Sabah SMEs face rising costs, competition amid challenging 2026, says association chief

KOTA KINABALU (Feb 27): Small and medium enterprises (SMEs) in Sabah are navigating mounting challenges amid rising costs and an increasingly competitive market, said SME Association of Sabah president Dr Deledda Tan.

Speaking at the SME Association of Sabah Chinese New Year Gala Dinner 2026 here, she said the event was more than a festive gathering, describing it as a platform to strengthen relationships, foster partnerships, and celebrate the resilience of the state’s SME community.

As Sabah enters 2026, she noted that SMEs face a ‘perfect storm’, with increasing costs from e-invoicing, Sales and Service Tax (SST) compliance, manpower, and labour, alongside heightened competition from international players, particularly from China.

“Many of our local SMEs are working harder than ever to maintain and grow their market share,” she said, highlighting the importance of government support in funding, financing, and policies that strengthen local entrepreneurs.

Tan also announced the launch of the SME Sabah’s Mobile Application, designed to provide members with exclusive benefits and privileges, and revealed plans for a business trip to Hainan in March to explore cross-border business collaborations.

She expressed appreciation for Industrial Development, Entrepreneurship and Transport Minister Datuk Ewon Benedick, describing his support for Sabah’s industrial and entrepreneurial development as ‘encouraging and impactful’.

Organising chairlady Dr Sally Chen added that SMEs across diverse sectors share the same entrepreneurial journey of building businesses, creating jobs, and contributing to Sabah’s economic development.

She emphasised that the association serves as a platform for support, knowledge sharing, networking, and advocacy for SMEs.

“Tonight’s gala dinner may look glamorous, but its deeper purpose is to strengthen relationships, build trust, and remind ourselves that none of us walk this journey alone,” she said, urging greater collaboration between SMEs, government agencies, government-linked companies (GLCs), and corporate players to create long-term value and sustainable growth.