Impacts of Supporting Local Products: Insights from Malaysian Entrepreneurs

Impacts of Supporting Local Products: Insights from Malaysian Entrepreneurs

Faraz Faiyaj Khan¹, Cao Yuan^1,2, Nurul Iffah Mohd Nasir³, Muhammad Ikmal Faez Mohd Suhaimi⁴, Farah Nur Ain Ismail¹, Faizah Mohd Fakhruddin⁵

¹ Faculty of Civil Engineering, University Technology Malaysia, Johor, Malaysia

² The Golden Sun Construction Engineering Co. Ltd., Shunhe District, Kaifeng, Henan, China

³ Faculty of Science, University Technology Malaysia, Johor, Malaysia

⁴ Faculty of Mechanical Engineering, University Technology Malaysia, Johor, Malaysia

⁵ Faculty of Social Sciences and Humanities, University Technology Malaysia, Johor, Malaysia

DOI: https://dx.doi.org/10.47772/IJRISS.2025.907000121

Received: 26 June 2025; Accepted: 30 June 2025; Published: 02 August 2025

ABSTRACT

The rising trend of supporting local products plays a pivotal role in fostering sustainable economic growth, strengthening regional resilience, and preserving cultural heritage in a globalized marketplace. This shift not only boosts local economies by creating jobs and retaining wealth within communities but also reduces environmental footprints and enhances social cohesion through localized supply chains. This study examines the diverse impacts of support for local products on Malaysian enterprises, concentrating on economic, social, and psychological aspects. Utilizing a qualitative approach and case study design, five Malaysian entrepreneurs from diverse sectors were interviewed using semi-structured and in-depth interviews. Thematic analysis revealed notable findings, including economic support for local products that enhanced enterprise resilience, as well as cost issues and scalability challenges. Socially, it strengthened consumer trust, enhanced brand reputation, and fostered robust community bonds. Psychologically, it increased the informants’ motivation, confidence, and emotional attachment. These findings underscore the essential importance of local product support in maintaining business sustainability and fostering cultural identity. The study advocates for cohesive policy support, specific financial aid, and branding education to enhance local enterprises. Limitations include a limited sample size and an urban-centric emphasis, underscoring the need for more extensive and geographically diverse studies in the future.

Keywords: local product support, enterprises, entrepreneurs, consumer behavior, Malaysia

INTRODUCTION

The global economic landscape is increasingly recognizing the significance of supporting local enterprises in promoting sustainability, cultural preservation, and economic resilience. Globally, campaigns such as “Buy Local” in the United States and the United Kingdom have gained traction post-epidemic, underscoring economic localization as a reaction to vulnerable global supply chains (Yiğit, 2020). In Malaysia, the push to promote local products has expanded through programs such as “Buy Malaysian Products” (Ministry of Finance Malaysia and Secretary General of the Treasury, 2023) in response to global disruptions, notably the COVID-19 pandemic. These movements signify not only economic strategies but also expressions of developing consumer identities and national self-reliance. Malaysian enterprises, ranging from micro-firms to large multinationals, are crucial contributors to the national economy. Micro, small, and medium-sized enterprises (MSMEs) constituted 38.4% of Malaysia’s gross domestic product (GDP), generating approximately MYR580 billion in value-added and employing 48.2% of the national workforce, equivalent to around 7.6 million workers in 2021 (Department of Statistics Malaysia, 2022). In 2023, the service and manufacturing sectors accounted for 84.8% of the GDP generated by MSMEs, underscoring their pivotal significance in both exports and domestic economic production (Department of Statistics Malaysia, 2024).

Support for local enterprises in Malaysia has intensified through various initiatives, including internet campaigns, coordinated marketing strategies, and official programs such as “Buatan Malaysia.” For instance, local food manufacturers utilizing social media and endorsements from Key Opinion Leaders (KOLs) have observed a notable increase in consumer purchase intention driven by narratives of authenticity and national identity. Ironically, research indicates that local products often have perceived quality deficiencies and branding constraints, which can hinder long-term trust and market share, underscoring the need for quality assurance and strategic brand development (Loon et al., 2022; Halabi, 2021; Ng et al., 2023).

Statement of the Problem

Malaysian organizations, encompassing micro, small, and large firms, exhibit considerable deficiencies in innovation investment and digital maturity, which hinders their productivity and global competitiveness.  Although contributing approximately 38–40% to the national GDP and employing around 48% of the workforce, a limited number of enterprises have embraced sophisticated technology, including cloud computing, automation, and big data analytics (Nazir et al., 2025). The digital adoption gap hinders operational efficiency, restricts access to new markets, and diminishes the ability to develop resilient business models in a worldwide economy.

Research employing the Technology-Organization-Environment (TOE) framework has identified three essential internal barriers: insufficient top management support, restricted technical expertise, and a lack of organizational preparedness, which are significant hindrances to digital adoption within Malaysian businesses (Jais et al., 2024). These findings reveal a significant research gap. The current literature focuses on small and medium-sized enterprises (SMEs), while larger and non-SME enterprises, often possessing greater resources, are inadequately examined in digital transformation research.

Despite government initiatives such as Industry4WRD and the Smart Automation Grant designed to promote digital adoption and innovation, their efficacy at the corporate level remains little researched. There is limited empirical evidence assessing the effects of these policies on enterprise-level outcomes such as innovation capacity, market positioning, and profitability across various company sizes and sectors (United Nations Educational, Scientific and Cultural Organization, 2015). This underscores the necessity for comparative research to inform policymakers and business leaders in customizing support to bolster innovation and digital preparedness within Malaysia’s industrial ecosystem.

Research Objective

The study aims to achieve the following objective:

To explore the impacts of support for local products on Malaysian enterprises.

Significance of the Research

This study examines the impacts of endorsing local products on Malaysian enterprises and presents multiple immediate advantages for entrepreneurs operating in a progressively competitive and international market. The study provides local enterprise owners with a platform to share their lived experiences, challenges, and strategies. The insights acquired can enable these entrepreneurs to understand the connection between consumer support and business resilience, thereby guiding more strategic approaches to growth, branding, and community engagement. Consequently, the study augments entrepreneurial knowledge and awareness in response to evolving customer habits and economic risks.

The findings provide a substantial resource for governmental bodies and policymakers. The study emphasizes the need to synchronize national policies and support frameworks with the actual issues faced by local enterprises. This can inform the formulation of targeted subsidies, capacity-building initiatives, and public awareness campaigns that promote the consumption of local products. By tackling challenges such as cost containment, scalability, and supply chain constraints, the government may formulate more effective and responsive actions that enhance the Malaysian business ecosystem and foster sustainable economic development from the grassroots level.

 Furthermore, this study contributes to the growing body of knowledge on local company sustainability, particularly in the Southeast Asian context, for future scholars. It provides empirical insights that can enhance theoretical frameworks about consumer behavior, grassroots economic development, and regional supply networks. The findings underscore areas for further investigation, including comparative sector-level research, regional disparities in enterprises’ support, and the influence of digital transformation on the promotion of local products. This research theoretically enhances interdisciplinary discourse in entrepreneurship, marketing, economics, and sociological studies, establishing a robust basis for future academic investigation and methodological progress.

LITERATURE REVIEW

Business Resilience

The capacity of entrepreneurs to maintain operations during crises, such as COVID-19, bolstered by local customer preferences, is reflected in findings observed in Australia and Malaysia. Studies conducted by Mamun (2024) and Rodrigues et al. (2021) found that collaboration and supplier diversity substantially enhance resilience in SMEs within the Australian clothing retail sector. Additionally, a study conducted in Malaysia by Ali et al. (2021) illustrates that food SMEs implemented preemptive strategies, such as multi-sourcing and inventory buffers, when bolstered by local networks during interruptions. These empirical findings demonstrate that local product support not only ensures a steady client base but also enhances structural adaptability and supply chain flexibility for Malaysian businesses.

Cost Issues

Localized sourcing offers economic and psychological advantages; however, it may increase production costs due to restricted economies of scale and variable pricing. A Malaysian study done by Sithamparam et al. (2017) suggests that fragmented local supply chains result in increased operational costs and diminished competitiveness. Comparative research in Singapore demonstrates that scale limits among small suppliers increase unit costs, notwithstanding proximity advantages (Chong & Fuerst, 2025).

Scalability

The significance of institutional assistance in expanding activities is thoroughly recognized. Hanifah et al. (2025) identified access to financing and digital infrastructure as critical facilitators for SME growth in the United States, highlighting the structural deficiency for micro-enterprises. Kong (2025) assert that access to money, innovative capability, and formal networks substantially affect the scalability of Malaysian enterprises. These studies emphasize that promoting local products must be supplemented by specific support mechanisms, such as financial assistance and infrastructure development, to ensure sustainable growth.

Consumer Trust

Support for local brands fosters trust via transparency, traceability, and cultural significance. Liu et al. (2024) found that customers in China exhibit greater trust in brands that utilize storytelling and local sourcing, thereby enhancing repeat purchases. Additionally, Omar et al. (2023) indicate that urban Malaysians nationwide demonstrate analogous trends, where authenticity and traceability substantially enhance trust in local food businesses. These studies highlight wherein buyers inquire about ingredient sources and delivery origins, thereby enhancing trust and strengthening brand loyalty.

Brand Reputation

Integrating national advertising with local narratives improves brand reputation and credibility. Melewar et al. (2020) demonstrate that small enterprises in Europe enhance their international reputation by utilizing “Made-in” trademarks and digital branding strategies. In Malaysia, Azmi (2022) similarly observed that SMEs involved in cultural branding and traceable storytelling, coupled with programs such as Buatan Malaysia (Made in Malaysia), attained enhanced customer awareness and brand equity. This highlights the importance of collaboration with government platforms to enhance their reputation and enable market growth.

Community Bonds

Local product support and employment practices enhance community connections, establishing reciprocal networks that promote resilience. Rahman and Akter (2020) have demonstrated that village-based firms in rural India exhibit superior sustainability indicators due to their ingrained community links. Likewise, a study conducted in Malaysia by Galadanchi and Bakar (2018) suggests that collaborative practices and social embeddedness significantly enhance corporate sustainability. This highlights the need to employ local labor and partner with the localities, converting client interactions into more profound relationship networks.

Motivation

Entrepreneurs harness community support, drawing on psychological motivation and the significance it holds. Dimitratos et al. (2016) discovered that the dissemination of local identity and social value substantially enhances the intrinsic motivation of founders on an international scale. Simpong et al. (2022) established that national pride and local affirmation bolstered entrepreneurial resilience in Malaysia’s creative sectors. These studies illustrate how the reflection of national fame and local clientele rejuvenated the entrepreneurs’ motivation and mission, converting their enterprises into instruments of cultural expression and innovation.

Confidence

Local product support enhances entrepreneurial confidence and strategic agency. A study conducted in the United States by Gottschalk et al. (2024) demonstrated that affirmative local feedback enhances the propensity of SME owners to expand and innovate. In Malaysia, Shah Alam et al.’s (2023) study has shown that consumer acceptance bolsters self-efficacy and facilitates brand development initiatives. The confidence bolstered by commendation and institutional integration illustrates how local market support enables entrepreneurs to surmount feelings of inadequacy and aspire to greater aspirations.

Emotional Attachment

Emotional attachment to local brands is increasingly acknowledged as a crucial determinant of consumer loyalty and sustained brand promotion. Chen (2021) investigated emotional brand attachment in small firms and discovered that consumers who form emotional connections with a brand are more inclined to view it as indispensable, demonstrate loyalty, and serve as brand advocates, even in fiercely competitive markets. This attachment was particularly robust when enterprises integrated cultural narrative and direct customer interaction into their branding strategy (Ismagilova et al., 2020). In the Malaysian context, Amer (2023) highlighted that emotional branding, anchored in local identity through heritage-based packaging, personal narratives, and culturally pertinent marketing, substantially improves emotional connection and customer loyalty in indigenous enterprises. These emotional connections not only enhance consumer trust but also elevate small businesses into culturally significant brands within their communities, fostering both company sustainability and cultural preservation.

METHODOLOGY

Research Approach and Design

This study employs a qualitative approach, which is well-suited for examining the impacts of support for local products on Malaysian entrepreneurs. This approach enables researchers to gain a comprehensive understanding of the issues under study. It offers insights into the informants’ interpretations of their experiences, the meanings they attribute to them, and the impacts of these experiences on their business practices. This study employed a case study design to understand the complex issues related to the impacts of supporting local products on informants across various industries and operational contexts. The case study design facilitates a comprehensive and detailed examination of intricate issues within their actual contexts, rendering it especially beneficial for analyzing the dynamics of local product support among Malaysian entrepreneurs (Crowe et al., 2011).

Sample and Sampling Techniques

Sampling is a method that involves defining specific selection criteria to identify and recruit participants with extensive knowledge or expertise relevant to the research subject (Etikan et al., 2015). It allows researchers to identify information-dense situations that enhance the study’s efficacy and profundity (Palinkas et al., 2015). This study employed purposive sampling to select Malaysian entrepreneurs who are actively involved in promoting and selling indigenous products. This method was deliberately chosen to ensure that the informants possessed the requisite experience and understanding of the subject matter being examined.

 Additionally, the snowball sampling technique was employed to expand the participant pool. This technique entailed soliciting initial informants for recommendations of other entrepreneurs who satisfied the study’s criteria. Snowball sampling proved particularly successful in accessing a network of Malaysian entrepreneurs who share similar experiences related to the issues under study. This method is well-regarded in the social sciences for its effectiveness in reaching concealed or networked individuals and enhancing the contextual understanding of participant networks (Gierczyk et al., 2023).

The final sample comprised five Malaysian entrepreneurs from various sectors. The sample size was finalized upon achieving data saturation, indicating that no novel topics or sub-themes emerged from the interviews, suggesting that further data collection would likely yield redundant material (Fusch & Ness, 2015).

TABLE I Demographic Profile of the Informants

Table I presents the demographic characteristics of the five informants participating in this study, highlighting a range of information related to gender, ethnicity, religion, business name and type, operational duration, location, ownership structure, involvement with locally sourced products, and the percentage of local products sold. The study’s informants—Arifah, Bunga, Mia, Oliver, and Sofia—provide a diverse sample to explore the impact of local product support on them. Four are female (Arifah, Bunga, Mia, Sofia), and one is male (Oliver), offering mostly female perspectives with a male viewpoint. Ethnically, four informants (Arifah, Bunga, Mia, Sofia) are Malay, the majority group in the country, while Oliver is Chinese. Religiously, Arifah, Bunga, Mia, and Sofia are Muslim, aligning with the dominant religion and their Malay ethnicity, while Oliver is religiously unaffiliated.

All five informants, Arifah, Bunga, Mia, Oliver, and Sofia, are entrepreneurs operating in urban areas of Malaysia, each engaged in distinct fields. Arifah has been operating a photographic business as a lone entrepreneur for three years. Bunga operates ‘H’ Food and Drinks, a sole proprietorship in the food and beverage sector, employing four individuals and has one year of operating experience. Mia, the entrepreneur of ‘I’ Pt. Ltd., oversees a well-established firm in the oil and gas sector, employing 90 individuals, structured as a Private Limited, and has been operational for 14 years. Oliver, the entrepreneur behind ‘B’ Food, has been operating in the food industry for five years, managing a sole proprietorship with a team of five. Sofia is an entrepreneur of ‘N’ Cookies, a sole proprietorship in the food and beverage industry, employing four individuals and with ten years of company experience.

All five enterprises are situated in urban locations, and all informants actively endorse and retail locally produced or sourced goods. Arifah, Mia, Oliver, and Sofia assert that all of their items are acquired locally. On the other hand, Bunga asserts that 60% to 70% of her company offerings derive from local sources. These demographic variables offer a comprehensive and representative insight into the experiences of Malaysian entrepreneurs in local product promotion across various industries, maturity levels, and business structures.

Data Collection Procedure

The informants were permitted to choose the location, day, and time of the interviews according to their availability. The majority of sessions took place in informal and comfortable settings, such as cafés, the informants’ workplaces, or private offices. These informal settings facilitated rapport and fostered a hospitable climate for candid and open discussions. Prior to the commencement of each interview, the researchers provided informants with a comprehensive information sheet and a consent form to ensure that they thoroughly understood the nature, objectives, and scope of the research. They were guaranteed secrecy and advised that their participation was optional, with the option to quit at any point without repercussions.

The interview procedure aimed to explore the impacts experienced by Malaysian entrepreneurs as the result of local brand endorsement. Demographic data, including firm type, ownership structure, years of operation, number of employees, and percentage of locally sourced products, was collected via structured inquiries. Simultaneously, open-ended questions were designed to elicit the informants’ perspectives on critical issues related to the impacts of local brand endorsement.

 Audio recordings were used with the informants’ cooperation and consent to ensure precise documentation of the interviews. All five informants consented to be recorded. The interviews were done in either English or Bahasa Melayu, based on the informants’ language preference, to facilitate their expression of thoughts. Each interview lasted an average of 55 minutes.

Data Analysis

Upon concluding the data collection process, all interview recordings were transcribed verbatim to maintain the authenticity and depth of the participants’ comments. The researchers painstakingly assembled these transcriptions into a singular document, facilitating their work from a cohesive dataset. The procedure commenced with an exhaustive review of the transcripts to engage with the material and gain an initial understanding of the issues presented by the informants. This familiarization step facilitated the identification of recurring patterns and data segments pertinent to the research objective.

Thematic analysis was employed as the primary method for data analysis, adhering to the systematic six-phase methodology outlined by Braun and Clarke (2006). This approach was selected for its adaptability and efficacy in structuring comprehensive qualitative data. The preliminary phase involved creating codes by highlighting important passages from the interviews relevant to the study, including informants’ views on the impacts of supporting local products. The codes were subsequently classified into overarching categories according to their similarity and importance.

Subsequently, potential themes were developed by categorizing similar codes into overarching classifications. The researchers utilized topics from existing literature to inform this process, particularly those derived from academic sources and classroom discussions, encompassing economic, social, and psychological elements. Each topic was meticulously developed to ensure it accurately represented the facts and was substantiated by sufficient evidence from multiple sources. During this step, sub-themes were identified by a thorough analysis of informants’ replies, providing further insights into the intricacies of each main subject.

The concluding phase entailed explicitly defining and labelling the themes to encapsulate the principal concepts derived from the data. This analytical process allowed the researchers to obtain a coherent and pertinent interpretation of the experiences articulated by the informants. The thematic approach facilitated the understanding of varied perspectives and enabled the formulation of a cohesive narrative regarding the fundamental topics under examination. The outcome was a collection of robust themes and sub-themes that encapsulated the economic, social, and psychological impacts of local product support.

RESEARCH FINDINGS AND DISCUSSION

Fig. 1 Impacts of local product support on Malaysian enterprises

Based on Figure 1, the study’s findings reveal the impacts of supporting local products across three major themes, i.e., economic, social, and psychological. The sub-themes under economic impacts are business resilience, cost issues, and scalability challenges. Under social impacts, the sub-themes are consumer trust, brand reputation, and community bonds. Lastly, the sub-themes related to psychological impacts include entrepreneurs’ motivation, confidence, and emotional attachment. The insights obtained from informant interviews highlight the multifaceted importance of local product support in promoting sustainable, culturally grounded, and resilient firm ecosystems in Malaysia.

Economic Impacts

The economic impacts are apparent in the forms of resilience, cost issues, and the scalability problems. The effects are most evident in post-pandemic Malaysia, where entrepreneurs rapidly adjusted to maintain income and bolster local economic circulation. The COVID-19 crisis functioned as both a stress test and a catalyst for these businesses to cultivate adaptable structures amid uncertainty. Despite their constrained resources, the informants’ observations demonstrate how their businesses strengthen financial sustainability while contending with structural limitations. By employing inventive modifications, cost-effective techniques, and unwavering perseverance, local entrepreneurs successfully ensured operational continuity, supported their workforce, and accessed new client groups.

Business Resilience: The support for local products greatly enhanced the durability of Malaysian businesses by establishing them within a dependable consumer base and localized supplier networks. This resilience was particularly evident during the COVID-19 pandemic, which posed vital challenges to business continuity across various sectors. Bunga, the founder of ‘H’ Food and Drinks, recounted how her enterprise endured the lockdown period due to the steadfast support of local clients.

“When the Movement Control Order was implemented, our dine-in services ceased immediately. However, our regular customers, who are the residents, continued to place orders online via WhatsApp and requested personal delivery. We had not yet used Grab, necessitating manual management, yet their backing sustained us. In their absence, we would have been compelled to cease operations permanently.”

This demonstrates how support for local brands establishes a safety net not only in terms of financial stability but also in emotional support and community-oriented logistics. The informal connections between the client and the business enabled Bunga to swiftly transition to a delivery model despite the absence of a formal e-commerce platform. Her ability to leverage local trust and proximity served as a resilience mechanism unattainable by larger, non-local brands. This corroborates the findings of Mamun (2024), who contend that local sourcing enhances SMEs’ capacity to withstand global disruptions by promoting supply autonomy and community-based consumer demand. Likewise, Sofia, the proprietor of ‘N’ Cookies, emphasized that the support for her locally produced cookies went beyond mere transactions and was profoundly relational.

“Individuals would contact me expressing their want to support a local enterprise. They would place big pre-orders, perhaps to donate to hospitals or provide to family members. The issue was not price; it was centred on trust and the desire to assist a local individual. That provided me with the fortitude to continue baking despite supplier delays.”

Sofia’s experience highlights a values-driven consumer behaviour, wherein support was emotionally motivated, resulting in consistent demand despite supply chain disruptions. Her adaptability stemmed not from a strong structure but from communal goodwill, which provided resilience in both sales and emotional fortitude. A third example is provided by Mia, who operates within a privately held oil and gas corporation. Her enterprise, albeit operating in a capital-intensive area, encountered logistical difficulties during the pandemic:

“Due to port delays and the inaccessibility of international suppliers, we were compelled to reassess our supply chain. We utilized local material suppliers, which, although more expensive, decreased lead time and enhanced our control. Upon reflection, it rendered us more autonomous.”

Mia’s impetus for local sourcing stemmed from necessity, although it eventually rendered her operations more autonomous and adaptive. Through her assistance and engagement with local producers, she established a more adaptive and resilient supply chain, demonstrating robustness in both consumer-oriented enterprises and upstream industrial sectors. These observations align with those of Rodrigues et al. (2021) and Ali et al. (2021), who underscore the strategic significance of local sourcing in enhancing operational continuity and reducing foreign reliance amid economic instability.

In each instance, the support for local businesses and the sourcing function served as a stabilizing force, not only due to their local presence but also because they provided immediacy, adaptability, and community grounding amid external disruptions. The informants showed resilience by adapting, cultivating relationships, and localizing resources, illustrating how local brand support can serve as a crucial lifeline for businesses in times of adversity.

Cost Issues: Although support for local products offers resilience advantages, most informants emphasized the accompanying financial difficulties. These expenses stem from constrained economies of scale, variable pricing frameworks, and inadequate competition among regional providers. Entrepreneurs often incur higher costs for locally sourced supplies compared to imported alternatives, which can adversely impact their profit margins and pricing strategies. Oliver, proprietor of ‘B’ Food, defined this tension succinctly:

“We utilize local ingredients for all our needs; however, the expense is occasionally twice that of imported bulk products. For instance, local flour or packaging may incur a cost increase of 20-30%. Competing with large overseas suppliers that operate on a far larger scale is challenging.”

Oliver’s narratives highlight that the fundamental challenge of supporting local producers is consistent with sustainability and national pride. However, the pricing dynamics frequently harm small enterprises. Local suppliers, who are often deficient in mass production capacity and sophisticated logistics, frequently find it challenging to compete with the cost efficiencies of their global rivals. This issue aligns with Sithamparam et al. (2017), who found that Malaysian SMEs frequently struggle with elevated operational expenses resulting from disjointed supply chains and inadequate local economies of scale. Additionally, Mia, representing a capital-intensive enterprise, articulated a similar predicament:

“Local sourcing provided us with control; however, expenses increased.  In certain instances, local suppliers lack the requisite qualifications or sufficient quantities, resulting in our incurring a premium to satisfy basic criteria. It is a compromise expedited access, yet not more economical.” 

Mia’s experience highlights a persistent issue, i.e., while local suppliers offer proximity and expedited service, they often lack cost-effectiveness and uniformity, particularly in regulated industries such as oil and gas. This corroborates the findings of Chong and Fuerst (2025), who highlighted that the absence of production specialization among local Malaysian suppliers elevates procurement prices and undermines long-term dependence. Further, Arifah, a photographer, introduced the viewpoint of creative services:

“Local printing services are more costly than ordering from Thailand or China. I utilize local craftspeople whenever possible; nonetheless, I frequently need to explain the higher costs to my customers. At times, they comprehend; at other times, I forfeit business.” 

The aforementioned narratives demonstrate that the financial strain extends beyond the industry, affecting both the creative and service sectors. The necessity of informing clients about the importance of local work often contributes to the already arduous endeavor of competitive pricing, requiring emotional labor. This illustrates the complex reality in the absence of ecosystem-level cost uniformity, localized manufacturing encounters obstacles in terms of customer acceptance and scalability. Despite a robust aim to support local ecosystems, financial constraints continue to serve as a substantial impediment. To ensure the sustainability of local brand support, it is imperative to implement regulatory interventions—such as subsidies, grants, or bulk purchasing cooperatives—that reduce input costs and enable firms to pass on savings to customers while maintaining quality.

Scalability: Despite the advantages of supporting local products, scalability has remained a persistent challenge for Malaysian enterprises. Informants, particularly sole proprietors, highlighted the structural constraints they encountered while seeking to develop their activities. The constraints originate from restricted access to investment capital, inadequate integration into industrial networks, and the lack of institutional support structures tailored to the needs of developing local enterprises. About this, Sofia from ‘N’ Cookies remarked:

“We have expanded, but only to a certain extent. Beyond a specific scale, it becomes challenging to get reliable supply, recruit trained personnel, and finance larger equipment. I have had to decline several substantial contracts due to our limited capability.”

Sofia’s story exemplifies a scalability limit wherein small-sized enterprises encounter a growth barrier that cannot be exceeded without external resources. This aligns with Chong and Fuerst (2025), who emphasized that corporate expansion in Malaysia is significantly linked to access to innovation ecosystems, capital preparedness, and formal support frameworks, which are often lacking for smaller firms. The disparity in scalability potential is pronounced when juxtaposing sole proprietorships with incorporated entities. On the contrary, Mia, the proprietor of a bigger-sized privately restricted oil and gas enterprise, disclosed a different situation as follows:

“We possess additional resources for expansion equipment, storage capacity, and investment networks. Consequently, we can achieve scalability, even with regional vendors. However, I am aware of several small enterprises who face difficulties due to their lack of documentation or creditworthiness to seek financing.”

Mia’s account verifies that the establishment and formalization of corporate structures are directly linked to growth potential. It also indicates a deficiency in inclusive scalability, as micro and small firms are systematically precluded from attaining comparable growth. This issue aligns with the findings of Kong (2025), who identified financial access and administrative obstacles as significant impediments to small and medium-sized enterprise (SME) growth in Malaysia. Additionally, Arifah, representing the creative industry, contributed an additional dimension:

“Scalability encompasses more than mere size; it pertains to visibility. I lack marketing funds and access to retail partnerships. This is why it seems I am perpetually stagnant, especially during prosperous commercial periods.”

Arifah’s assertion highlights that scalability beyond production encompasses visibility, branding potential, and access to market platforms. Numerous local enterprises are unable to engage in broader commercial markets due to resource limitations and insufficient institutional connections. Hanifah et al. (2025) assert that restricted access to digital tools and commercial platforms hinders numerous firms from broadening their customer base and income streams. Although the support of local products may yield temporary increases in sales and customer loyalty, sustainable scalability necessitates structural adjustments. These encompass enhanced access to financing, superior supply chain integration, and more inclusive public-private collaborations. The absence of these factors results in uneven growth of local enterprises, which are constrained by systemic limitations.

Social Impacts

Entrepreneurs engaged in local product businesses contribute to the social fabric through consumer interactions, brand identification, and community participation. These enterprises cultivate enhanced customer involvement and foster a sense of communal identity and pride. Their impact extends beyond financial gain, remarkably enhancing local identity and unity. The informal networks established by these entrepreneurs often replace formal institutional support, fostering communal togetherness and enhancing cultural pride through product identification.

1)  Consumer Trust: Consumer trust has become a fundamental social advantage of supporting local products, intricately linked to location, personal interaction, and cultural familiarity. Entrepreneurs discovered that their identity as local producers bolstered their credibility among consumers, particularly when trust was established through product quality, shared values, accessibility, and transparency in business processes.

Oliver, the founder of ‘B’ Food, recounted how his company initially faced customer distrust due to the absence of polished packaging and Western branding elements typically associated with high quality.  Over time, the business fostered trust by establishing direct interactions with customers through farm visit photographs, behind-the-scenes videos of the production process, and regular involvement in community culinary events.

“Initially, the local consumers exhibited reluctance. They might inquire, ‘Is this secure?’ or ‘Is this comparable to imported brands?’  However, upon observing our preparation methods, sourcing of vegetables from local farms, and thorough explanations of the process, their entire demeanor changed. It transcended mere sustenance; it involved perceiving the passion underneath it.”

This transparency and openness immediately fostered consumer loyalty, particularly among health-conscious and morally driven purchasers.  Oliver noted that his regular customers frequently expressed their trust in the food due to their familiarity with the individuals responsible for it, underscoring the relational aspect of trust that small brands can uniquely provide.

Arifah, a photographer, experienced a distinct relationship where trust was closely tied to her profound understanding of local culture. Her clientele predominantly belonged to the same urban Malaysian group, and they valued her ability to catch culturally vital expressions and events that foreign photographers could overlook.

“Clients frequently expressed, ‘You understand us.’ They did not need to create a specific ambience for weddings or festivities. I understood how to arrange the lights for a conventional ceremony and which times were of utmost significance. That instilled a sense of recognition and comprehension in them, and that becomes a type of trust as well.”

For Arifah, consumer trust was founded not on product durability or price but on emotional and cultural significance. Her identification as a local artist constituted a competitive advantage in an industry where storytelling and significance are paramount to value.

Mia, managing an oil and gas supply enterprise, regarded trust from a logistical and professional perspective. Her clientele appreciated prompt responses, localized technical assistance, and the option to visit her office or warehouse in person. She elucidated:

“Our clients can just drive down to meet us. That was pivotal. They were not required to dispatch emails to a foreign recipient and await days for a response. In the face of inevitable challenges, we assumed responsibility and remained engaged. That is what engendered their trust in us despite our smaller size and lesser recognition compared to international providers.”

Mia observed that clients were first reluctant due to the perception that international brands were more dependable. By consistently fulfilling commitments and emphasizing the speed and accountability characteristic of a local supplier, her company made remarkable progress.

These experiences align with the findings of Omar et al. (2023), who highlighted that local brand authenticity, rooted in familiarity, physical presence, and shared identity, is crucial for cultivating customer trust in Malaysian urban marketplaces. Supporting local brands transcends economic considerations for customers. It constitutes a social contract grounded in reciprocal visibility and accountability. Entrepreneurs cultivate trust by being approachable, communicating clearly, and aligning their messaging with the community’s values and beliefs. By doing so, they convert consumer relationships into enduring loyalty, enhancing not only product satisfaction but also emotional security and cultural importance.

2)  Brand Reputation: The promotion of domestically produced goods substantially enhanced the brand reputation of Malaysian companies by increasing their visibility, authenticity, and perceived worth among consumers. Entrepreneurs noted that aligning with national branding initiatives and maintaining persistent community involvement enhanced recognition and conferred validity on their brands that were previously associated primarily with established or foreign entities.

Sofia, the proprietor of ‘N’ Cookies, articulated how her involvement in the Buatan Malaysia campaign transformed the perception of her home-based cookie brand among urban consumers. Prior to aligning her products with the national brand, she frequently encountered the prejudice that handcrafted or small-scale local goods were of inferior quality. Nonetheless, following her exposure via official promotions and government-sanctioned platforms, she observed a transformation:

“Historically, individuals perceived homemade as synonymous with inexpensive or unprofessional. However, as we incorporated the Buatan Malaysia insignia into our packaging and social media, the response shifted. Customers started to perceive us as more professional and more reliable. They remarked, ‘Oh, you are now recognized by the government?’ despite it not being an actual certification.  It provided us with additional credibility.”

Sofia adeptly utilized this enhanced awareness by revamping her brand identity, refining the container’s aesthetics, and emphasizing her use of locally produced components. The amalgamation of grassroots genuineness with institutional alignment endowed her brand with a reputation for warmth and reliability qualities that profoundly resonated with urban family consumers in the post-pandemic era.

Additionally, Bunga, the entrepreneur of ‘H’ Food and Drinks, described an alternative approach to brand reputation that stemmed from his commitment to ethical sourcing and community narratives. From the outset, Bunga underscored the origins of his ingredients and the identities of his suppliers, frequently showcasing brief narratives on social media about local farmers or bakers who contributed to his menu offerings. He discovered that such transparency increased the brand’s identity and customer perception.

“It was not merely about being local; it was about demonstrating to our customers the essence of locality. Upon reading narratives about the person who produces our chili paste or the village family cultivating our pandan leaves, they had a sense of belonging. That established our brand’s reputation as one that prioritized not only profit but also the well-being of individuals.”

Bunga observed a substantial rise in client involvement upon initiating the narration of these stories. Returning clients may reference particular supplier narratives and request specific dishes associated with them.  His brand gained recognition not only for its cuisine but also for its principles, and this emotional connection fostered organic word-of-mouth growth, especially among socially aware younger groups.

The findings corroborate those of Melewar et al. (2020) and Azmi (2022), who contends that brand reputation among consumers is intricately connected to cultural resonance, ethical posture, and perceived authenticity. When local firms prominently emphasize their origins, sourcing ethics, and community connections, particularly under national initiatives such as “Made in Malaysia,” they strengthen their position in a progressively competitive market. Consequently, customers reciprocate by demonstrating loyalty, advocacy, and a willingness to pay higher prices, thereby illustrating that brand reputation within the local context is established not merely through visibility but through substantive and transparent participation.

3)  Community Bonds: Support for locally produced goods has enhanced individual business success and strengthened the connections between enterprises and their communities. Entrepreneurs noted that cultivating authentic local engagement via employment, partnerships, or service orientation yielded enhanced customer loyalty and a shared sense of ownership of the brand. These communal relationships facilitated the prosperity of firms by integrating them into the daily lives and values of their clientele. For instance, Mia, the operator of ‘I’ Pt. Ltd. in the oil and gas industry, disclosed that her company intentionally emphasizes collaboration with local suppliers and service providers as a core aspect of its operational strategy. Despite her industry being generally linked to extensive, capital-heavy enterprises, she underscored the need to maintain local contacts whenever feasible:

“We prioritized hiring locally for our logistics and maintenance operations despite the higher costs. It transcended mere corporate social responsibility and fostered greater team investment. One would be astonished by the heightened commitment of a local team when they saw the company’s success as intertwined with their own.”

Mia indicated that throughout the procurement processes, the company opted for small, locally owned vendors over foreign or franchise-based contractors whenever quality standards were met. This not only disseminated economic benefits throughout the region but also established a safety net of dependable, loyal partners who were adaptable and responsive to operational difficulties. The closely interconnected relationships enhanced the company’s resilience. They reduced its susceptibility to abrupt disruptions, corroborating the assertions of Galadanchi and Bakar (2018), who contend that community-focused enterprises derive advantages from greater social capital and extended business longevity.

Arifah, a photographer, presented a more intimate interpretation of communal connectedness.  In her situation, clients endorsed her services not just because of her locality but because they were familiar with her narrative and felt an emotional affinity towards her path. She remembered:

“At one juncture, I shared my utilization of props sourced from local artisans and the rental of garments crafted by village women. That post went viral. Individuals have contacted me to express their appreciation for my inclusion of others in my photo sessions. They began reserving not merely a session, but an experience.”

Arifah’s emphasis on showcasing and incorporating local talent into her business environment generated a ripple effect, i.e., her clients perceived their involvement as contributing to a cause beyond mere service provision. This collaborative environment emerged as a selling point, with clients endorsing her enterprise as a community-enhancing brand rather than merely an individual venture. These narratives demonstrate that community connections transcend mere transactional interactions. They embody a profound alignment of values, identity, and collective development. Businesses that integrate into their local communities via employment, collaboration, or narrative foster customer loyalty, social trust, and economic interdependence. This connection ultimately fortifies both the firm and the community, establishing a sustainable ecology of reciprocal support (Rahman & Akter, 2020).

Psychological Impacts

Local product support has a substantial impact on Malaysian entrepreneurs’ perceptions, management, and sustainability of their firms. These invisible yet impactful impacts are frequently intricately connected to personal identity, self-esteem, and emotional investment. Throughout the interviews, three primary psychological sub-themes emerged: motivation, confidence, and emotional connection, all of which substantially influence entrepreneurial tenacity and strategic behavior.

1)Motivation: Support for local businesses has emerged as a vital psychological driver, offering entrepreneurs essential motivation through the conveyance of social recognition, cultural significance, and emotional connection. The synergistic effects of consumer motivation, communal pride, and local acknowledgement instilled a profound sense of purpose in their endeavors, leading them to transition from mere corporate sustainability to mission-oriented expansion. Sofia of ‘N’ Cookies recounted how her modest firm experienced a surge in motivation when customers began actively requesting her Malaysian-made items.

“When individuals began tagging us online with #sapotlokal and purchasing our cookies as gifts for festivals, it was not the sales that mattered. It was the conviction that we were integral to a larger movement.”

This testimonial illustrates how branding her cookies as uniquely Malaysian infused Sofia’s work with cultural significance, motivating her to enhance locally inspired packaging, heritage-themed flavors, and narratives that linked her consumers to a collective national identity. In addition, Mia, the leader of ‘I’ Pt. Ltd., recounts a comparable pivotal moment in a generally male-dominated industry:

“Initially, clients showed reluctance as they sought imported equipment.  However, following our alignment with local sourcing policies, our suggestions began to be taken seriously. The confirmation ignited a strong motivation within me to align that trust with enhanced quality, certifications, and research and development.”

The cultural and institutional support for local products stimulated Mia’s intrinsic motivation to enhance her company’s standards and innovate.  Her experience aligns with motivational frameworks, which indicate that “pull factors,” such as societal acceptability and national backing, enhance entrepreneurial skills and sustainability (Fazal et al., 2022). Furthermore, Arifah, a photographer, stated that local acknowledgement sparked a heightened sense of purpose.

 “Individuals informed me they engaged my services to assist Malaysian talent. The appreciation for my work due to its local significance provided the impetus to delve into more profound narratives and engage in cultural initiatives.”

This indicates a transition from transactional incentive to mission-driven involvement, wherein personal identity and national pride become interlinked with company expansion (Dimitratos et al., 2016). Motivation rooted in the need for achievement and pull factors has been shown to improve entrepreneurial performance and firm sustainability substantially.  Moreover, studies on the reasons for social entrepreneurship in Malaysia highlight the role of psychological empowerment and community support in enhancing entrepreneurs’ perseverance and resilience (Simpong et al., 2022). Undoubtedly, the support for local companies catalyzed external validation, and symbolic reinforcement stimulated intrinsic motivation.  Entrepreneurs responded by aligning their values, creativity, and endeavors with a greater purpose, thereby fostering sustained dedication, innovation, and personal growth.

2)      Confidence: The support for local brands has markedly enhanced entrepreneurs’ confidence, instilling a belief in the quality and competitiveness of their products. This internal transition signifies external endorsement and intentional corporate choices, converting uncertainties into strategic audacity.

Bunga of ‘H’ Food and Drinks recalls feeling overwhelmed by large, worldwide companies during the launch of her food enterprise. Nevertheless, upon receiving commendations from clients for her dedication to locally sourced, genuine Malaysian flavours, she encountered a significant boost in confidence:

“I previously compared our stall to large coffee chains and was concerned that I did not achieve their standards. However, when individuals expressed their preference for our cuisine due to its local origins, it alleviated my scepticism. I felt capable of standing with any of them.”

This newfound confidence prompted Bunga to engage in professional packaging, digital marketing, and participation in local food festivals, actions she previously deemed unattainable. This corresponds with the notion of entrepreneurial self-efficacy: as Bunga’s confidence in her abilities grew, so did her propensity to undertake calculated risks. Similarly, Oliver, proprietor of ‘B’ Food, underwent a comparable transformation in thinking. Frequently contrasted negatively with international fast-food establishments, he derived comfort from local brand support:

“When an individual expressed appreciation for our food due to its local origin rather than being imported, I recognized the inherent value of my product. That confidence enabled me to enhance our branding strategy and engage stores I previously deemed unlikely to carry our products.”

By redefining his identity as a local entrepreneur into a value proposition, Oliver successfully expanded into new distribution channels, illustrating the connection between outward validation and interior self-confidence. Two supplementary informants, Sofia (‘N’ Cookies) and Mia (‘I’ Pt. Ltd.), similarly indicated increased confidence. Sofia conveyed that when clients associated her cookies with local cultural nostalgia, she felt emboldened to impose premium prices:

“When they remarked that our cookies evoked their childhood, it instilled in me the confidence to affirm I merit that rate.”

Moreover, Mia articulated that governmental incentives for local sourcing enhanced her reputation in proposing larger projects, thereby emboldening her to pursue contracts that were hitherto deemed unachievable. These examples illustrate extensive Malaysian research on entrepreneurial self-efficacy, indicating that confidence enhances corporate performance and encourages strategic audacity. In every instance, local brand support acted as a catalyst, affirming the entrepreneurs’ convictions and empowering them to transcend limits, adopt innovation, and pursue growth with intention (Gottschalk et al., 2024; Shah Alam et al., 2023).

3)      Emotional Attachment: Support for local brands fosters profound emotional connections among entrepreneurs, who are often grounded in shared identities, neighbourhood links, and personal values that local businesses represent. This bond not only reinforced client loyalty but also provided entrepreneurs with a profound feeling of purpose and personal commitment to their endeavours. Sofia, from ‘N’ Cookies, recounted a poignant narrative that illustrates this connection:

“A lady once informed me that her children demanded our pandan kaya biscuits as they evoked memories of Sundays spent with their grandmother. She became emotional. To me, it was not merely a transaction; it was a narrative, a recollection. It served as a reminder of my initial motivation: to link individuals with their heritage.”

This emotional affirmation transformed the business from a mere commercial enterprise into a conduit for shared narratives and cultural affiliation. Sofia’s relationship with her customers developed, rendering each transaction profoundly meaningful. This aligns with the findings of Chen (2021), indicating that emotional branding associated with cultural heritage enhances enduring customer loyalty. Similarly, Mia from ‘I’ Pt. Ltd. presented a unique viewpoint, demonstrating emotional engagement in a business-to-business context:

“A client, a national energy corporation, commended us for maintaining their supply chain locally, stating it instilled a sense of national pride. They also presented us with a plaque of appreciation. That was significant. It demonstrated that we are not merely vendors; we are integral to Malaysia’s narrative.”

The plaque represented an emotional acknowledgement at an institutional level, affirming that her company’s objective was congruent with broader national themes. This emotional reciprocity fortified her company’s relationship with clients and invigorated the morale of the entire crew. Bunga, the entrepreneur of ‘H’ Food and Drinks, encapsulated an additional facet of emotional connection through personal gestures:

“When customers present us with thank you notes or pastries in appreciation, it leaves a lasting impression. I feel as though I am servicing family rather than merely consumers. That motivates me to persist.”

The aforementioned narratives demonstrate the functioning of emotional attachment on both individual and communal dimensions, enhancing entrepreneurial resilience and customer fidelity. Academic literature supports this phenomenon, as emotional branding and narrative anchoring significantly enhance customer engagement and entrepreneurial identity, as evidenced by Ismagilova et al. (2020) and Amer (2023) in the context of cultural branding in Southeast Asia.

CONCLUSION

In summary, supporting local products is essential for fortifying Malaysia’s entrepreneurial ecosystem. This study demonstrates that such support affects business continuity, customer relationships, and entrepreneurial well-being in economic, social, and psychological spheres. Entrepreneurs emphasized increased resilience amid challenges, heightened customer trust, a fortified brand identity, and profound emotional connections with their businesses. These effects extend beyond individual enterprises, contributing to cultural preservation and promoting national self-sufficiency. Notwithstanding obstacles, including elevated operational expenses and expanding constraints, local endorsement bolsters sustainability. Consequently, local product support arises not alone as a marketing strategy but as a fundamental cornerstone for grassroots economic growth in Malaysia.

RECOMMENDATION

Promoting local products is essential for enhancing Malaysia’s economic resilience, cultural identity, and entrepreneurial sustainability.  To actualize this potential, policymakers must implement targeted, outcome-oriented interventions such as micro-grants, tax incentives, and low-interest loans to mitigate cost pressures, while capacity-building initiatives centered on branding, digital marketing, and heritage storytelling can improve visibility and competitiveness.  Enhancing ecosystems via local product exhibitions, supplier cooperatives, and educational awareness initiatives will cultivate trust, cultural pride, and expanded market access, supplemented by collaborative enterprise hubs offering packaging, logistics, and e-commerce assistance to address scalability issues.  Future policies must emphasize inclusivity by catering to the requirements of rural and semi-urban entrepreneurs, informed by longitudinal and mixed-methods research to guarantee that interventions accurately represent varied entrepreneurial contexts.  Enhancing national initiatives such as “Buatan Malaysia” through digital influencers and international trade collaborations, while establishing quality certification systems linked to cultural heritage and ethical sourcing, will strengthen consumer confidence and promote local products both nationally and globally.  A unified national strategy, supported by cooperation among government, industry, NGOs, and consumers, is crucial for establishing a robust entrepreneurial environment that enables local firms to prosper, cultural identities to thrive, and economic autonomy to be achieved.

Limitation

This study offers valuable qualitative insights; however, it is limited by its small sample size and its focus on urban entrepreneurs, which may fail to represent the experiences of enterprises in rural or semi-urban areas. Furthermore, the results depend on self-reported data, which may introduce bias. Subsequent research should utilize larger, more heterogeneous samples, employ mixed-methods approaches for triangulation, and investigate sector-specific effects across various geographic regions. This will facilitate a more thorough comprehension of the operation of local product endorsement within the broader Malaysian business environment.

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