power of our population. The governments corporate reforms and fiscal policies have to be continued to create a condition suitable for a speedy recovery and sustainable growth. It is also important to ensure that the restructured loans remain performing. Importance must be placed on continuing improvements on transparency, corporate governance and strict enforcement of powers by the market regulators. The country also needs to maintain its peaceful environment and security to secure the investors confidence. Currently, most of exports of Malaysia are for the United States. Thus, the successful recovery of the US economy is pivotal to Malaysias continuing recovery. Due to current stagnation in the US economy, the electronic chip industry is a damper on economic recovery in Malaysia where electronics related exports make up more than 30% of the gross domestic product. River pollution: Pollution is one the largest threats to the rivers. The reduction in river water quality is a clear indicator of the decline in the environmental health of a river basin. Palm Oil Production Destroys Forest: Environmental group protests are making it difficult to expand production of palm oil plantations, so firms have to slow their growth and discover a new, more sustainable, method to increase Palm Oil. Threats and boycotts will lead to less demand for products containing palm oil, which will hurt the price of palm oil as a commodity. Swine Flu Virus: Swine flu (the H1N1 virus) is added to the list of potential threats. Malaysia have downgraded their forecast for tourist arrivals accordingly. Malaysia reported its first fatal case of swine flu with the death of an Indonesian student, officials. The 30-year-old man, who was diagnosed with the H1N1 virus, died from cardiac arrest due to ventricular fibrillation. TRANSPORTATION SECTOR In Malaysia transport was started developing during British colonial rule, and its transport network is now developed and diverse. Malaysias road system begun during British colonization and it covers about 63,445 km. The main highway that reaches the Thai border from Singapore covers a distance of over 800 km. Within the city, the Light Rail Transit (LRT) is available to help meet Malaysias need for mobility that is reliable, safe, comfortable and predictable. Peninsular Malaysia have high quality network of roads, while the East Malaysian road system is not as well developed. In Peninsular Malaysia the main modes of transport are trains, buses, cars and to an extent airplanes. Malaysias small railway system is less significant than its roads and is confined primarily to the peninsula, where it runs from the southern tip (where it is connected to Singapore) northward to the border with Thailand. Malaysias first light-rail transport was started in Kuala Lumpur in 1996. After that, several monorail and express lines have opened in the Kuala Lumpur metropolitan area. In East Malaysia and especially in Sarawak river transport is of great importance. In addition, Malaysias accessible and long coastlines have fostered maritime trade for more than a millennium. Several ports, notably Penang on the Strait of Malacca and Port Kelang (the principal port) have become major container-handling facilities. Air transport has grown very rapidly as the passenger traffic has increased especially on the peninsula. Almost all Malaysian states are connected with an internal air network. Airports in Kota Kinabalu, Penang and Kuching have limited international service. LAND TRANSPORT Roads Malaysias road network covers 98,721 kilometers , of which 80,280 kilometers is paved, and 1,821 kilometers is expressways. The longest highway the North-South Expressway of the country extends over 800 kilometers between the Singapore and Thai border. Trains The inter city, countrywide, traditional KTMB rail network and the inner city, light rail transit network are the two types of train network in Malaysia. The KTMB service serves the entire country of Malaysia by travelling between major cities and also up into Thailand. Railways The railway system covers a total of 1,849 kilometers (1,149 mi). 1,792 kilometers (1,113 mi) of it is narrow gauge, while 57 kilometers (35 mi) is standard gauge. 150 kilometers (93 mi) of narrow gauge tracks and all the standard gauge tracks are electrified. Elevated Light Rail Transit systems are used in some cities such as Kuala Lumpur which are relatively inexpensive. MY Rapid is a company that runs the main public transportation system in KL. They provide Monorail, Putra and Star LRT and RapidKL buses. Buses: For travel between Singapore, Penang and KL, the services of coach in Malaysia are difficult to beat. Fares are well priced at roughly RM 50 RM 60 for KL-Penang and just under RM 100 for luxury coaches from KL-Singapore. The best services also provide drink, food and entertainment for the journey. Buying tickets in Malaysia works out much cheaper than buying them in Singapore. Therefore, if it needs travelling from KL to Singapore and back again, surely purchase a return ticket from the Malaysian side. The buses offer pre-recorded commentary in eight different languages and stop at 22 designated stops around the city. Taxis Drivers very well know very well the city geography and are able to find shortcuts when the inevitable traffic builds up. It is compulsory for taxi drivers to use their built-in meter to calculate the fare. Flag-off fare is RM3 with an additional 10 cents for every 115 meters thereafter. The taxis caught in a traffic jam charge the fare RM3 for the first three minutes and 10 cents for every subsequent 21 seconds. Penang Rickshaw, Penang: In Penang, locals called their rickshaw as Beca in Malay language. Most locals are taking buses and taxi in the island. Due to modern infrastructure the number of rickshaws in the city is reducing. All of these rickshaws have special permit from the government. Currently, Penang has less than 200 rickshaws on its streets mainly to ride tourists to nearby attractions within the city. WATER TRANSPORT Waterways Malaysia has 7,200 kilometers (4,474 mi) of waterways, most of them rivers. Of this, 3,200 kilometers (1,988 mi) are in Peninsular Malaysia, 2500 kilometers (1553 mi) are in Sarawak and 1,500 kilometers (932 mi) are in Sabah. Information on Sea Transportation Many popular island destinations like Pangkor, Langkawi, Tioman and Redang are linked to the mainland by ferry services and other smaller islands are accessible by fishing boats, which may be chartered. Ferry services are also available from Belungkor, Tanjung, Desaru, Kukup, Johor Bahru Duty Free Zone and Sebana Cove (all in Johor) to the neighboring islands in the south and from Butterworth to Penang. There are a number of cruise liners which call on Malaysian ports. One of which, Star Cruises is Malaysian-owned and operated. Ports and harbors This is a list of Malaysian ports and harbors: Bintulu Kota Kinabalu Kuantan Kemaman Kuching Kudat Labuan Lahad Datu Lumut Miri Pasir Gudang George Town, Penang Port Dickson Port Klang Sandakan Sibu Tanjung Berhala Tanjung Kidurong Tawau Tanjung Pelepas Ferry: The ferries carry light vehicles on bottom deck and pedestrian on top level. The bottom is shared by 4 wheelers and two wheelers. The cars onboard the ferry occupy the front part followed by the motorcycles. The ferry has 2 toilets for male and female and one mini counter selling snacks and drinks on the upper level. Pipelines: Malaysia has 3 kilometers (2 mi) of condensate pipeline, 1,965 kilometers (1,221 mi) of gas pipeline, 31 kilometers (19 mi) of oil pipeline, and 114 kilometers (71 mi) of refined products pipelines. AIR TRANSPORT In Malaysia, airlines are separated into two 1) Passenger airlines 2) Cargo airlines. The Kuala Lumpur International Airport (KLIA) is well known in the region and is known as one of the more modern airports in the world. With other international airports in Kota Kinabalu, Kuching and Penang, domestic airports are also available in Malaysia. Also a Low Cost Carrier Terminal (LCCT) is designed specifically for low cost carriers by KLIA and it is located 20km from the main terminal. Air Asia is the most popular budget airline in Asia and is based in Malaysia. Air Asia flies to many locations regionally and also domestically. Air transport is crucial for the distribution of high value to weight products. Air freight may only account for 0.5% of the tons of global trade with the rest of the world, but it makes up around 34.6% of the total in terms of value. Shippers pay airlines MYR 8.0 billion annually to carry 805,000 tons of freight to, from and within Malaysia. The benefit to the shippers is estimated as MYR 3.3 billion in excess of this expenditure. Based on these share of exports Malaysian shippers receive over half of this benefit (MYR 1.9 billion). Malaysia Airlines currently flies to many places worldwide and provides access to other states within both East Malaysia and Peninsular Malaysia.

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